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What Is IDO? What Are Crypto Launches?

Decentralized finance has become one of the most brilliant achievements of blockchain networks, including the Ethereum network, over the past few years due to its ability to eliminate third-party intermediaries and use smart contracts.

With the expansion of DeFi, one of the biggest criticisms of digital currency exchanges, namely “centralization,” was removed, and a new type of exchange emerged, called decentralized exchange (DEX).

Decentralized exchanges had many achievements, the most important of which was the possibility of exchanging digital assets without the need for intermediaries. Of course, this was not the only achievement of these exchanges, and among their other achievements, we can mention the possibility of implementing IDO.

 

IDO definition

IDO stands for Initial DEX Offering. Initial Dex Offering, or IDO, is a new way to raise capital in the growing digital currency market that allows decentralized exchange users to list their tokens for pre-sale at these exchanges and raise a significant portion of the initial capital needed to launch their project and collect micro-investors.

This process benefits both investors and project owners; This is because project owners receive the capital needed to start their own business, and investors make a good profit after the official launch and public offering of tokens, which is usually accompanied by a significant price increase.

One of the oldest and most famous IDOs belongs to the Raven Protocol, which was conducted in 2019. To do this, the Raven development team chose the Binance DEX decentralized exchange and offered their new tokens at a fixed price on the platform.

 

Differences between IDO, ICO, and IEO

One of the cornerstones for a better understanding of IDO is examining the differences between ICOs and IEOs.

The nature of these three processes is largely the same, and all three are different types of “initial public offerings.” The only difference between the three is the way they are offered. In 2017, ICO initial publicity projects in the crypto industry reached their peak and got a great response from investors.

However, because there was no specific oversight of such projects, the number of scam projects launched to deceive and attract investors increased, causing many people to lose their money through these projects.

After a while, initial exchange offering (IEO) projects emerged; Assuming that this process is done in centralized exchanges, instead of everyone holding the initial coin offering alone.

The exchanges first personally validated the project that was going to be offered for the initial public offering, and if they found the project to be credible, they listed its tokens for the initial public offering. Since the token was to be listed in an exchange office, investors were more confident in choosing the project of their choice.

The initial exchange offering had solved the problem of fraud and fraudulent projects; But it was accompanied by two problems: “centralization” and “exchange fee”.

The decentralization and the elimination of intermediaries are one of the main reasons for the emergence of cryptocurrencies. However, many exchanges of these currencies are self-centralized. In addition, the initial exchange offering required the project owner to pay thousands of dollars in fees. Therefore, a newer type of initial exchange offering called the initial decentralized exchange offering was born, which was done in DEXs instead of centralized exchanges.

This method is very similar to the initial exchange offering; To the extent that some people even consider IEO and IDO to be almost identical and believe that IDO can be said to be essentially a new IEO.

 

Crypto launches

One of the terms you most likely hear in the IDO literature is the term “Launchpad.” Launchers are the platforms that host IDOs, and you can find new projects on them.

In other words: Any decentralized exchange that enables IDO implementation is called an IDO launch pad or platform. Constantly following the launch pads allows users to find new tokens before they become public and invest in them before prices rise. The launch pads are also equipped with an authentication process to minimize the possibility of fraud and theft of users’ funds.

Familiarity with the nature of launchers and some of their famous examples is essential to a better understanding of the IDO process. Therefore, we dedicate this section to the introduction of famous launch pads.

 

1. Polkastarter

Polkastarter is a decentralized exchange on the Polkadot network that acts as a launchpad for pre-selling tokens and raising public funds.

 

2. Trusted

TrustPad is a decentralized, multi-chain platform that enables projects to raise capital and provides investors with the opportunity to invest early in new projects.

 

3. Solstarter

It is the first IDO launcher on the Solana blockchain that provides decentralized and equitable financing. This launchpad is suitable for projects that intend to work on the Solana blockchain.

 

4. DuckSTARTER

It supports Ethereum and Binance Smart Chain networks. Participating in DockStarter IDOs also requires DUCK token sharing and authentication.

 

5. Launch

Binance Smart Chain BSCPad is the first IDO platform to be launched on the Binance Smart Chain network.

source: cryptopotato.com

 

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