In recent years, the ICO process has finally lost popularity among investors. In 2022, every self-respecting project seeks to be included in the IDO to attract the necessary investments and declare itself to the world. IDO has also become a popular way to attract investment due to the minimum requirements for investors and developers.
IDO is a way to raise funds through a decentralized exchange using liquidity pools. Liquidity pools are a common bag of tokens filled with DEX participants to allow each user to exchange the assets they need. At IDO, liquidity pools are filled using smart contracts.
In this article, we will talk about the IDO procedure in detail. Plus, hear expert opinions on how to bring your product to IDO and receive financial support from the community.
First, let’s figure out how IDO works.
IDO takes place in five main phases:
step 1: Preparing the project for IDO: The project team provides potential investors with basic information about the future project. Here, the project team provides investors with a white paper, other technical documentation, and project tokenomics.
Level 2: Submit an application and review the project for DEX. The project team provides all technical information about the project to the platform on which the IDO is planned. The project goes through several phases of selection among the users and a special group of project experts.
level 3: Pre sales. This phase is necessary to create a primary liquidity pool. A limited number of users will be offered the opportunity to purchase a token at a reduced price. You must be on the white list to participate in the presale. At the same time, investors will receive promissory notes for the token, and the digital coins themselves will be given to them already at the IDO stage during the pre-sale. Participating in the pre-sale is a risky undertaking and it’s only worth participating if you are completely convinced of the project. Depending on the number of pre-sale participants, the project team roughly understands the level of marketing promotion of the project.
Level 4: Public sale of the token. The procedure is carried out on a decentralized stock exchange and can take place in several stages. The issuer can sell tokens in batches, increasing the price after each round. It motivates the investor to get involved in the project earlier. The issuer can also go with the flow and arrange an auction where the price of the token is based on supply and demand.
stage 5: listing of tokens on DEX. One of the main advantages of IDO is the lack of additional requirements for listing coins. The issuer thus creates a second wave of investment for its token. The listing of tokens in the DEX is a key to understanding the investment capital of the project.
Now let’s look at the main advantages of IDO
simplicity. Any startup or company can raise additional funds with an IDO, and investors can make profits with no additional requirements. Agree quickly and conveniently?
Immediate listing on the stock exchange. The main advantage of IDO is the fast listing of coins on the exchange. With other methods, such as ICO, many tokens do not do justice to the listing. Investors are very disappointed.
Minimal cost. In the IDO process, smart contracts are responsible for a large initial investment, which makes the process significantly cheaper. And it makes DEX more convenient than centralized exchanges.
Availability. An investor does not have to be a millionaire to invest in IDO. Although some projects still set a minimum entry threshold.
Now let’s take a look at the best IDO projects for 2021.
Bloktopia is a decentralized metaverse developed on the Polygon blockchain. The game consists of a decentralized virtual reality skyscraper consisting of 21 levels. Bloktopia has a response rate of 558x!!!! This is the top 1 IDO project of 2021.
The Ethernity Chain project is taking DeFi’s technology and fusing it with NFTs to create an exclusive pipeline of rare and collectible content. This project was started on the decentralized fundraising platform Polkastarter and received x272!
The NFT game DinoX with play-to-earn mechanics also became one of the most successful IDO projects of 2021. The DinoX IDO was launched on DaoMaker and received x44!
What does IDO expect in the near future?
IDO has become one of the most important cryptocurrency trends and there is no doubt that it will continue to develop and attract new projects and investors. However, to remain popular and effective, IDO needs to improve on a few key points.
One of the advantages of IDO is the availability and lack of control in a decentralized exchange. This can lead to force majeure and the loss of investment grants. For this reason, the industry needs control mechanisms to counteract sudden price changes of tokens, as well as a KYC procedure.
One of the heads of the NFT game project Drunk Robots, which is going to IDO in April, admitted some important things. IDO has gained popularity thanks to the development of the DeFi sector. However, the method has scalability problems. For example, it is difficult for traders from the stock and classic cryptocurrency markets to become an IDO participant due to a lack of information and difficult procedures. This is mainly due to the low level of awareness of the procedure and the possible advantages of participating in the IDO. This also applies to additional activities and their appropriateness.
DeFi users make up a small fraction of the overall crypto market, which is still a relatively small sector but is growing exponentially. Therefore, working on the scalability of DeFi, and IDO in particular, can significantly increase the volume of the industry, which will allow it to compete with CEX.
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