Initial DEX Offering (IDO) Features, Benefits & Drawbacks
Initial DEX offering, which is also called IDO, is a way for cryptocurrency businesses and projects to raise money. The most important thing is to have tokens issued and sold on a decentralized exchange (DEX) so that you can raise money. The users are then given the choice of keeping...
Initial DEX offering, which is also called IDO, is a way for cryptocurrency businesses and projects to raise money. The most important thing is to have tokens issued and sold on a decentralized exchange (DEX) so that you can raise money. The users are then given the choice of keeping the resulting tokens to keep taking part in the project or selling them to make money.
How IDO works
IDO Launchpad is a decentralized platform that hosts projects that investors can choose to put their money into. Investors can put their money into projects they think have a good chance of succeeding. The whole process is done in a decentralized way using the idea of liquidity pools.
Blockchain technology is the foundation on which IDO platforms are based. The most common are as follows:
- Ethereum
- Solana
- Cardano
- Binance Smart Chain
- Polkadot
IDO is the newest model for cryptocurrency crowdfunding, yet it is not without its flaws even if it is the most recent model. In particular, DEXs are less scalable. Even if an IEO is able to raise $500 million or more, an IDO will never be able to achieve this value. The ordinary user’s lack of awareness regarding cryptocurrencies presents another challenge; as a result, novice users are more inclined to choose simpler, centralized platforms.
IDOs are able to provide quick liquidity of tokens, which is the primary benefit. This is possible due to the large rewards that are given to those that supply liquidity pools on the DEX. The majority of projects provide liquidity to the DEX by setting aside a portion of their budgets specifically for this objective. Additionally, many projects provide additional benefits to users who keep their tokens in their wallets for an extended period of time in order to encourage consumers to do so.
How does the IDO platform operate?
IDO’s decentralized launchpad has welcomed new businesses that are in the process of formation. Tokens for these potentially lucrative projects are available for purchase by investors who intend to resell them for a profit in the future.
The Most Profitable IDOs in 2022
It is appropriate to judge the success of the original DEX offering based on how the price of the token has increased over time after the sale. This will give an accurate representation of how well the offering was received. After all, this is what establishes the ultimate level of profit for the investors. The following are some instances of tokens that have been distributed by IDO, together with information on the profitability of those tokens ever since their introduction to the market:
- Altura (ALU) (ALU). Payback 808.1x.
- The Seed Project (SHILL). Payback 752.5x.
- Bloktopia (BLOK) (BLOK). Return on investment equal to 698.23x.
- Cake Monster (MONSTA). Return on investment of 513.62 times.
- MetaVPad (METAV) (METAV). Payback that is equal to 482.76 times.
- PulsePad (PLSPAD) (PLSPAD). Payback that is equal to 444.34 times.
- GameFi (GAFI) (GAFI). Payback 366.77x.
- ADAPad (ADAPAD) (ADAPAD). Payout 348.7 times over.
- Star Launch (START). Payback 342.37x.
- Waguy Swap (WAG). Return on investment of 333.38 times.
As can be seen, those who put their money into IDO stand a good chance of seeing a return on their investment. In point of fact, however, everything is dependent on the creators of the project and the efforts that they put forth, in addition to the trend in the market.
IDO: The Positives and Negatives
Pros
- A high level of liquidity from the very first moment trading began.
- The opportunity to acquire more benefits by holding onto tokens.
- The likelihood of a rapid rate of expansion immediately following the conclusion of the token sale.
- Structure of platforms that does not include custody.
Cons
- Due to the poor scalability of the platform, the potential quantity of investments that can be gathered is significantly less than what can be collected on centralized systems.
- The alternative presents a greater challenge for newcomers from a technical standpoint.
What Do You Require to Get Started Earning Money?
Along with starting cash, start with a Web3 wallet like Metamask or the Binance Chain Wallet. You must fulfill additional conditions if you want to join a project’s white list and receive its tokens first. Usually, to comply with these extra requirements, you must hold IDO platform tokens in your wallet.