Initial DEX Offering, or IDO, is an innovative fundraising strategy adopted by businesses across the globe. Alternatives to IDOs include ICOs and STOs.
Prior to exploring the details of an Initial Dex Offering, let’s review the concept of funding through token sales. When it comes to raising funds to produce new goods or expand operations, a firm can turn to banks and venture capitalists for loans.
However, some businesses, especially startups are unable to get a loan from banks due to several reasons. This is when building an IDO fills the bill. It involves building a token, which is then listed on the exchange, and businesses raise funds through these tokens.
In an ICO, which is similar to an IPO procedure, the issuers control all the duties. In an IEO, however, this is executed through an exchange host that is centralized. Whenever we evaluate IDO to some other two possibilities, we see that it is effectively a cross between both ICO & IEO. One and only difference is that an Initial DEX Offering uses a decentralized exchange rather than a centralized exchange.
The IEO & IDO are essentially similar; in fact, IDO may be referred to as the “updated” IEO. Companies in both systems can swap tokens using investors or traders. However, IDO overcomes some of the concerns associated with IEO, such as issuers’ inability to trade tokens on rival exchanges. For listing the token on an exchange, issuers must additionally pay a significant token stack or a substantial sum.
The very first IDO had been on Raven Protocol, which was originally characterized as Binance’s idea. The Raven protocol is a distributed deep-learning training protocol that is intended to deliver cost-effective and faster deep neural network training. This was listed & maintained for 24 hours on June 17, 2019. A sum of 3% of such token supply was awarded, raising the worth of each Raven token to 0.00005 BNB.
Transparent and equitable fundraising
When a token sale is live, individual investors frequently purchase a large token at a reduced cost. They can earn a profit significantly from reselling the tokens to the common public. To create a fundraising event utilizing this Initial DEX Offering fundraising method, businesses, especially startups, wouldn’t need any centralized exchange or permission. Furthermore, anybody, not just private investors, can join an IDO.
An additional perk of IDO seems to be that this could be instantly transferred. This enables investors to buy tokens as soon as they are produced and again sell them at a higher cost after some time in the IDO. Their initial token value worth $0.26 rose to almost $2 during the UMA protocol initiative, for example.
Liquidity on demand
Liquidity refers to the ability to purchase or sell anything rapidly. The project’s token acquires immediate liquidity within an IDO, potentially boosting the price of the token.
The IDO approach was developed to address some of the problems raised by the Initial coin offering, STO, and IEO strategies. It eliminates the need for authorization to hold a crowdfunding programm to create revenue.
Of course, the IDO is the next step in the crypto fundraising process (IDO). However, there is still work to be done. Control mechanisms must be included in the present IDO paradigm. This can help to avoid token price variations till the campaign is finished. Furthermore, issuers may have greater control over which one buys how many tokens by introducing KYC requirements.
If you are planning to launch your IDO, Antier Solutions can facilitate your journey. As an experienced IDO development company, we offer customized services to help you successfully launch your IDO.
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