IDO – Fundraising on a Decentralized Platform

Initial Dex Offering – abbreviated IDO, while Dex stands for Decentralized Exchange, is the name of the fundraising that results in the launch of a token that takes place on one of the decentralized exchange platforms.

During this activity, projects launched with the aim of financing themselves attract the general public through a launch platform, ie platforms specialized for the IDO, such as PancakeSwapSushiswapAaveUniswapBalancer

Under certain conditions, investors can buy these tokens before they become available on the market. Such tokens can represent any type of assets listed on a decentralized exchange, i.e. when the project issues a token through a decentralized liquidity exchange.

IDOs are replacing other crypto-fundraising mechanisms such as Initial Coin Offer (ICO), Initial Exchange Offer (IEO), and Security Token Offer (STO).

The advantage given by the IDO is particularly reflected in the approach to better liquidity that is achieved in the moment, as well as in the fairing between the project promoter and the members of the community.

Creating IDOs

IDOs can be created for anything, from cryptocurrencies, through games, to music albums and all files that can be found in digital form, with the goal of offering companies tools to engage their communities in an economy that enriches their products and services, while enabling them to make smart business decisions about their assets.

If a supported project proves to have promising properties, there will also be benefits from prices that are often much lower than when placed on the market. The difference is that this activity can literally be said that it does not provide enough space for all those who want IDO and that those who succeed in this intention, among other things, were lucky.

Along with the global rise in cryptocurrency prices, what has become a visible trend has been the multitude of launch platforms that are emerging to support the growing number of new projects in this area. All of these new IDO launch platforms were established with the intention of finding the best system that allows all orders, from the smallest to the largest, to be part of an IDO story.

Platforms

The IDO is largely reminiscent of a decentralized platform for crowdfunding without restrictions, bringing a new alternative to fundraising in the cryptocurrency world.

If any project initiates an IDO, it enters the process of issuing coins or tokens through a decentralized liquidity exchange, usually available crypto assets, including stablecoins.

Each IDO launch platform tries to innovate and offer a different participation system, while the overall scheme is always the same. First, you buy a token to become a member, then you propose to other members the project you want to launch, and then you get the right to invest in the next IDO, after which you send funds and receive IDO tokens in return.

For example, in order to participate in the Paid Ifnition platform, you need a PAID token, ie the token of the platform on which you want this activity to take place.

Obviously, larger owners are often rewarded with greater chances of having an allocation or a higher maximum allocation. Since it is necessary to buy a token, in addition to the funds you need to send to the IDO project, you must carefully choose your launch method by studying in detail how it works and which projects have been launched earlier.

Funding

Buyers are usually asked to hold or “deposit” a certain token for a while so that they can participate in IDOs. Caution is needed here, as it is often a significant investment that can block funding for a long time, with very little chance of participating in IDOs.

For example, on some platforms, tokens are blocked for 90 days without the possibility of reselling, during which time their value may fall or other types of market disruption may follow, and there is a risk of platform hacking. That is why it is necessary to be informed in detail about all the conditions required of the participants because in such circumstances there is simply no return to the beginning.

When a new project is launched, the platform warns its members of the upcoming IDO, in which case the most important thing is to be patient and not interpret every announcement and promotion as an opportunity not to be missed.

Informing

In some situations, it is necessary to show interest in the project by going through a KYC process that is specific to the project. This is a unique opportunity to find out specific details about the project, the team behind it, their ambitions, the characteristics of the token itself, and other venture capital owners who participated in the project.

One should not miss the opportunity to communicate using the Telegram group, where the answers to additional questions related can be found in order to decide whether it is worth participating in a particular IDO.

It is important to keep in mind that each platform dictates its own rules, but also that most often only the largest owners of IDO tokens get access to guaranteed access if the platform is designed that way, while owners of smaller assets usually reach this opportunity by lottery.

As with ICOs, there is a possibility that project tokens may become available after a while, which is often practiced to mitigate the effects of mass sales immediately after entering the market, so the time up to that point should be taken into account.

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