Everything You Need To Know About The IDO (Initial Dex Offering) Fundraising Model
Startups and developers looking to create new projects in the blockchain/crypto industry have multiple ways to raise funds through token offerings.
A token offering is an event where a creator or team invites investors to contribute to an upcoming project in exchange for the project tokens. ICO, ITO, STO, IEO, and IDO are some of the common examples of crypto token offerings.
IDO or Initial Dex Offering is the newest and by far the most popular crypto fundraising mechanism. Here’s everything you need to know about IDOs.
What is an IDO?
Initial DEX Offering or IDO refers to a type of token sale where the project creators launch their IDO tokens on a decentralized exchange (DEX).
Through IDO, developers can conduct their token sales on a decentralized liquidity exchange (DEX) to an existing community of users and investors.
At the same time, IDOs allows investors to find and connect with high-potential digital assets.
Besides an easy platform to launch new tokens and raise funds, Initial DEX Offering is the best way to access immediate liquidity for the trading of new tokens.
Related: What Is The Kulaunch IDO Platform And How Does It Work?
IDO vs. ICO vs. STO vs. IEO
ICO or Initial Coin Offering is one of the earliest methods of fundraising for crypto projects. It gained immense success for a while, because of easy access to funds for new projects.
However, the increasing number of fraud projects eventually led to the fall of ICO popularity.
IEO and STO have emerged as alternative ways of token offering that were arguably more secure and reliable than ICOs. IEO, which refers to an initial exchange offering, involves launching a token sale on an existing exchange that is credible and more secure.
STOs or Security Token Offerings involve the creation of security tokens that are usually associated with real assets, thus limiting their volatility and increasing reliability.
IDO is the latest and probably the most famous type of crypto fundraising method. In addition to launching new tokens on a verified and popular decentralized exchange, it offers immediate liquidity to users.
Purpose & Benefits of an IDO
IDO is a fundraising method for a blockchain project or startup. The primary purpose of an IDO is to raise funds for the development of the underlying project or product.
The IDO token is offered to investors, which may or may not grant access to a particular service or an upcoming project based on the underlying IDO terms. Some of the core benefits of IDO include:
Immediate liquidity
One of the biggest benefits of investing through an IDO is that you get ample liquidity for trading the token.
When a token lacks liquidity, its price can become quite volatile in case of mass dumps. Dedicated token liquidity for IDOs helps keeps the token price stable.
Lower cost
When launching a token on a decentralized exchange, creators do not have to pay a fee or commission to the platform. For example, listing on the Kulaunch DEX is super easy and practically free.
Instant Trading after launch
One benefit of launching your token on an exchange is that it will be ready for trading immediately after the sale is finished. At the same time, buyers and investors can sell their tokens immediately for a higher price.
Transparent and fair fundraising
IDOs generally let anyone list their tokens and launch their presales on the platform without much restriction. Also, since all sales are held on a public platform, everyone gets a fair chance to buy a large number of tokens at the presale price.
How IDO works
Depending on the IDO platform, the process to list and launch a token may differ a little. On the Kulaunch IDO platform, for example, you get the following three options to list a presale:
1. Decentralized presale: Anybody with any KCC token can create a presale on this platform and set his prices.
2. Kulaunch Public IDOs: Certain projects which fulfill the criteria are allowed to get listed on the public platform which enables community voting.
3. Kulaunch Assured IDOs: These are Projects certified by the Kulaunch team on the basis of assessment of the project idea, team, tokenomics, technology, and progress.
