This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.
The cryptocurrency industry is evolving, resulting in the development of a novel fundraising method called the initial DEX offering (IDO). The Decentralized Exchange (DEX) model provides cryptocurrency investors with an alternative, more egalitarian crowdfunding model.
This article explains how to use IDOs and technology providers such as BoostX to create cryptocurrencies or DeFi projects.
What is an initial DEX offering? An initial DEX offering (IDO) is a method of raising capital from retail investors. The IDO was created to address the shortcomings of the "traditional" initial coin offering (ICO) cryptocurrency crowdfunding model. Due to the fact that an IDO operates in conjunction with a DEX rather than a centralized exchange, DEXs can be thought of as decentralized liquidity exchanges.
IDOs are the newest fundraising model for cryptocurrency projects. However, they are not without drawbacks. DEXs, for example, are less scalable. It is not uncommon for initial coin offerings (ICOs) and initial exchange offerings (IEOs) to raise more than $1 billion. This is unheard of for DEXs.
How are crypto IDOs implemented? This section discusses some of the more prominent characteristics of DEXs that enable IDOs to function.
IDOs work because DEXs can provide instant liquidity for tokens. This is why DEXs frequently compensate liquidity pool providers handsomely. Liquidity enables DEXs to operate smoothly for their users.
To facilitate trading, the majority of projects contribute liquidity to the DEX by allocating a portion of their funds. This approach has become commonplace. Numerous projects also use a consensus mechanism known as proof-of-stake (PoS). The PoS consensus algorithm was created to safeguard networks. However, in this instance, the mechanism is primarily used to deter investors from selling too soon.
The PoS consensus requires investors to store their funds in the supported token within their wallet. Investors earn rewards in exchange for their "stake" in the network.
Investors can immediately begin trading the project token following the project's launch. Once the IDO is live, early investors can sell their tokens at a premium. Early investors can purchase a large bag of tokens at a discounted rate.
The token value increases once the public sale begins. Once the first sale occurs, the price will begin to rise.
How to initiate an IDO? This section details the process by which users can launch their IDOs. Users must also learn how to create a cryptocurrency in order to launch a successful IDO.
Procedures for establishing an IDO Step 1: Create a business strategy
Create a strategy for the token offering to be released on a DEX. The strategy should include the problem the project is attempting to solve, funding allocation, the blockchain on which the project will run, a general marketing strategy, and how the project will be spearheaded post-IDO and maintained momentum.
Step 2: Create Marketing Material
A website and a white paper are the bare minimum marketing collateral for an IDO launch. A visually appealing, well-branded website can do wonders for investor confidence.
A strong website can assist in activating emotional triggers for investors who have already rationally invested in the project. Additionally, the website can lend a more professional appearance to the project. Numerous projects struggle to establish a brand image, even more so if they do not have a website.
By contrast, an excellent white paper adds specificity and facts to the investor experience. This brings the investor closer to the end of the pipeline.
A white paper's purpose is to educate, not to sell, which is why there is no hard-sell copy in the white paper itself. Rather than that, the white paper presents statistical data, diagrams, and tables. The white paper employs facts to convince the investor that the project is worthwhile.
Step 3: Visit a DEX launchpad
BoostX can provide the technology for a cryptocurrency presale and launch. Presales can be an excellent way to raise funds before launch. BoostX provides a unique dashboard with enhanced features. BoostX also provides expert marketing assistance for presale and beyond.
Step 4: Create the cryptocurrency
Anyone with a bit of technical know-how and some marketing chops can figure out how to launch a cryptocurrency. The process of launching a cryptocurrency has been simplified significantly. Users can use an app like CoinTool to automate the process.
The difficulty does not lie in the generation of tokens. Instead, the challenge is to persuade investors to invest in the project by establishing its real-world value and utility.
After the IDO and Token Generation Event (TGE) are successfully completed, the DEX will list the token for trading. Listing is accomplished through the use of an automated market maker (AMM) such as Sushiswap or PancakeSwap.
Step 5: Launch the Cryptocurrency
Users who are unsure how to launch a crypto token can refer to the following basic breakdown. The team of the project creates a token pool. A token pool is a type of investment vehicle in which investors pay for their tokens in advance.
Investors will receive their tokens following the TGE, which will occur shortly after the IDO. Rather than setting a fixed price, the issuer can conduct an auction, resulting in a price determined by supply and demand.
Additionally, certain projects may offer incentives to investors to provide liquidity. This can assist the project in gaining and maintaining momentum. On the other hand, users can earn additional tokens by providing liquidity.
This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.