It is true that the crypto space has always tried to come up with new ways to encourage promising projects and raise funds. Fundraising is now critical, and new concepts and technologies have made it an excellent alternative to traditional methods. To be more specific, it relied heavily on venture capitalists to fund the projects. It was thought to be a time-consuming and laborious process. Gradually, IPOs, ICOs, STOs, and IEOs appeared to make the process easier. Today’s market is flooded with countless fundraising projects, all with the hope that the right idea at the right time will propel the project to success. Among these fundraising methods, Initial Dex Offering (IDO) is a new fundraising model that provides fundraisers with immediate liquidity. This blog will teach you everything you need to know about IDO – Continue reading!
What Is an Initial Dex Offering (IDO)?
Before delving into the concept of IDO, it’s important to understand the distinction between a regular decentralized exchange and a liquidity exchange. The former is a one-of-a-kind transaction that relies on an order book for matchmakers and takers. The main disadvantage is that it may result in significant slippage and does not guarantee instant liquidity. A decentralized liquidity exchange introduces to jumpstart this struggle. It is entirely based on liquidity pools, allowing traders to easily swap tokens. This is where IDO comes into play.
Initial Dex Offering (IDO) is a fundraising model that allows for the quick raising of funds for your decentralized exchange platform. The DEX platform’s assets will be in the form of cryptocurrencies or tokens. To be more specific, IDO provides financial support from individual investors, with the exception that investors will not own any equity in the project. It helps you make accurate decisions and encourages the community to actively participate in your product/service. Raven Protocol was the first IDO model to be released. In June 2019, it was listed on the Binance decentralized exchange.
What Is the Importance of IDOs?
ICOs were initially popular as a fundraising model. Even though it was one of the most important methods, it had some challenges to overcome. It is a centralized system that includes third-party discrimination and is more vulnerable to human error and lack of privacy. As a result, IDOs became an effective fundraising model. It brilliantly solves the ICO problem while also opening up entirely new possibilities. It paves the way for instant liquidity through the dependable use of decentralized exchanges. At the same time, it provides the owners with the highest level of security by protecting their blockchain products from third parties or hackers. Aside from that, it protects the coins stored in the wallet with unique private keys. All of this combined to make IDO an emerging crowdfunding platform for promising crypto projects.
Benefits of the Initial Dex Offering
Let’s take a look at the outstanding benefits of Initial Dex Offering that made it a game-changer.
It pledges to provide users with a faster trading experience. Investors have a fantastic opportunity to purchase tokens and sell them for a higher price in the future.
IDO is an incredible platform for providing instant liquidity for projects. This helps to increase the cost of the token.
Model of Open Source:
There are no special permissions required; anyone can organize or participate in the process.
Transparent in Nature:
Because the entire process takes place on-chain, the platform’s transparency is an added benefit.
It uses less gas to make the best use of smart contracts by providing a liquidity exchange for the listed projects.
How to Invest in an IDO?
The IDO’s participation is determined by the launchpad chosen. The steps involved are as follows when using a standard approach.
This is the first step in participating. Investors should go through KYC/AML screening because it is a necessary regulation for these types of crypto-based platforms to avoid legal issues.
Hold Required Tokens:
Depending on the IDO launchpad, investors require to hold certain tokens in order to be eligible. Its purpose is to provide liquidity to the projects listed.
The whitelisting process requires in order to consider additional allocations. Apart from KYC verification, they must also complete some tasks in order to complete the whitelisting process.
Maintain a Wallet:
Taking part in an IDO entails investing and receiving tokens. A wallet requires for this. Having a web 3.0 wallet on hand would streamline the process.
Access the Exchanges:
Tokens can be exchanged and stored in wallets after receiving an allocation. Being familiar with decentralized exchanges would speed up the process significantly.
Because of its robust features and benefits, the IDO fundraising model is certain to bring about a magnificent change in the industry. It has begun to attract crypto enthusiasts and also stands strong for the success of new token projects.
Suffescom is the best choice for all of your IDO requirements. We understand your requirements clearly as industry-leading experts, backed by a troop of world-class blockchain and cryptocurrency experts, and will be able to provide you with personalized products that meet your requirements. Our privileged IDO Development Company includes whitepaper services, strategies and blueprints, marketing services, token development services, blockchain integration, product launch support, and much more.