Harness the Initial DEX Offering to Raise Capital
The goal of the blockchain and cryptocurrency world is to eliminate the reliance on centralized platforms and financial methods. There are still big players, such as exchanges, that operate in a completely regulated environment. IDO — Initial DEX Offering — popped up with the entirety of just that!
IDO (Initial Dex Offering) is a new crowdfunding mechanism that gained traction in 2020, owing to the increased interest in DeFi. This article will describe how this concept works and how it differs from ICO and IEO in simple terms. We’ll go over the benefits and drawbacks of IDO and assess the potential of this new kind of crowdsourcing.
Initial Dex Offering — The Working Mechanism
Many disliked the IEO model due to its high fees, inability to trade on other exchanges, and frequently opaque project criteria. In addition, IEO’s reliance on centralized exchanges irritated both startups and investors, as it goes against the very notion of cryptocurrencies and blockchain — decentralization.
🔖Here is the working mechanism of Initial Dex Offering as follows:
💡Pre-planning
It entails a quick analysis and description of the crypto startup, including website creation, white-paper drafting, etc. Ensure that your project whitepaper bristles with adequate information.
💡Decentralized Exchange (DEX)
Here, the project is sent to a decentralized exchange: it can be an existing platform or build yours. It is where the IDO Solutions provider comes in with their avant-garde expertise. The project validation is quintessential to ward off spam IDOs from the ecosystem. Take PolkaStarter (for instance), which has a governing council to facilitate project listing.
💡Public Sale
Initial Dex Offering enables the projects to raise capital via ETH and stable coins like USDT. The public sale usually happens in two ways: batch selling, while the other is through an auction. The former issues discounts on a first-cum-first-serve basis, while the latter deploys variable pricing.
💡Token Listings
The token is put for trading. Since most trading platforms are decentralized, the token listing wouldn’t incur additional fees. The platforms conduct a liquidity pool (for the token) to incentivize people.
🔖Here Are The Platforms Driving the IDO Trend:
💡Binance Launchpad
The pre-requisite for participating in IDO Launches: hold BNB tokens on the native account. The caveat is that buying BNB tokens before the IDO’s launch isn’t enough; you must have owned the tokens for at least a week beforehand. And because you never know when new IDOs will be released, keeping BNB is crucial! Many of these projects are instantly listed on Binance, ensuring immediately visible.
💡TrustSwap
Binance has another Ethereum wallet. On occasion, they also offer IDOs. The most recent was a project (MoFi) launched during mid-2021. To take part, you must utilize their wallet, which is both good and speedy. The app is accessible on both the App Store and the Play Store, and it works with WalletConnect, so you can use it to access Uniswap and other apps.
💡PolkaStarter
If you successfully participate in one of the many IDOs on our platform, you will be guaranteed to receive money. Almost any IDO that uses Polkastarter can guarantee returns than their initial investment. A new initiative was arranged with Polkastarter and decided to let 400 people participate in their IDO.
We must Ensure that technology is Accessible, Affordable, Adds value.
🔖Why Do Investors Prefer IDO?
Affordability and security are two key reasons why investors choose IDO to IEO. Affordability, because anyone with any amount in hand can buy tokens during IDO, and no additional verification is required. Furthermore, no restrictions are linked to the investor’s country in an Initial Dex Offering, but they may be present in an Initial Exchange Offering.
In addition, unlike ICOs, which require a waiting period for liquidity and trade, IDOs offer immediate access. Another advantage of IDOs is that the issued token is listed on the DEX, where the IDO occurred right away.
🔖Conclusion
The next step in crypto funding is the Initial Dex Offering (IDO). However, it needs a lot of tweaking. Integrating control mechanisms into the existing IDO model is critical. It can help eliminate price fluctuations in tokens until the campaign is completed. Issuers can also acquire additional control over token purchases by implementing KYC restrictions.
If you’re an entrepreneur reading this, good luck on raising funds with the Initial Dex Offering. But wait, before that — hire an IDO solutions provider.
