What is an IDO Initial DEX Offering? Updated 2024

In addition, IEOs are limited by geography since many crypto exchanges don’t accept customers from certain countries. For example, some exchanges don’t accept US customers since it remains https://www.xcritical.com/ unclear whether crypto tokens are securities under US law. IDOs are available to everyone, regardless of what countries they live in.

Step #5 Learn How to Use Uniswap and Other DEXes

• It takes place on a decentralized liquidity exchange (DEX) through the use of liquidity pools and smart contracts.
• Initially, IDOs used decentralized exchanges (DEX) and smart contracts to facilitate the transfer of tokens and funds between parties.
• For example, a project wanting to sell its token for BNB in an IFO on PancakeSwap will require investors to stake BNB and CAKE in the BNB-CAKE LP.
• So, it was just a matter of time until token sales would take advantage of this.
• The DEX is also responsible for creating and running smart contracts and handling funds.
• Investors don’t have to wait long periods of time for the tokens to be listed on an exchange.
• Unfortunately, the lack of centralization greatly increases the risk of a rug pull scam.

In ICOs, pre-mining was Fintech a method to reward the project’s founders, its developers, and its early investors. They were allowed to mine or take their share of the blockchain-based tokens before the ICO was launched to the public. IDOs do not allow pre-mining, thus even the project founders do not gain an advantage over the public investors.

IV. What Sets IDO, IEO, and ICO Apart?

First, ICOs are considered by many investors to be more fair than IDOs. Crypto presales are usually open to any investors and don’t have whitelisting initial dex offering development requirements. All investors need to do to join an ICO is connect a crypto wallet.

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Evidently, there were smart people who quickly caught on to this property of liquidity pairs as a great way to launch new crypto tokens. Projects launching new tokens are looking for ways to create maximum liquidity as quickly as possible since this is a key factor in the token’s survival chances. Investors can transfer tokens to their wallet from another crypto wallet. They can also buy crypto using fiat at a centralized crypto exchange and then transfer the tokens to their wallet. We offer a calendar that shops all upcoming token listings on DEXs, including tokens that are going straight to an IDO with no presale. Investors can check not only which DEX a token is listing on but also whether there are any whitelisting requirements.

What is Initial DEX Offering (IDO) in Crypto?

This is typically done when a project has a specific goal in mind. The next way is still having a fixed supply, but allowing for a dynamic range in price, where funding determines the overall cost per coin or token. The last way is to establish a fixed price with the supply remaining dynamic, so funding ultimately decides the supply.

There’s a large number of DEXs across different blockchains who offer IDO services. A simple way to search through them is through CoinGecko’s list of Top Launchpad Coins by Market Capitalization. Any DEX that has its own coin, which is almost all of them, is present on the list. However, don’t forget that a large market capitalization doesn’t necessarily mean the DEX is reliable or trustworthy. You should use this information together with other fundamentals before choosing a DEX to use for an IDO.

Other DEXs require projects to be voted on by the DEX’s community of tokenholders or sponsored by several community members. Popular IDO platforms, such as Polkastarter, Binance Launchpad, DAO Maker, Poolz Finance, and Balancer, have emerged to facilitate token sales for various projects. However, it’s important to research and assess the platform’s reputation, features, and the projects it hosts before participating in an IDO.

In the case of IEO, which is known as the Initial Exchange Offering, there’s a centralized crypto exchange. While IEOs are more on the restrictive side, IDOs are comparatively lenient. While IDOs resolve the drawback of ICOs in terms of liquidity and access to tokens for small investors, there’s a lack of control over the process that needs to be solved for. With IDO, crypto projects are free from the obligation to acquire any permission to start their project.

IDO platforms like the DAO Maker launchpad yielded average returns of up to 3,200% during the crypto bull market. While the current average return hovers around -1%, many investors think that IDOs could start to deliver huge gains again. Trading in a new token usually begins immediately after a financial IDO. Traders who receive the token during an IDO may be able to sell their coins right away on the DEX that held the IDO or on another DEX. However, some IDOs come with lock-up periods that prevent investors from selling their tokens for several days or weeks.

This should bring up the IDO along with pricing information for the new token. To buy tokens during an IDO, investors will need a cryptocurrency supported by the DEX. Most DEXs support Ethereum, Tether, and a wide range of other cryptocurrencies, but investors should check whether there are limitations on what tokens are accepted for an IDO. Once an investor has found potential IDOs to join, it’s important to thoroughly vet them to find the best projects and avoid scams. We’ll offer some tips for how to find the top IDO projects to invest in.

Our platform also offers tools for investors to research the development teams, tokenomics, and more behind each new IDO token. This enables investors to find the best projects even when DEXs don’t provide research about the tokens they’re listing. Centralized exchanges usually charge a listing fee plus take a percentage of the total token sales. Decentralized exchanges may charge a small listing fee, but mainly earn revenue from the trading fees that an IDO generates. Many projects hold a presale or another form of ICO prior to holding an IDO. In this case, the IDO typically lists the token at a higher price than what investors could buy it for during the ICO.

Initial DEX offering (IDO) is a method of raising funds for cryptocurrency projects. It is a permissionless, crowdfunding platform for launching new crypto tokens in the DeFi space. ICOs face a lot of challenges ranging from hackers, and whales to human error. All this led to the rise of other fundraising models such as security token offerings (STO) and initial exchange offerings (IEO).

However, their decentralized and transparent nature could provide them with an easier regulatory path than ICOs. The barrier of entry for a Dex is significantly higher, as most don’t support fiat investments, meaning only the most crypto-literate can participate. It can be easy to get carried away and invest more than you should. But don’t forget, sales are still risky, and even with sound research, you could still be the victim of a scam, fraud, or rug pull. There may be a delay in when you get your tokens, or they could even be staked and locked for some time.