Initial DEX Offering (IDO): A New Way to Fund Your Project

3 min readOct 25, 2021

Although the crypto industry is growing and expanding, Investors are becoming increasingly interested in the crypto sector because of potential growth and reduced risk. Tokens may be offered in a variety of ways to attract additional investors. Initial DEX Offerings, which take place on decentralized exchanges, are the most recent iteration of token launching methods. Consequently, we’ll discuss both the IDO process and the emergence of the Initial DEX offering in this post.

Understanding the Term Initial DEX Offering (IDO) and How Does It Work?

Initial DEX offering, also known as IDO, is a form of raising funds. The IDO currency is released via a decentralized exchange that depends on liquidity pools for traders to swap tokens. In comparison, the liquidity pool consists of a variety of crypto-to-stable currency pairings. An excellent example of a liquidity pair is USDT/ETH. According to the current market circumstances, traders may switch between crypto-assets and stable cryptocurrencies. Stablecoins, with their little volatility, provide traders with a secure means of managing their cryptocurrency tokens & assets by exchanging them.

Members of the community may use IDO to distribute tokens representing any asset on a decentralized exchange, and anybody in the neighborhood can choose this. With a more cost-effective token sale mechanism, IDO appeals to exchange users. Liquidity pools on DEX, for example, allow IDO to offer immediate liquidity with minimum slippage. Polkastarter, Uniswap, and Binance DEX are just a few examples of DEXs that provide IDO services.

Fundraising Cryptocurrency Using IDO: Is It More Effective?

Security token offers, initial coin offerings, and initial exchange offerings have evolved into IDOs, the next generation of crypto fundraising methods (IEOs). Because of their features, IDOs are an excellent option for major ventures and businesses looking to create a token and get access to quick funding.

It is widely accepted that IDOs are a better approach to start a new crypto project than pre-mines, which are a mechanism of issuance that benefits project founders.

When the Mastercoin ICO launched in July 2013, it was the first-ever ICO. Ethereum raised $2.3 million during its first 12 hrs in 2014 via a token sale that generated 3,700 BTC.

Benefits of Having an IDO

1. Since IDOs are decentralized, projects don’t have to pay any fees and don’t need permission from anybody to use them.

2. Rather than relying on an exchange to authorize a project, outspoken community members evaluate projects and tokens, opening the way for small initiatives and large partnerships alike.

3. Exposure to liquidity and trade is expedited using IDOs. As an additional benefit to customers, IDOs provide an all-in-one wallet & trading platform for them. IDOs may also support a variety of wallets, making things easier for the end-user.

The IDO’s Prospective

The IDO technique was created to address the flaws of its predecessors, the ICO and IEO. As long as you follow the DEX model, you don’t need the authorization to arrange a fundraising event.

Only DeFi-related initiatives have received money so far via IDO’s crowdfunding platform. There’s no reason other industries in the crypto ecosystem couldn’t do the same. The fact is that for the tokens of these projects to be successful, they must be able to entice current DeFi users to invest in them.

For startups, IDO is a better way to get money. While there is always room for development, IDO still has a shot at making it in the market. In addition, the model’s effectiveness is being confirmed in an increasing number of instances.

Initial DEX offerings may become more popular if IDO platforms include governance structures and fix prices within the liquidity pool. As a result, if we keep working on the Initial DEX Offering, we’ll see even better IDO solutions in the future.