What are crypto IDOs?

What's IDO?

Initial DEX Offering, or IDO, is a way for projects to sell their crypto tokens to the community using a decentralized exchange. This is called an IDEO (DEX).

A typical IDO lets investors lock their funds into a smart contract before issuing a project's native token.

At the token generation event, investors receive new tokens in exchange for frozen funds.

IDOs offer projects a simple, low-cost way to distribute tokens and collect funds while providing investors with more security than an ICO (ICO).

IDO investors need a cryptocurrency wallet like MetaMask. To join IDO and pay transaction fees, add cryptocurrency to your wallet.

You should avoid IDOs. Always do independent research.

This requires examining a project's IDO mechanisms, token economics, vesting durations, and founding team, which can vary by platform and project. Also, IDO mechanisms can be found in different projects.

Before investing in DEX ventures, make sure you can trust them.

IDO function:

IDOs use DEXs to sell tokens. The DEX receives project tokens.

The DEX transfers and distributes funds, while users only send them through the platform.

Smart contracts on the blockchain automate these events.

The DEX that runs an IDO determines its rules and procedures, but there are several common approaches.

A project can request permission to run an IDO on a checked-out DEX. In exchange for tokens, customers lock their funds.

During the token generation event (TGE), investors will receive tokens.

"Whitelist" usually refers to approved investors. You may need to do some marketing or provide your wallet address to get on the list. If so, give the address.

Part of the funds are used to create a token liquidity pool. The team gets the remainder.

Investors can trade tokens after the TGE. Usually, offered liquidity is frozen for a set period.

During the TGE, users receive tokens and LP trading begins.

IDO for Cryptocurrency Fundraising?

IDOs are the next step after ICOs, STOs, and IEOs (IEOs).

IDOs help new projects and startups create a token and raise funds. IDOs provide superior, instantaneous liquidity at all price levels.

IDOs are viewed as a fair way to launch a new cryptocurrency project because they do not use pre-mines to give away coins. Pre-mines aren't used.

First ICO was Mastercoin in July 2013. Ethereum's 2014 token sale raised funds. In the first 12 hours, it raised 3,700 BTC, or $2.3 million.

On April 17, 2019, Index, BitForex, Bit-Z, and Bit-M held the first ICO. Raven Protocol announced in June 2019 that it would list the first IDO on Binance DEX.

IDOs have many benefits.

Most cryptocurrency offerings have become more investor-friendly over time. The following benefits of IDOs support this claim:

You aren't required to do business with a project or trust its smart contracts.

A trustworthy IDO platform will have completed sales. If smart contracts remain unchanged, you can trust the offering.

The sale boosts the investor's cash. After the sale, IDOs will contribute to liquidity pools to make trading easier. Reduced slippage and fluctuations.

Nothing requires registration. You don't need to provide personal information to shop.

Start with cash and a wallet. Everyone can use it. Lack of know-your-customer or anti-money laundering procedures can also be negative (more on below).

Purchasing IDOs for projects is easy and cheap. Launching a token on a decentralized exchange (DEX) is often easier and cheaper than on a centralized exchange.

Many IDOs prevent "whales" from buying a lot of tokens.

Conclusion IDOs are easy to implement, cheap, and easy to acquire, so new cryptocurrency projects use them to raise money.

Token sales have become an industry. Participating in a decentralized liquidity exchange trade is safer than participating in a project.

Choosing the right project is crucial to an IDO's success. Cryptography requires old-fashioned study.