Insights Into Initial Dex Offering (IDO) — A Fundraising Approach For Crypto Projects
Initial Dex Offering is an abbreviation for IDO, which is the preferable capital-raising approach, that opens up a way for project holders to raise capital. When the project has been launched by listing the IDO tokens, the investors with interest in the project could invest in the project by purchasing the token. Initial Dex Offering (IDO) benefits both project owners and investors. That is, individuals owning projects will have an opportunity to get a wider reach among investors. With the soaring number of investors, they could raise capital accordingly. Whereas, on the flip side, investors get to explore and surf through the project they are interested in from a plethora of projects being listed on the decentralized exchange (DEX) platform.
A Brief Look Into How The Initial Dex Offering (IDO) Works
- An Initial Dex Offering (IDO) uses a decentralized exchange (DEX) or IDO launchpad for the sale of IDO tokens.
- The individual intending to raise capital has to list the IDO token on the fundraising platform. To begin with this, they have to submit the proposal, which will be reviewed and verified. If the project seems to be sustainable, it will be listed on the fundraising platform.
- The projects which are listed draw the attention of investors. The investors can surf through various projects and white-list themselves for the project they intend to invest in. This is what pre-IDO sales are all about.
- Those who list their tokens have options to choose from any of the following.
- They could set a fixed price for the tokens. In such a case, the price of the token increases only when the demand soars.
- Or else, they would let the investors take part in the auction to buy the tokens. In this, the sellers of the token have to specify the initial bidding price. This price dynamically varies according to the supply or demand of the IDO tokens.
- Immediately after the launch of the IDO tokens for representing the projects, investors would buy as many tokens they want to purchase.
Apart from the mentioned pre-IDO sales approach, another strategy has to be carried out, which is based on a lottery system. In this, various participants could stake their assets or funds and take part in the lottery and explore the opportunities to win the crypto tokens.
Steps To Launch The Initial Dex Offering (IDO)
Step 1 — Business Plan Strategy
The initial step is framing the business plan that makes sense. Strategizing includes the following. Focus on these beforehand in order to make token sales a successful phenomenon.
- Aim or objective of the project,
- On which blockchain network is the project going to be operated,
- Marketing campaigns to be carried out to promote the crypto tokens, and
- Ways to lead the project post-IDO sales.
Step 2 — Marketing Materials
Once done with the foremost step of strategizing the plan, it is now time to implement the same more effectively. We know that marketing plays a significant role in projects to get success. This has to be attained through creating a white paper and website.
A white paper is nothing but a document that provides insights into projects. It is a kind of in-depth report about where the project revolves around, including required stats, facts, tables, diagrams, and so on. It is to make investors believe that it is worth investing in the project. In short, the sole purpose of a white paper is to educate the investors regarding the project.
Website creation is very crucial for making your brand reachable and recognizable among potential investors. In a much notable way, the well-designed website with a friendly user interface paves the way to pull the attention of the right set audience. There are projects which struggle to make their branding without having a proper website.
Step 3 — Token Creation
Creating the token is the very next thing to contemplate. To be straightforward, token generation can even be done with the help of software like Coin Tool. Or else, you could reach out to the IDO development company as they would take care right from creating the token to listing it on the decentralized liquidity exchange.
Step 4 — Token Listing
As soon as you are completed with the above-mentioned steps, you have to list the token on the IDO launchpad you wish. Then, the token will be available for investors to buy. The interested investors look through the white paper of the project to buy the token. Beforehand, conducting a marketing campaign is much more requisite. You could make use of the popular channels to promote your tokens.
What Are The Advantages Of The Initial Dex Offering (IDO)?
⚡ Immediate Liquidity
Liquidity in cryptocurrency means the ability of a digital coin to be converted into money. That is, with the high ease of converting digital coins to cash on hands, the better the liquidity will be. The immediate liquidity gives rise to huge benefits to the token price. The owner of the token will have access to the user database and liquidity pool. Thereby, bringing the chance to enhance the crypto token to be traded and the value increases.
⚡ Instant Trading
One significant advantage of the Initial Dex Offering (DEX) is fast trading. This ensures that as soon as the project is launched on the decentralized exchange, the investors will be able to buy the token. Upon buying the tokens at fewer prices, the early investors could be given the opportunity to resell those tokens at higher prices.
⚡ Fair Fundraising Approach
The usual way of a fundraising approach means that when the token is put for sale in public, investors could buy a large number of tokens at lesser prices and sell them at higher prices. But, in the scenario of using a decentralized liquidity exchange, no single investor is buying a large number of tokens as every individual gets the opportunity to buy the token. There is no denying that the IDO launchpad offers a fair fundraising approach.
Despite these advantages, there is no KYC and AML verification requirement for investors and project holders to use the decentralized exchange (DEX). And, there is a chance for unrequited projects to launch their tokens, making less diligence for projects.
Role And Necessity Of IDO Launchpad
The sole purpose of the IDO launchpad is to let the project owners/holders put forth their crypto projects by listing the IDO tokens. With the rising number of crypto projects, the demand for the IDO launchpad has soared. Coming up with the idea of launching the decentralized exchange would aid you in harnessing benefits in every possible aspect. To begin with, connect with an apt company or hire developers for cryptocurrency launchpad development. Make certain to choose the best company by checking their portfolios and knowing their previous work. This would help you to make a wise decision.
Summing Thoughts
Hope so; you have acquired sufficient deets regarding Initial Dex Offering (IDO) and its benefits & development steps. IDO being the most popular, it is preferred for raising funds for crypto projects.
