What is Initial DEX offering (IDO)? Here are top IDO launchpads of 2022


Initial DEX Offering (IDO) is one of the innovative approaches followed by the cryptocurrency industry to raise funds. This is an alternative fundraising approach created by the industry after the initial coin offering (ICO) generated a lot of ill will in 2017. ICO is an unregulated approach to raising funds from retail investors. Although IOCs made many early investors overnight millionaires with their impressive profits, many retail investors also lost money as several ICO projects turned out to be outright scams/flash grabs.

New investors were discouraged from investing in the crypto space due to the negative impression created by ICO projects. Decentralized finance (DeFi) tried to address this problem by creating alternative fundraising models and the DEX (decentralized exchange) model is one such approach.

What is an IDO?

An IDO is the latest fundraising approach taken by crypto projects to raise funds from investors. It is a token offering on a DEX. Liquidity pools (LPs) play a critical role in IDOs as they create post-sale liquidity. IDOs allow users to lock funds in the DEX to generate new tokens. Some of the funds raised through IDO are added with the new token to a liquidity pool before being returned to the project.

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These liquidity pools are one of the key reasons behind the success of IDOs. Liquidity allows DEXs to run smoothly. This is why DEXs reward liquidity providers.

Early investors in a crypto project can sell their project tokens at a higher price once that project’s IDO goes live. Early investors have the advantage of buying a large number of tokens at a discounted price and can sell these tokens later at a higher price after the first sale takes place.

Another positive aspect of an IDO is that investors do not have to wait long for the token to be listed. Here, listing occurs immediately after completing the IDO. Therefore, investors can liquidate their investment faster compared to ICOs.

IDOs are a cost-effective and easy way for projects to distribute their tokens. However, IDOs also have certain limitations. DEXs are not scalable. While the projects have raised over a billion dollars through ICOs, they may not be able to raise such high amounts through IDO. This is mainly due to a lack of knowledge about DeFi platforms, which prevents new crypto traders from investing in IDO. Also, DEXs are vulnerable to hacking. In the past, there have been news stories about hackers siphoning off investor funds from DEXs.

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Best IDO Launchpads of 2022

Here are three best IDO launchpads of 2022

Binance Launchpad

Binance, which is one of the most prominent crypto exchanges globally, has its own IDO launchpad known as Binance Launchpad. On this platform, the participants who will be able to invest in the next IDO are selected through a lottery system. This is based on the Binance Smart Chain (BSC) and users can stake their Binance Coins to get a lottery ticket to participate in the IDO. According to information available on the Binance Launchpad website, it has so far launched 64 projects and helped them raise $130 million. More than 3.5 million unique users have participated in these IDOs.

OKEx Launch Pad

OKEx is a prominent crypto launchpad project, which has helped launch successful IOCs like Perlin, Beam, and Harmony. OKEx has its own token launch pad called OKEx Launchpad. It allows crypto projects to raise funds and connect with a global community of crypto enthusiasts. OKEx Launchpad lists projects for a limited time. In this time frame, OKEx users can stake OKB (OKEx native currency) and receive the tokens issued by these crypto projects. The more OKB coin users bet, the more tokens they can receive.

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KuCoin Featured

KuCoin is one of the leading cryptocurrency exchanges in China with a global customer base of over 10 million. KuCoin Spotlight is its own token launch platform. The unique thing about Kucoin Spotlight is that it allows users to earn rewards for trading certain digital assets. KuCoin Spotlight has so far launched 20 projects with the highest ROI on these projects exceeding 924x, based on data available on the exchange.

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