What is Initial DEX Offering(IDO)?
Initial DEX Offering(IDO) is developed after Initial Coin Offerring( ICO) and Initial Exchange Offering( IEO) for Projects to raise fund. IDO is similar to IEO, they an investor to buy the tokens before they are officially launched in the market, creating room for major returns. However, IEO is on Crypto Exchange Plaftorms( called Centralized Exchanges) meanwhile IDO is on decentralized exchanges (DEXs).
Projects that want to raise funds through an IDO offer their tokens on DEXs. The first IDO was conducted by RAVEN on the Binance DEX in June 2019. The most popular DEXs are Uniswap and PancakeSwap. The projects use various coins such as Bitcoin, Ether and USDT to create a liquidity pool. Investor must have a wallet supported by the exchange then they can invest in the token.
Why is IDO so Popular?
IDOs, even though they are the latest development, have become increasingly popular crowdfunding models for decentralized finance (DeFi) and decentralized applications (DApps). The best thing about DEXs is that there is no need for Know Your Customer (KYC) requirements or the need for any identification. Moreover, IDOs are decentralized in that there is no strict set of rules and regulations that these projects need to follow. IDOs are also compatible with DeFi protocols and liquidity pools, allowing them to tap into one of the spaces in the blockchain sector that are fast booming and becoming popular.
IDOs have characteristic differences from IEOs and ICOs. The project will not own any of the tokens raised during the fundraising process in an IDO. Although fewer funds are generally raised from the process, the profit from investment in IDO is very huge even up to xxx times.
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