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Fundraising has always been a gamble for both new and old companies until DeFi platforms opened new and promising opportunities for it. IDO crypto projects show a new way for crowdfunding through launching tokens on DEX platforms. Find out more about how it works, what profits it can potentially bring, and how to start an IDO for your business.
How to fundraise with IDO?
In Initial DEX Offering, a company lists its tokens for trade at a fixed price on a platform. Investors then apply for taking part in the initial sale, in many cases having to complete certain marketing tasks, which is also a great benefit for the company. Later, a certain number of applicants are picked randomly and allowed to buy the tokens. After that, the users’ funds are locked for a designated period, during which they receive additional tokens. The amount depends on their initial investment. A part of the received funds is used to form a liquidity pool, and the rest can be used by a company as they wish.
IDOs are tasty deals for investors, as they allow them to buy a new hot coin for almost nothing and then skim off enormous profits after their funds get unlocked. Getting into IDOs is great luck, so they attract countless adventurers while also channeling attention to the company issuing the coin. The IDO scheme proved to be a win-win for investors and fundraisers and is gaining increasing popularity and trust in the crypto community.
IDO vs. ICO
ICOs became an instant hit in the year 2017 and helped to raise about 4.9 billion dollars by the year's end. ICO's key difference from IDO is that coins are distributed by a CEX instead of a DEX. This, however, creates a lot of further distinctions between the two models. Those differences are:
- Listing process. To list a coin on CEX, a project must conduct negotiations with various platforms and gain permission, while the coin can be listed automatically on DEX.
- Token availability. Unlike with CEX, coins get almost immediately available for trade on DEX.
- Management. With CEX, management is done solely by the project, while this function is shared by the project and launchpad on DEX.
- Marketing. Listing on CEX requires significant marketing expenses if you want to gain enough profits. When placing your project on DEX, the launchpad is also involved in the promotion.
As you can see, DEX provides a faster and easier listing process while also giving much more security to investors.
Launching an IDO with P2PB2B
With the great popularity of IDO, getting whitelisted is the most challenging part. P2PB2B takes care of that and only asks relevant questions about your NFT, play-to-earn, or any other DeFi project. It can launch your IDO within 3 days after application. Besides that, they assist with marketing and PR, announcing your launch to a relevant target audience and helping to get your coins listed on more exchanges as your campaign builds on the momentum and starts bringing profits.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.