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This is the latest and interesting variation of a none-centralized and permissionless, public financing platform that has created another means of raising funds in the cryptocurrency world.
When a project starts an initial DEX offering (IDO), this implies that the project is about to launch token through a non-centralized liquidity crypto exchange. This variant of cryptocurrency property relies on a liquidity pond in which traders can exchange one token for another e.g USDT exchanged for ETH.
Does An IDO Have a Better Fund Sourcing Plan for Cryptocurrency?
Initial DEX Offering will take the place of other cryptocurrency fund sourcing plans. This consist of ICOs, STOs and IEOs. IDO will provide instant liquidity, even at all price marks because of its mode of operation. An IDO is a great choice for all the latest project that seeks to launch crypto and would like to access instant funds.
Also, IDOs are mostly thought of as a generally nice means to start new crypto and eradicate pre-mines. A pre-mine is a mechanism of issuance system that favors project owners’ more than the ordinary member in the community.
Examples of some successful projects that was launched through IDOs are given below.
Raven Protocol IDO
This is a protocol used for deep learning, however, it is non-centralized. Raven protocol constantly trying to provide cost-effective and quick solutions which run on the blockchain to revolutionize Artificial Intelligence, and machine learning. These aspects are however ruled by large corporations. Through the help of RAVEN tokens, people who contribute to this project are rewarded for making their computer resources available.
Universal Market Access Protocol IDO
This project allows programmers to develop synthetic properties on the Ethereum metwork, these are collateral-supported tokens and their worth usualy fluctuates. In April this year, this project launched its token, and it was sold through a non-centralized exchange called Uniswap. A token costs $0.26. Because of the mode of operation of the UMA investors were eager to purchase it. Consequently, this caused the price of the token to rise very quickly to about $2 just a few minutes after it was launched. The value of this token later balanced at $1. Eventually, some buyers said they bought the token at a higher cost than those who bought the token before the token was launched.
Nevertheless, this reveals the issues with Uniswap, not the UMA. Besides this setback, at the very beginning, UMA now possesses a market cap of more than 1.5 billion dollars, as its token is now worth over $25.
SushiSwap IDO
This is a non-centralized cryptocurrency exchange that is based on the Ethereum network. This project is trying to replace Uniswap as the number one Ethereum-based non-centralized exchange. Sometimes in September last year, SushiSwap users were said to have moved above $1.14 billion of locked cryptocurrency property onto the SushiSwap platform.
One fascinating thing that happened was that instead of giving out an Initial Coin Offering, liquidity pool providers on Uniswap were rewarded by staking their tokens on SushiSwap. Also, because of this, users were given SUSHI token as their reward.
The Need for IDOs
IDOs are needed because they help solve the problem of Initial Coin Offering. And, it also increases the Possibilities of the crypto market. It also helps entrepreneurs to produce blockchain products that are inaccessible to evil third-party influences, as it assists in dealing with errors caused by humans and hackers. Also, people who buy tokens and holders of crypto assets are immediately secured on their wallets and personal keys.
The Goods of IDO
Some of the advantages of an IDO are as follows
IDO has made it possible for crypto projects to be launched without having to pay high exchange fees, and having to wait for permission to get authorization by the exchange that was paid to, before it can be listed.
Also, instead of projects having to wait for authorization from exchanges, audible community members get to supervise cryptocurrency projects and tokens. Consequently, this has given access to small projects and huge collaborations.
In addition, when comparing IDOs to IEOs and ICOs – which requires projects to wait for some time, IDOs provide quick access to liquidity, as well as buying and selling. Because IDOs can support different types of wallets this provides users with a nice experience.
The Future of IDOs
The latest means through which cryptocurrency projects can source funding is IDOs, however, there is still room for improvement. As concerning sourcing for funds, it is key to possess some degree of control to eliminate token price changes or Know Your Customer laws. However, these are taken care of on ICOs, IEOs, and STOs.
Furthermore, scalability is another thing that should be improved upon. This is because using a Defi platform for a regular cryptocurrency trader can be challenging. Therefore, a trader who is new to these platforms will have to be educated on how to efficiently use this platform.
The main objective of cryptocurrency is to make finance more accessible by making it non-centralized. The initial DEX offering has advanced a bit in making this possible. However, we can’t tell if the project will be a total success or an impending disaster.
Also, a big factor is that centralized exchanges are more recognized, and have a lot of control in this space. Therefore Investors are more eager to know when a centralized exchange such as Binance will be listing a new crypto, than wanting to know when IDOs will do the same. Nevertheless, we can hope that this will change very soon because of the increasing awareness of DEXs (decentralized exchanges) and Defi generally.
The future of Initial Desk Offering may be great, however, there is a need for more publicity to be done. Also, there is only a handful of Defi users in the cryptocurrency space, but the figure is increasing rapidly.
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