Are you a crypto founder who’s been hearing all the buzz about IDOs (Initial DEX Offerings) but isn’t sure where to begin? This guide is here to help.
‘Initial DEX Offerings’ are a new type of crowdfunding that is more equitable and secure than ICOs and IEOs. An initial DEX offering is effectively the successor of Initial Coin Offerings (ICOs) and Initial Exchange Offerings (IEOs) (IEOs). They share the goal of raising funds for their respective initiatives. The distinction with an IDO is that the coins are listed on a decentralized exchange right away.
This comprehensive post will take you through every step of launching an IDO, from pre-launch planning and fundraising to post-launch promotion and community building. Using this guide, you’ll get the support you need to ensure your IDO launch runs smoothly.
What is an IDO?
IDOs make it inexpensive and straightforward for projects to distribute tokens and collect funds. If a project is launching an IDO, then it will make its currency or token available via a ‘Decentralized liquidity exchange’.
A DEX is a decentralized exchange that does not need users to deposit funds to begin trading and does not keep the cash for the user. Users instead trade straight from their own wallets.
How do IDOs work?
Crypto launchpads, also known as IDO platforms, are platforms for launching new currencies and crypto projects, as well as generating liquidity. Crypto launchpads are a great way to launch an Initial DEX Offering (IDO). This is how they work:
After the launchpad platform verifies that the project meets the requirements, they get the green light to start fundraising.
Investors have the option to purchase “IOUs” of a token from a pool. They pay for their tokens ahead of time but receive them shortly after the Token Generation Event (TGE).
Once the IDO is finished and TGE is done, traders will be able to make trades with the new token listed on decentralized exchanges.
Benefits Of Launching Initial DEX Offering
Initial Coin Offerings (ICOs) were all the rage in 2018, with high-profile coin sales until the bubble burst. Scams and rug grabs were common, and investors frequently incurred large losses. Because these ICOs were organized by the projects themselves, there was no verification procedure. The following iteration was the Initial Exchange Offering, in which exchanges vetted companies and only selected a few of the best tokens to debut on their exchanges. The screening procedure hampers many initiatives. As a result, the IDO has developed as the final stage of this journey, in which launchpads review projects before being launched into decentralized exchanges. This has several advantages:
- Tokens are instantly listed on an exchange upon their launch.
- Marketing costs are not necessary because the launchpads will share the responsibility of promoting awareness for fundraising.
- Vesting periods effectively lock up the coins of the initial investors for a scheduled period. This provides safety to new investors as those participating in the IDO can’t sell coins as soon as the project is listed. Hence investors are safe from pump and dump.
- Transparency – because everything happens on the blockchain, everyone can verify it.
- More projects have access to financing since the exchanges’ stringent vetting procedure is no longer in place.
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Steps for Successfully Launching an IDO
The secret of a successful IDO is explained in the following steps:
Step 1: A clear business strategy
When creating a strategy for a token offering on a DEX, it is important to consider all the elements that go into the project. This strategy should include
- the problem that the project aims to solve
- funding allocation
- the blockchain that the project will utilize.
Step 2: Curate a marketing strategy
It is essential to have a general marketing strategy and plans for leading and maintaining the project’s momentum and community adoption.
To gain investor attention and confidence, a user-friendly website should be created and equipped with relevant information. It is important that such sites are visually appealing so they can impart a lasting impression on potential investors. The lack of a website makes it difficult for project owners to properly establish a brand image or to explain the nuances of their project.
Consequently, having a well-crafted and comprehensive whitepaper is essential when marketing an IDO. This document should cover in detail the problem you seek to address, your proposed solution, the blockchain you will use, the project’s native token, its utility, tokenomics and the team behind the project.
By partnering marketing efforts with these necessary collaterals, it becomes far easier for projects to both market themselves and gets their message across effectively.
Step 3: Create the token and establish the tokenomics
Launching a cryptocurrency is simpler than ever. Numerous applications, such as CoinTool, can simplify token generation.
The real challenge, however, lies within marketing the token and setting up tokenomics to ensure accurate asset valuation. As such,
- Deciding on the total token supply
- How many of them will be released for the IDO
- Floor prices of the tokens in the IDO
- Which launchpads to choose from
Step 4: Identifying the Launchpad
The IDO landscape is vast and varied, with options to suit various projects. Finding the IDO launchpad that best resonates with your buyer persona can be daunting.
In this instance, AdLunam is often a great choice for those looking to raise capital early in their project development phases. The seedpad is the first NFT-integrated Engage-to-Earn Proof-of-Attention launchpad specifically created to provide seed funding. AdLunam offers tokens based on how actively users engage with the underlying project – making it ideal for raising capital during the initial phases of the project.
Step 5: Start raising funds.
The project team generates a token pool. The token pool allows investors to pay for their tokens in advance, giving token issuers the opportunity to hold an auction and enabling them to set a price based on market demand.
Furthermore, project teams can provide incentives for users who provide liquidity, which could help boost momentum and provide additional token rewards. This token pool system helps create powerful networks that can continually develop a fair token price and loyal supporters.
The bottom line
If you follow the steps, you will be well on your way to a successful IDO launch. Remember always to comply with regulations, do your due diligence on the token project and exchange, and have a solid marketing strategy. With careful planning and execution, an IDO can be a great way to bring awareness to your project and jumpstart its success.
Author: Amelia Gomez
