Bancor launched the first IDO project in 2017. Since then, several other projects have followed suit, including Polkadot, Filecoin, and Algorand. IDOs have become increasingly popular in 2020, with many successful launching IDO taking place.

The most successful IDO to date is undoubtedly Filecoin, which raised $257 million in a matter of hours. However, there have been several less successful IDOs, such as Polkadot, which only raised $30 million.

Many popular crowdfunding methods lost people’s trust recently and that’s why launching an IDO seems an easy task but the main difficulty is to make it a success. Here, success means good sales of the project’s Token and then the development of the actual product using the fund received.

If you are planning to launch an IDO then this article is for you. It will provide the basic details of IDO, it’s working, and benefits and also help you in its launch by providing some core details of this process. 

So let’s start with the basic introduction.

What is an IDO?

An Initial Dex Offering (IDO) is a new type of cryptocurrency offering that is currently gaining popularity. In an IDO, a project sells tokens to investors before being listed on a decentralized exchange (DEX). This allows the project to raise funds without going through the traditional venture capital route.

IDOs are a type of crowdfunding that allows startups to raise money by selling digital tokens. These tokens can be used to access a product or service offered by the company or can be traded on cryptocurrency exchanges.

The fact that IDO is held on a decentralized exchange (DEX), is one of the biggest differences between it and its previous versions. The applications are not linked to any centralized marketplace. Therefore they are able to offer special benefits and low entry barriers to both projects and retail investors. Naturally, IDOs and non-fungible tokens are ideally suited for DeFi and privacy initiatives (NFTs).

The main advantages of IDO are that it is open to a wide range of investors, it is faster and cheaper to launch, and it gives the project more control over its tokenomics. The main disadvantage is that it is risky for investors, as there is no guarantee that the tokens will be listed on the DEX or have any value.

Despite the risks, IDOs are becoming an increasingly popular way to raise funds for cryptocurrency projects. If you are thinking of launching an IDO, it is important that you do your research and make sure you are aware of the risks involved.

How do IDOs work? 

The working of an IDO can be divided into two phases. A launchpad, a platform for incubating, publicising, and facilitating fundraising for fresh cryptocurrency ventures, serves as the setting for the first stage. Because of their extensive professional networks and vast community bases, launchpads can provide the foundation for early project development and project launches with high-impact and high-growth potential. Holding the launchpad’s native token entitles investors to projects before they are made public on decentralised markets. Members of the Launchpad community get exclusive access to tokens at a floor price determined by the platform’s initial open funding round.

Benefits of Launching Initial DEX offering (IDO)

There are various crowdfunding methods in the crypto-verse. Some of the benefits of launching IDOs are listed below, showing you why IDO is different.

immediate liquidity

A token’s liquidity is crucial. A token’s value may suffer greatly if it cannot be immediately liquidated. A liquidity pool offers liquidity without slippage at all price levels. The tokens must have some value in order to enable token swapping in the liquidity pool because this ensures that they will gain liquidity.

instant trade

The moment a project’s token gets introduced, investors can start trading it. Early token buyers can sell their tokens for more money during the IDO. When the first investor purchases a token, the price of that token begins to shift.

Lower costs

The project developers must first cover exchange fees with ICOs and IEOs. The proposal must then wait for exchange approval before formally being listed. Utilizing IDOs saves the team money on costs.

Furthermore, there is no requirement to get authorization from anyone because the exchange is totally decentralised and self-regulated. It only costs a few cents in gas fees to deploy a new smart contract if the project’s token uses a liquidity exchange. The asset token and liquidity pool are also governed by smart contracts.

Effective means of fair and secure fundraising

The impartiality of an IDO is the second advantage. In ICOs and IEOs, tokens are frequently pre-mined and occasionally pre-sold to private investors, essentially preventing small investors from participating straight immediately. The tokens will subsequently be sold to the wider public by these private investors, providing them with an advantage over smaller participants.

To avoid whales and bots from locking out small investors, IDO launchpads typically set a cap on the number of tokens that are offered. This guarantees that a trustworthy and equitable coin is available to all investors.

The generation and liquidity of tokens can start right away with an IDO launch, unlike traditional fundraising techniques. At first, private investors pay a lower price for a big quantity of tokens. Additionally, the token’s value increases when it is offered for sale to the general public.

Precautionary steps you must take while Launching an IDO

After knowing the benefits it is time to know all the precautionary steps you must take while Launching an IDO.

Take all the precautionary steps

Since decentralized exchanges lack control mechanisms and safety features, Anti-scam vetting and Know-Your-Customer (KYC) procedures need to be included in your platform. It will add a trust factor to your platform and will also keep transactions and investments safe. Some DEXs offer marketing support comparable to that provided by centralised exchanges to lower the risk.

Oversubscription 

IDOs place a greater emphasis on small token sales than other crypto crowdfunding strategies do. Large and well-known IDO projects are consequently regularly oversubscribed, making it challenging for small investors to participate. Because of this, several IDO launchpad systems use pre-set whitelists to regulate the number of users. Investors have the option of investing in the launchpad’s tokens first or entering the lottery first.

Talk to experts

Even if you have the idea and basic knowledge of the process, you will need the help of professionals to properly launch your IDO and make it a success. Just contact or outsource reputed firms and they will take care of everything from creating tokens to marketing them.

Basic Procedure to Launch a Successful IDO

IDO is one of the popular fundraising methods in the world of cryptocurrency. There are a few steps that need to be taken in order to launch a successful IDO. 

Devise a Business and Marketing Strategy

Make a plan that is rational for the token offering’s DEX rollout. The project’s goal, token types,  financing distribution, and the blockchain it will use should all be mentioned in the plan. Additionally, you must create a general marketing strategy and plan to steer the project beyond the IDO and maintain momentum.

Create a Token

First, the project will need to create a token. A token is a digital asset used to represent something of value. Tokens can be created on the blockchain or through smart contracts. The process of generating tokens depends on the platform that is being used. To avoid most of the obstacles you should hire an experienced token development company like SAG IPL. It will take care of token protocol, clean development, and even token listing.

List it on DEX

Once a token is created, it must be listed on a decentralized exchange (DEX). You have to contact the DEXs by email and other available modes of communication. Each and every DEX features its own sets of eligibility criteria, fees and rules and your token need to fulfil them. Hire an experienced company and they will take care of everything from choosing appropriate DEX platforms and finding the way to connect and list your token.

Make it viral

Once the token is created and listed on the DEX, the project must announce an IDO to the community. This can be done through social media, forums or other channels. Following the announcement of the IDO, users will be able to purchase tokens with the cryptocurrencies they already have.

Utilise the fund to develop the promised product

The project will then need to wait for the IDO to end. Once it ends, the project will have raised funds and will be able to use them to develop the project further. Additionally, you also have to keep investors up-to-date with the product development progress.

Why we should hire an experienced firm to launch an Initial Dex Offering?

There are a few key reasons why it is important to hire an experienced firm to launch an Initial Dex Offering:

Understanding of DEX

An experienced firm will have a deep understanding of the Dex ecosystem and how to best launch a successful offering. Thus they will handle everything without disturbing you and without making any mess.

Their Network

Since they are in the business for a while, they will have access to a wide network of potential investors and can help you reach your fundraising goals. They will be able to filter the audience for your project so it will be easier for you to convert most of the visitors into investors.

Guidance

Very few people know about crypto and even fewer know the right way to launch an IDO and make it a success. An experienced company will be able to provide guidance on how to structure your offering in order to maximize your chances of success.

There are many other factors where a professional team can help you and your project better, such as in choosing DEX, token distribution, sales strategies, marketing strategies, and further steps. So, if you are planning for launching an IDO then make sure to either keep a few experts on your team or take help from a professional firm.

Looking for an expert? Contact SAG IPL

If you are looking for an expert and experienced company to handle your IDO launch from token development to marketing then you can hire SAG IPL. It is one of the highly reputed full-service IT companies from Jaipur, India. The company has years of experience in this field so they will make your IDO a success for sure.

SAG IPL has been a primary choice for various other services as well like crypto website development, IDO marketing, token development, ICO launch, STO launch, exchange development, etc. They have a team of experts in this industry and they are dedicated to meeting all the business demands of their clients. You can trust them and they will ensure you get what you paid for.  Hire SAG IPL now and experience world-class IDO launch services.

Conclusion

An Initial Dex Offering (IDO) is a new way to raise funds and launch projects in the decentralized space. Unlike an Initial Coin Offering (ICO), which sells tokens to investors in exchange for fiat or cryptocurrency, an IDO sells tokens to users in exchange for other cryptocurrencies, This allows projects to launch without having to go through the process of listing on a centralized exchange. 

IDO offer numerous benefits to the project, its owner and investors as well. Meanwhile, since it is part of cryptocurrency and has various complications thus hiring an experienced company will be a great move to make it a success.

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