What is an IDO in Crypto: IDO vs. IEO vs. ICO

An Initial DEX Offering, or IDO for short, is a new crowdfunding technique that allows cryptocurrency projects to introduce their native token or currency through decentralized exchanges (DEXs). IDO, the infamous Initial Coin Offering (ICOsuccessor), is a foolproof method for projects to get off the ground or raise money for growth and development.

What is an IDO (Initial DEX Offering)?

The DEX Initial Offering, or IDO, is a crypto currency (or token) offering that takes place on a decentralized exchange (DEX). Unlike an ICO, where tokens are sold prior to listing, tokens in an IDO are immediately listed on the DEX through which they are released. This means that project developers are no longer required to collect assets for groups; instead, the pool is formed on a DEX after the IDO is completed through its own launch pad or a third party.

The IDO model has gained popularity as crypto projects can raise money without using middlemen, and investors can benefit from instant token trading, resulting in a win-win scenario.

A look back at the origins of the IDO

The IDO model is the successor to the IPO, ICO and IEO models. Let’s take a closer look at each of these models:

What is an initial public offering?

For a long time, companies failed to raise funds to meet their lofty goals. Angel investors, venture capitalists, and finally an initial public offering (IPO), in which a portion of the company’s total stock is sold to the public, were some of the most common methods for a company to raise funds. money.

What is an ICO?

When the cryptocurrency industry went mainstream in 2017, projects mimicked this strategy by selling a portion of their total cryptocurrency supply to the public in ICOs. ICOs quickly became a hit in the crypto space, with investors flocking to the opportunity, trying to raise an estimated $4.9 billion by the end of 2017. However, the rise in scam projects and Ponzi schemes has resulted in a precipitous drop in ICO popularity. But with companies like LCX that they offer full legal protection for ICO under their umbrella, makes it popular, valuable and worthwhile. From the token sale management tool, to high-grade compliance, to the post-token sale listing, it’s all done in one place, and that’s LCX.

What is an IEO?

An IEO (Initial Exchange Offering) it was similar to an ICO in that it was launched on a centralized exchange and promised that the token would be listed on an exchange and investors would not be cheated. Also, in IEOs, crypto projects were carefully scrutinized and the hurdle for projects participating in an IEO was relatively high. As a result, there is a sense of trust between investors and the crypto community in general. IEOs gave rise to some of the most popular blockchain projects today, such as Polygon and Elrond.

The Origin of the Initial DEX Offering (IDO)

However, when DEXes entered the scene in 2019, numerous crypto projects were attracted by the decentralized nature of these exchanges. Consequently, they are a better option for launching tokens and raising funds without the hassle of centralized exchanges.

As a result, the concept of IDO was born, with the Raven protocol being the first project to release an IDO. Then there were the IDO launchpads, which provided services specially tailored to new projects that IDO made. This increased the popularity of IDOs as a method of fundraising in the crypto space.

IDO vs. ICO vs. IEO: A Complete Comparison

Definition A portion of the total token supply is sold to the public on its own. A portion of the total token supply is sold to the general public through a centralized exchange (CEX). A portion of the total token supply is made publicly available through a decentralized exchange launch platform.
Who does the fundraising? The project that is launching the ICO The centralized exchange A decentralized exchange or launch pad for IDO
Token listing after the sell-off The project seeks listing of tokens on various exchanges. The CEX automatically enumerates the token. The CEX automatically enumerates the token.
Selection process The projects have not been vetted and anyone can launch an ICO. Before a project is included in the list, it goes through a rigorous vetting process. Projects are vetted and must meet launch pad standards.
Token Availability The tokens are not immediately available, so investors must wait for them to be listed on an exchange. The tokens will not be available for trading immediately. Tokens are available immediately or have a vesting period.
Smart contract management Managed by the project that is issuing the ICO. The crypto exchange is in charge of this. Launchpad and the project that emits the IDO manage it collectively.
Marketing The project that is launching the ICO must spend a substantial amount of money promoting it. The cryptocurrency exchange promotes and markets the IEO. Both the launch pad and the project market themselves.

Given the growth of DeFi and DEX in recent years, it is safe to say that IDOs have a bright future, and DeFi projects are better placed to benefit from IDOs than ICOs or IEOs.