With the rise of the GameFi ecosystem, Web3 gaming platforms have created their own fundraising event, known as an Initial Game Offering (IGO).
Every new project needs funding to get off the ground. Most of the time, these funds are organized through some type of fundraising event. For example, when a private company goes public, it will hold an Initial Public Offering (IPO), in which it will sell its shares to the public to raise money.
Similarly, a new cryptocurrency will rely on an Initial Coin Offering (ICO), in which a limited amount of its native cryptocurrency is sold to the public to raise the funds needed for development. And now, with the rise of the GameFi ecosystem, Web3 gaming platforms have created their own fundraising event, known as an Initial Game Offering (IGO). Join us as we unpack all the important information you need to know about IGOs and how they work.
How does an IGO work?
An IGO allows interested audiences to invest in an upcoming game project during its early days. Its goal is to drive a project from its initial stages through the development phase and all the way to completion.
The advantage of funding game projects through an IGO is that stakeholders do not need to convince venture capitalists to fund the project. Instead, they can get the money directly from the interested layer of the general public.
The main difference between an ICO and an IGO is that in the case of the latter, investors get access to the game assets in addition to the native token. Buyers are encouraged to pump money into IGOs through lucrative deals like mystery boxes, rare in-game collectibles, limited edition skins and accessories, special weapons, etc.
These items are invariably NFTs that can be used to access the game early on; a reward for being one of the first followers of the new project. Furthermore, the tokens obtained in the process are cryptocurrencies that can be sold or traded on an exchange.
If the game performs well, the NFTs and cryptocurrencies received through the IGO will appreciate over time, leaving the investor with substantial profits. On the other hand, the funds received from the IGO will help the development team to take the project to the next stage.
How to participate in an IGO:
An IGO is hosted through a ‘pitch deck’, which is nothing more than a support platform that handles the entire fundraising process. The method is very similar to an IPO, where you have to subscribe, register or sign up for the IGO in advance. If you are shortlisted for the IGO event, you will need to create a crypto wallet and link it to the launch pad.
From there, each launch pad will have a slightly different process, and they should walk you through the final steps. Some popular IGO platforms are Binance NFT, Seedify Fund, GameFi, Trust Pad, Enjinstarter, etc.
Things to remember before investing in an IGO:
· Research the IGO launch pad beforehand. Make sure it’s a well-established and well-functioning platform, with past successes to back up its claims. The launch pad must make available all the crucial information regarding your previous IGOs and the current project, such as the time taken to get full funding and the total funds raised for different projects in the past.
· The project leadership and development team must have valid credentials to lead the project to completion. If they have executed such projects in the past, it is not only a feather in their cap, but also a guarantee for potential investors.
· In many cases, a community of crypto enthusiasts also support the project and discuss its potential post-completion. See if a fraternity of like-minded people share the same views on the project as yours.
· In addition, if the first investors in the projects have previously financed other successful projects, it instills more confidence in the masses.
· Lastly, it would be helpful if you also refer to the GameFi project white paper. Make sure you have a well-explained working model and a detailed section on the tokenomics of the project. Also, look for a smart contract audit to make sure the platform has been vetted and doesn’t have hidden backdoors for developers to drain investor funds and disappear.
IGOs are a great way for project developers to raise funds for their gaming platforms. If the project takes off, they also create wealth for investors. Therefore, IGOs are a win-win. Just be sure to research the project and launch pad before putting your hard-earned money on the line.