An Initial DEX Offering (IDO) is a way for projects to sell their newly made crypto tokens to the community through a decentralized exchange (DEX).
A typical IDO lets investors lock their money into a smart contract right before a project's native token is released.
During the ICO boom of 2017, cryptocurrency projects that sold tokens to raise money just gave investors an address where they could send Ether.
Investors would get the project's token in return, unless they were scammed.
IDOs have turned token sales into a professional process by using decentralized exchanges (DEXs) to sell tokens.
This gives investors full assurance that they will get their tokens. Crypto projects don't sell their tokens directly to investors.
Instead, they give their tokens to a smart contract that is run by a DEX.
At the same time, investors put money into the same smart contract through the platform.
The DEX then makes the last transfer and distribution of money. These tasks are done by smart contracts on the blockchain, which are fully automated.
Each IDO has its own rules and stages that depend on the smart contract it is based on and the DEX that runs it. Still, most IDOs do things in a similar way:
Before a project can run an IDO on a DEX, the DEX team does its homework. This keeps (most) scam projects off the platform and protects investors.
After a project is accepted, it figures out how many tokens will be made available for sale at a set price.
There is often a whitelist. To get on the list, investors may need to register their wallet address, join a community forum on Discord, or do marketing tasks.
Investors who have been whitelisted can then put the money they want to invest in a smart contract on the DEX. In exchange, they will get the project's tokens when they come out.
Part of the money raised is put into liquidity pools on the DEX, along with the project's token. This makes sure that people can trade from the first day. The project now gets the rest of the money. At the same time, the tokens for the project are sent to the wallets of the investors.
Once the money has been traded, the liquidity pools are open for trading, and the price of the token is set by the market. Depending on the project, some of the money the project gets and the tokens investors get can be locked up for a certain amount of time. This time is usually called the "vesting period."
Tokens can only be used by a small group of people. Each participant gets between $100 and $1,000 on average, but the amount varies from project to project and may be higher. Beginning a business. Tokens are made and added to a pool, which can be used to sell them. At this point, they can already be bought and sold.
First, the project is tested on the chosen DEX, and only after that is it used for IDO.
They won't be able to use IDO if the "exam" doesn't go well. Then, they sell a certain number of tokens at a certain price.
The buyers lock up their money and get the value of the things they bought.
When a person is made, he or she is given a token ( TGE ). To buy, you must be on the list of investors who have been checked out (White paper).
Either an address for a digital wallet or the completion of the project's requirements is needed for verification.
After taking out the amount that goes into the liquidity pool, the project team gets the rest of the money from the sale of digital assets.
When the tokens are unlocked, you can trade them. Depending on the project, coins can be frozen for a few months or even for years.
During the time when the project is looking for investors, the tokens can't be sold.
You will need the following to join IDO:
⇒ Use Metamask or another bitcoin wallet;
⇒ Enough cash in the stablecoin to pay for buying tokens and exchange fees;
⇒ Establish a link with the DApps.
Make sure you have enough money in your account to cover transaction fees before you buy tokens.
After connecting the DApp, you must follow the rules of the exchange, which can be very different.
When people buy tokens, they are allowed to keep them. When the period for generating funds is over, the money is sent to the cryptocurrency wallet.
Please keep in mind that the terms of exchange say that assets can be locked for a certain amount of time or bet on.
Before you agree to the project's terms, you should read the instructions carefully.
Any activity that involves getting assets is full of risks. This is especially true when using real money to buy virtual tokens in the bitcoin ecosystem. You must do everything exactly as told.
Click on the link to sign up. Con artists may give a fake link when they want people to give money to a project.
If you use it, the money will go to the people who made it instead of to the platform. This means that you can ignore tokens. Think about unusual redirection.
Think about the message you want to send. Project ideas are usually posted on well-known and popular exchanges, but they are not always easy to find.
⇒ Don't put money into a project until you've done a lot of research on it. All of the information about the founder and his crew must be carefully looked at. Most businesses that do well are started by people with business experience.
⇒ Give special attention to the definitions. Depending on the rules of the exchange, tokens may be blocked for a long time. You need to know what to expect ahead of time.
⇒ Let go of the amount you invested in your mind. If something goes wrong, you should only invest money that you can afford to lose. IDO is not a way to make money that requires you to put money down first. Not because it was a scam, but because it would take a long time to pay back.
For decentralized initial public offerings, the rules are always changing. There will soon be new ways to trade.
IFO (Initial Farm Offer) and IDO (Initial Farm Offer) are both well-known (Initial Farm Offer).
Assets must be frozen before they can be added to the pool. This is the most important thing to know about IDO.
So, after a certain time, the only way to make money is to use tokens.
How many digital coins the investor gets at the end of the transaction depends on how many people are involved.
As new features, basic sales and unlimited sales are added to attract big investors.
IDO is one of the most common ways to get money for a project right now, and it is expected to become even more common and effective in the future.
⇒ Investors and developers don't work together directly. Instead, they work through an exchange, so investors don't have to trust the smart contracts for the project.
⇒ Some of the money raised is put into pools to make sure that there will be a market for trading tokens after the sale.
⇒ To complete a transaction, you don't need to give out any personal information. All you need is an active cryptocurrency wallet. Everyone is welcome to join the project.
⇒ Unknown tokens may attract investors at first, but it may be hard to do so on large, centralized exchanges.
IDOs let you buy a limited number of tokens, which lets more people put money into the project. This makes the risks less.
⇒ Some of the worst things about the IDO program are:
⇒ Not enough good protection. Everyone is encouraged to take part in the project. There is no way to know for sure that IDO won't be used to launder money or do other illegal things.
⇒ There's no evidence. Through initial decentralized offerings, tokens with low ratings are easier to spread.
IDO and launch pads for rockets (launch pads). Should you put money into a launchpad token?
People can put money into new cryptocurrency companies through Launchpad.
Tokens can be released, developed, and improved with the money raised.
The most important thing that platforms do is bring together investors and blockchain developers into one crypto community.
When people buy digital assets, they try to get virtual currency at a price that is fair.
Before the project can be released, it must go through a thorough review to protect investors from fraud.
The launchpad is bigger and more popular when the requirements for cryptocurrency projects are stricter.
At the same time, the vast majority of online IDOs are just scams, and there are more and more of them.
When looking for a good IDO, you need to think about a lot of different things. The best way to avoid fraud is to look into it yourself (DYOR).
After talking about it, the decision must be based on things that can be measured.
A good sign is when a project comes out at the same time on two major platforms. It doesn't matter which launchpad is used in this situation.
Investors. Do a lot of research on the investors, and if you can, only trust those on the "white list."
Terms. It is important to pay close attention to how the project works with tokens. Some plans say, for example, that you can get assets in a few years.
Long-term investments in small projects are risky in a world where things change quickly. Always think about whether or not the game is fun.
It's not a good idea for a beginner to start a project that isn't shown on trusted platforms and doesn't involve Whitelist investors.
You can learn about tokenomics by looking at the projects that do well. Once you have mastered the details, you can try riskier launches, but only after a thorough, objective analysis.
