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What's an IDO? The most popular IDO platforms in 2023

11 November, 2022 Blockchain
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Along with the launch of many decentralized exchanges DEX, a new coin issuance concept – IDO was officially born and it has received great attention from the crypto community. Let’s find out what’s an IDO, and popular reputable IDO platforms.

I. Overview of IDO

Let’s learn about the overview of IDO in this section.

What’s an IDO and its concept?

There is no official definition for IDO. IDO is an acronym for Initial DEX Offering – Initial coin offering on the DEX.

Decentralized Exchange (DEX) – A decentralized exchange that allows buying and selling transactions to take place peer-to-peer on the Blockchain network without going through any intermediary organizations.

How does IDO work?

The project organize IDO by itself, the issuer of that token independently, not depending on any intermediary on the Blockchain platform through transactions from the project’s product, the issuer. 

Advantages of IDO

  • No permission is required from anyone
  • Instant liquidity
  • Instant transaction
  • Lower cost
  • Crowdfunding is easy and fair for everyone

Disadvantages of IDO

  • Lack of control mechanism
  • Immediate price fluctuations when conducting large volume trades
  • There is no authentic information about the investors.

The main purpose of IDO

The main purpose that IDO aims at in 3 aspects are: Investor, project, and Dex floor.

For investors

Investors participating in Initial DEX Offering cause the token to increase in value. In other words, they hope to receive a return on investment (ROI) for being the first investors to join that crypto project.

For the project

  • Crowdfunding to raise money from the community to develop their projects.
  • If you choose a well-known DEX, the project will be broadly promoted in the exchange’s user community.
  • Build a relationship in the ecosystem of that DEX, and cooperate with similar IDO projects.

For DEX

  • Attract traffic and raise trading volume for the exchange.
  • Create an ecosystem and relationship with potential projects.
  • Increase the reputation and popularity.

II. History of the first IDO project

The first Initial DEX Offering implemented was the Raven Protocol (Raven) project. Raven is a decentralized and distributed protocol that specializes in deep learning (Deep Learning).

Raven Protocol Joins the Binance Chain Alliance

CZ called this form by Initial DEX Offering – a new definition of Token sale. Raven Protocol is the first project to be sold on Binance DEX in this form.

It was listed on Bianance DEX on June 17, 2019, the amount of RAVEN launched during this Initial DEX Offering is 0.3 million Tokens. This is equivalent to 3% of the total supply of Raven. When IDO, the value of each Raven token is around $0.002.

Apparently, IDO is quite young but still a prominent trend.

III. Why did IDO become so popular?

Connecting with the community is a must for the development of a project. So how can Initial DEX Offering helps at this stage?

Back in 2017 – 2018 when tokens were distributed to users through ICOs, IEOs event, users could purchase tokens at a bargain price. Lucky users who buy tokens are always waiting for a pump and expect a profit of x5 – x10. At the same time, a high level of profit requires a large amount of money to be poured in.

Example: Konomi IDO with an Initial Cap of $200,000. In order to x2, there must be an insertion of $200,000 worth of funds. Correspondingly, pour in $800,000 to get x4, and $2,000,000 to get x10. However, with the growth of AMMs nowadays, putting up prices won’t cost that much.

This is an efficient Marketing method as the project will be repeated constantly with huge ROI numbers and interest from the community (or maybe terrible). In addition, a project can measure its “hotness” if the ROI goes as expected.

Readmore: What is Blockchain? How is it revolutionizing everyday life?

IV. Today’s popular Initial DEX Offering platforms

There are many IDO platforms today, let’s take a look!

Polkaster

Polkastarter is a DEX that supports cross-chain pool creation and token auctions. It enables projects to raise capital in a Decentralized, permissionless and interactive environment based on the Polkadot platform.

Recently, Polkastarter is undoubtedly the hottest IDO platform on the market. Projects open for sale on Polkastarter are extremely profitable.

The highest profit that investors buy IDO on Polkastarter. Source: Twitter Kyros Ventures.

However, the number of people who want to buy IDO is too large and increasing rapidly, so the request to buy IDO on Polkastarter becomes more and more difficult.

Bounce

Bounce is an automation-driven decentralized platform for auctions and OTC markets.

As a decentralized auction mechanism, Bounce offers users an extremely competitive Swap environment. Not only that, the Bounce platform also integrates liquidity mining, decentralized governance and staking mechanism.

Although IDO projects on Bounce Certified are few, they bring high profits to investors. Such as Umbrella Network.

Profits of Initial DEX Offering projects on Bounce Certified. Source: Twitter Kyros Ventures.

FalconSwap

Recently, FalconSwap is the Initial DEX Offering platform that has drawn the attention of investors.

Falconswap is a Layer-2 Protocol on Ethereum that supports investors with security when changing cryptographic messages on other DEXs, AMMs and in addition to minimizing gas.

Up to now, Falconswap has about 5 project IDOs, in which there are some prominent names such as Lendefi, GUM, DWZ:

  • With the Lendefi project, the ICO price of 0.40 USDC after listing reached 1.83 USD (ATH) x 3.5 times the IDO price (according to Coingecko data).
  • With the GUM project, the ICO starting price is 0.10 USDC. Reaching the (ATH) x38x against IDO at $3.82, GUM is currently trading at x17x (according to Coingecko).

V. What IDO needs to do to be able to go long distances in the future

Initial DEX Offering is the newest way, with its own advantages that will help crypto projects bring their tokens to the public. However, with some outstanding shortcomings, IDO needs to have changes and improvements for future development. That it would be possible to guarantee the successfulness of projects as well as to promote the growth of the platforms.

One improvement that should be emphasized is scalability. Currently, only decentralized finance (DeFi) projects are raising money through IDO. Nevertheless, that does not mean that other projects in the crypto space cannot use this form of crowdfunding. Indeed, for these projects to be successful, it is necessary to attract interest from current DeFi users to invest in the project’s tokens.

Besides, another factor to give notice is that regardless of the growing interest in IDOs, CEX exchanges such as Binance or Coinbase still hold sway over the market. Investors are probably more interested in when Coinbase lists a coin than when the next IDO whitelist takes place. 

Certainly, this will possibly change as the awareness of decentralized exchanges (DEX) grows.

The future of Initial DEX Offering may be bright, but more awareness is required. Moreover, DeFi users are only a minor part of the market. Therefore, while IDO is not likely to replace ICOs or IEOs anytime soon, it has introduced a new, and gradually improved, crowdfunding model.

VI. Conclusion

Initial DEX Offering is a form of helping projects attract capital from the community and also a way of marketing for the project when it brings great profits to participating investors. In addition, it is also an interesting playground for both large and small capital investors and it will remain hot until recent years. However, IDO still needs improvement in order to enhance its attractiveness and fairness.

Hopefully through this article, you can clearly understand what’s an IDO, the popular platforms today.

Readmore: Top blockchain development companies in 2022

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