IEO vs IDO — Which is a better launch?
The advent of cryptocurrency and blockchain technology disrupted the finance and investment sectors. They revolutionized the way people looked at finance taking the fruits of decentralization to everyone. Cryptocurrencies gained public attraction due to their decentralized nature. The fiat currencies are under the control of nationalized banks/governments, so when a country undergoes an economic recession, the value of the currencies might drop. This is why there is always a craze for cryptocurrency. Cryptocurrencies rather than a medium of exchange or store value, have been used by firms as instruments to raise funds via token sales. Fundraising via issuance includes the distribution of tokens for the general public in exchange for major cryptocurrencies or fiat currencies. Though there are other methods of token sales namely ICO, IEO, or STO, IDO has taken a good hold over the others.
IEO Vs IDO
Though Initial Exchange Offering (IEO) and Initial DEX Offering (IDO) allow immediate trading on top of raising funds, IEOs are carried out by the centralized cryptocurrency exchanges where strict ground rules come into the picture. The token or project owners are in a position to pay a huge amount to list their launch their projects via centralized exchanges. Few leading centralized exchanges charge up to million dollars to help projects raise funds. Also, when the token is being launched on a CEX, the project owners are not allowed to list their tokens on other competing exchanges. The project owners will have only a very small leeway in controlling the token sale parameters.
Another drawback with the existing launchpads is the improper allocation of tokens. Even if you hold tokens of the platform there is a high chance that you get no allocation spot. This unfair allocation system prevented people from getting involved in good cryptocurrency projects. This will make the mass adoption of cryptocurrency, a tedious one.
Decentralized launchpads — The potential solution
The DEX launchpads will nurture new ideas and projects in the cryptocurrency space by helping them distribute tokens and raise liquidity. It has a low barrier to entry and has brought in a potential solution for the existing token launch problems with the bespoke use of technology. It incentivizes all token holders unmindful of their financial climate. The notable feature of IDO is its token distribution system that guarantees allocation for all the token holders.
No bots, No scams
Certain launchpads offer allocates tokens only on an FCFS basis, where the programmed bots can fill the spots in no time. This takes away the probability of allocation for the token holders and members of the platform. The ultimate aim of the DEX launchpad is to make fair decentralized launches happen in the market without depending on luck, or lotteries, or bots. It helps the project focus on development, while it takes care of token allocation, fund-raising, and liquidity enhancement.