What is an IDO?
An Initial Dex Offering (IDO) is a fundraiser that results in a token being put on the market on a decentralized exchange like Uniswap or PancakeSwap .
During an IDO, projects wishing to finance themselves appeal to the general public through IDO Token Launchpad Development, platforms specializing in IDOs. Investors like you and me can, under certain conditions, buy the tokens before they are made available on the market.
If the supported project proves promising, they benefit from prices that are often much lower than when they were released on the market, but there is not room for everyone and the lucky ones are rare.
How to participate in an IDO?
With the global rise in cryptocurrency prices, we see a multitude of launchpads sprouting up to support the impressive amount of new projects. All these new launchpads are trying to find the perfect system that allows all accounts, from the smallest to the largest, to participate in IDOs.
Each launchpad tries to innovate and offers a different participation system, but the overall scheme is always the same :
1. Purchase the platform token to turn into a part
For example, to participate in Polkastarter IDOs you need POLS, for Duckstarter you need DUCK, for Poolz Finance you need POOLZ, for Paid Ingition you need PAID, etc.
Obviously, bigger holders are often rewarded with more chances of having an allocation (amount of participation in the IDO) or a higher maximum allocation.
As you have to buy the Launchpad Development service token, in addition to the funds that you have to send to the project for the IDO, you have to choose your launchpad carefully by studying in detail how it works and the projects it has been able to launch.
Buyers usually have to keep or stake (block) the token in question for a certain period of time to be eligible to participate in IDOs.
Be careful, it is often a substantial investment that can be blocked for a very long time to obtain a very small chance of participating in IDOs.
For example on LaunchZone , BSCEX are blocked for 90 days without the possibility of being able to resell them. In the meantime, the value of the token can drop sharply, the market can turn around or even worse, the platform can be hacked. It is therefore necessary to be well informed before becoming a member of any launchpad.
2. The launchpad proposes a project to its members
When a new project is launched, the launchpad warns its members of the upcoming IDO, but no need to jump on the first project that passes, not everything is good to take .
Sometimes you have to show interest in the project by going through a project-specific KYC ( Know Your Customer ) process. These are usually formalities to complete such as sharing on Twitter, a Telegram group to join, a form where you must fill in the address of your wallet.
This is the opportunity or never to learn about the project, its team, its ambitions, its token ( tokenomics ) and the other big Venture Capitalist (VC) who took part in the project, to ask questions on Telegram and to decide whether or not it is worth participating in the IDO.
3. You win the right (or not) to invest in the next IDO
Each launchpad dictates its own rules , some will offer a lottery, others will offer an allocation depending on the number of tokens you hold, still others simply give access to first-comers within the limit of available places (FCFS : First-Come, First-Served). Often only the biggest holders of the IoT token can access guaranteed spots if the launchpad allows it.
Systems can even combine several methods to try to keep everyone happy. For example, accumulate a guaranteed allowance for the largest holders and make a lottery for the small ones.
4. You send your funds and you are given IoT tokens in exchange
Depending on the launchpad and the project, tokens purchased by IDOs may not be available right away . When the time comes, follow the instructions to collect your tokens.
Finally, it is possible that the project tokens Whitelabel launchpad development will be released gradually during a vesting period to avoid the big pump & dump effects caused by massive sales at the opening of the public market.
Be careful, not all IDOs are created equal
We very regularly see project launches that make x20, x50 or even more than x100 from their launch, it makes you dream, but beware of the fashion effect:
These stellar returns aren’t the most prevalent, just the most hyped and sometimes artificially crafted by bots to create the hype before coming down to a more reasonable price.
A large part of these projects are not very innovative and doomed to disappear, they do not bring much compared to existing solutions. Worse, some simply want to take advantage of fashion to slip away with the money once the funds have been raised ( Rug Pulls ).
No return is guaranteed, it is quite possible that once the token is available on the market, no one wants it and you lose your entire investment.
Launchpad tokens can lose all their value if the projects launched are not up to scratch or if they unfortunately fall on scammers. As the funds are often blocked, it is a very risky investment.
Telegram channels are riddled with scammers, so much so that all IoT platforms harp hundreds of times a day that their ‘admins will never send a private message first ‘, and are forced to mute their Telegram group during IDOs.