WHY DO WE NEED TO DEVELOP THE INITIAL DEX OFFERING?

Initial DEX Offering Development (IDO)

Initial DEX Offering Development, or IDO, is a brand-new, innovative type of decentralized, permission-free crowdfunding platform that is pioneering a brand-new way to raise capital in the cryptocurrency sector.

An IDO launch signifies the introduction of a coin or token through a decentralized liquidity exchange. The liquidity pools used by this particular cryptocurrency asset exchange allow users to trade tokens like stable coins and crypto coins. USDT/ETH is one such liquidity pair.

A BETTER MODEL FOR CRYPTO FUNDRAISING, IS IT?

IDOs have taken the place of a number of other cryptocurrency fundraising models, including IEOs, STOs, and ICOs (IEOs). IDOs are a fantastic choice for new initiatives and businesses. They are eager to introduce a token and get access to money right away. Thanks to their mechanics, they provide better and quicker liquidity at every price point.

Contrary to the aforementioned fundraising methods, IDOs are generally regarded as a fair way to start a new cryptocurrency project by avoiding pre-mines, an issuance system that favors project founders over community members.

The first ICO ever was the Mastercoin one, which took place in July 2013. In the first 12 hours of a token sale in 2014, Ethereum raised 3,700 BTC, which at the time was equivalent to roughly $2.3 million.

The first IEO was introduced by the exchanges Idax, BitForex, Bit-Z, and Bit-M on April 17, 2019. The first-ever IDO, which would be listed on Binance DEX, would be introduced by Raven Protocol in contrast, according to a statement made in June 2019.

WHAT HAVE IDOS STARTED THAT HAVE BEEN SUCCESSFUL?

Despite being the first to attempt it and even claiming in their blog that they were unaware of what an IDO was because it hadn't yet been implemented, Raven Protocol is regarded as a successful project.

RAVEN PROTOCOL IDO

This distributed and decentralized deep learning training protocol uses deep neural networks. By providing quick and inexpensive solutions that utilize the blockchain, The Raven Protocol aims to transform the AI and machine learning industries, which are currently dominated by major corporations. The native RAVEN token is used to compensate contributors for sharing their computing resources, while the utility token is used for AI training.

UNIVERSAL MARKET ACCESS PROTOCOL IDO FOR

Despite initial IDO issues, the Universal Market Access (UMA) protocol was introduced successfully. As a result, DeFi developers are now able to build fictitious assets—collateral-backed tokens with erratic values—on Ethereum. It launched its token sale on the decentralized exchange Uniswap in April of last year with a starting price of $0.26 per token. To get that price, UMA had to put $535,000 in Ethereum into a recently created liquidity pool.

However, Uniswap stands out because it prices tokens using a bonding curve as opposed to order books. As investors lined up to purchase the UMA token, the cost of the token quickly rose. due to traders paying more for gas in an effort to outbid one another. Minutes after launch, the cost of UMA's token rose by more than $2. Some buyers complained that they paid more for their purchases than pre-sale investors did. At just over $1, the price eventually reached stability. This, however, highlights the issue with Uniswap rather than UMA.

UMA currently has a market capitalization of more than $1.5 billion despite this early setback. It costs more than $25 for a token.

SUSHISWAP IDO

SushiSwap, an Ethereum-based decentralized cryptocurrency exchange that competes with Uniswap to be the most well-known decentralized exchange, is another comparable case. In September of last year, users of SushiSwap reportedly transferred over $1.14 billion worth of Uniswap's locked crypto assets to the SushiSwap platform.

It's interesting that the platform decided against holding an initial coin offering (ICO) for SushiSwap in order to reward liquidity providers (LP) on Uniswap by staking their LP tokens on SushiSwap. Users were compensated for their efforts with SUSHI tokens. During the first two weeks of the platform, users who staked their Uniswap LP tokens on the initial protocol received 1,000 SUSHI tokens every Ethereum block, or roughly every 12 seconds.

DO IDOS EXIST AND WHY?

When ICOs and token sales gained popularity in 2017, raising an estimated $4.9 billion by the end of the year, many projects were attempting to use the blockchain to solve problems. It is challenging to deny that ICOs have a number of issues, including being centralized and vulnerable. While many have succeeded, many more have failed. The discrimination of third parties, vulnerability to theft and human error, and lack of privacy are some other significant drawbacks of ICOs.

The issues with ICOs are being attempted to be addressed by this new fundraising model. Because IDOs are decentralized, they are creating new opportunities for the cryptocurrency market. One can introduce a blockchain product. By utilizing IDO crowdfunding, it goes beyond malicious third-party influencers. Additionally, it eliminates any issues with hackers and human error. Additionally, holders and buyers of token coins are immediately secured with regard to their wallets and private keys.

ADVANTAGES OF AN IDO

An initial DEX offering development has a number of glaring advantages over initial exchange offerings (IEO) and initial coin offerings (ICO).

Another thing to keep in mind is that, despite the growing acceptance of IDOs, centralized exchanges like Binance or Coinbase continue to exert considerable influence over the market. Investors don't ask when the upcoming IDO listing will take place. They are presently interested in learning when Coinbase will list a specific coin. Naturally, this will probably alter as more people become familiar with DEXs and DeFi in general.

LET'S DISCUSS A FEW OF THOSE RIGHT NOW.

when an IEO or ICO is used to fund a project. Before it can be listed, it must first pay the exchange's fees and wait for the exchange to approve the project. IDOs offer a completely decentralized service. Projects are not required to pay exorbitant fees or obtain approval from anyone.

Furthermore, active community members assess projects and tokens without waiting for an exchange, allowing for both small-scale projects and extensive collaborations.

In contrast to IEOs and ICOs, which require a preliminary waiting period, IDOs offer immediate access to liquidity and trading. IDOs also help users work more efficiently by offering a single interface for a secure wallet and trading platform. To make things simpler for users, IDOs may also support a variety of wallet types.

WHAT WAY WILL IDOS BECOME IN THE FUTURE?

The newest technique for distributing tokens to the general public for crypto projects is through IDOs. The same goes for ICOs, IEOs, and STOs; they still need to be improved. The UMA IDO demonstrates this. The lack of a control mechanism, however, results from a decentralized exchange with IDOs. As seen in ICOs, IEOs, and STOs, removing token price fluctuations or enforcing KYC requirements are crucial fundraising controls to have.

Scalability was given top priority. Currently, only decentralized finance (DeFi) projects have raised funds through IDOs, but this does not preclude other cryptocurrency-related projects from doing the same. Naturally, for these projects to be successful, some current DeFi users will need to be interested in purchasing a project's token.

Why? simply because learning to use DeFi platforms has a learning curve. It might present a challenge for the average crypto trader. Another improvement would be to increase awareness of and educate people about DeFi as this industry grows.

By decentralizing finance, cryptocurrencies aim to increase financial accessibility. IDOs are a step toward accomplishing this. However, who is to say whether a new project is the best course of action or a possible con? As a result, determining a coin's value can be difficult.

IDOs could have a bright future, but more training is needed. Additionally, the DeFi user base makes up a very small portion of the entire crypto market. Although it is still a small industry, it is growing quickly.