Initial Coin Offering or ICO was a popular way of crowdfunding in the first years that cryptocurrencies were developed. In this method, cryptocurrency projects presold their tokens and gathered the required budget for running their project. The popularity of ICOs faded over time due to several reasons, but the concept of “initial offering” has still remained popular. In this article, we will go through the most recent form of initial offering, called Initial Dex Offering or ICO. We will also take a look at how to participate in an IDO and introduce some famous IDO launchpads. Stay with us.
What is an IDO?
Decentralized Finance or Defi is considered one of the most important achievements of cryptocurrencies, and the main reason is how it eliminated intermediaries and third parties. Cryptocurrency exchanges were always criticized for being centralized. With the birth of Defi, and after that, decentralized exchanges, this challenge was completely over. With decentralized exchanges, users could easily trade tokens without relying on centralized institutions and companies. But this wasn’t the only achievement of decentralized exchanges. Among other achievements of decentralized exchanges, we can refer to the possibility of running Initial Dex Offering or IDO.
IDO, as its name suggests, is a form of crowdfunding that is run on a decentralized exchange. You can easily guess that this type of crowdfunding is decentralized and this is one of its advantages. Besides, a big challenge that ICOs suffered from was that there was no guarantee their tokens would be listed in exchanges and could be sold. This increased the number of scam projects. Scammers could easily design a fake project, presell the tokens, gather the money, and run away. This was actually the main reason that ICOs lost their popularity and gave their place to Initial Exchange Offerings or IEOs.
In case you don’t know, an IEO is a type of crowdfunding that is done in (centralized) cryptocurrency exchanges. IEOs solved the problem of scam projects because the exchange first evaluated the project and then listed the token immediately before the official launch.
By the way, IEOs also suffered from two big problems: centralization and high fees.
Besides the issue of centralization (which is very critical in the world of cryptocurrencies), centralized exchanges required a high amount of fee for running an IDO (even thousands of dollars). So, this was how IDOs were developed.
Therefore, IDOs are generally similar to IEOs, but with the difference that they are run on decentralized exchanges, not centralized ones.
Crypto Launchpads; Platforms for Running IDOs
Any decentralized exchange that supports running IDOs is called an IDO launchpad. Following the launchpads regularly allows you to find new projects before going public and invest in them before their price appreciation. Some of the most popular IDO launchpads include:
• Polkastarter: an IDO launchpad on Polkadot with more than 200,000 users.
• Trustpad: a decentralized multichain platform that allows different projects to gather funds.
• Solstarter: the first IDO launchpad on Solana.
• DuckSTARTER: a famous IDO launchpad that supports Ethereum and Binance Smart Chain.
In this article, we tried to investigate the newest type of initial offering called Initial Dex Offering (IDO). As we mentioned earlier, initial offering has always been popular in the world of cryptocurrencies. Now after passing several types of initial offerings and experiencing their advantages and disadvantages, we have reached IDO. Definitely, IDO is not flawless either, but it has succeeded to overcome some of the previous challenges. This type of initial offering is conducted in a fully decentralized manner and this is the biggest reason for its popularity. Furthermore, it guarantees the listing of the token and also requires the minimum amount of fee.