IDOs

Definition

An IDO (Initial DEX Offering) is a fundraising method used in the cryptocurrency and blockchain space, where a project launches its token for sale on a decentralised exchange (DEX).

Role for Retail

For retail investors:

• IDOs allow retail investors to participate in early-stage investments on decentralised exchanges. They give retail investors the chance to buy tokens early, often at a discounted price, before they become available on the wider market.

Role for Projects

For crypto projects:

• IDOs are a fundraising mechanism for early-stage projects. They allow projects to raise capital in a decentralised and permissionless manner.

Unlike traditional fundraising methods (like IPOs in the stock market), IDOs are typically conducted on decentralised exchanges, which means there’s no need for intermediaries like centralised exchanges or underwriters.

This makes the investment process faster, cheaper, and more accessible for both projects and investors.

Evolution

History of IDOs (Initial DEX Offerings)

IDOs emerged as a solution to the problems associated with ICOs (Initial Coin Offerings), which gained popularity around 2017. ICOs allowed blockchain startups to raise funds directly from retail investors by selling tokens, but they became notorious for scams, lack of regulation, and poor investor protections.

Many ICO projects failed or disappeared after raising money, leading to the decline of ICOs around 2018.

ICOs' Decline:

• Lack of Transparency: Little oversight led to scams and rug pulls.

• Regulatory Scrutiny: Governments cracked down on ICOs, labelling many as unregistered securities.

• No Liquidity: After token sales, investors often faced delays in trading tokens, hurting market confidence.

To address these issues, the crypto space evolved towards IEOs (Initial Exchange Offerings) and later, IDOs.

While IEOs provided more security by involving centralised exchanges, IDOs offered decentralisation by launching tokens directly on decentralised exchanges (DEXs). This ensured immediate liquidity, faster access for investors, and lower barriers for projects to launch.

IDOs are now widely used, offering a more secure, transparent, and decentralised fundraising method for crypto projects.

---

Key features of an IDO

Equal opportunity

Retail investors

• Unlike private sales, IDOs don't require large capital or exclusive connections.

• Retail investors can participate early at the same token price as others.

Projects

• IDOs allow projects to distribute tokens more widely, reaching a larger, global audience.

• This wider participation strengthens the community and diversifies the investor base, reducing dependence on large institutional investors.

Transparency

Retail investors

• IDO processes are transparent, leveraging smart contracts to ensure automated and verifiable token distribution, eliminating human intervention.

• This guarantees that all participants receive tokens fairly, based on predefined rules, and removes the risk of manipulation, insider deals, or preferential treatment.

• Since the entire process is conducted on-chain, it's fully transparent, allowing anyone to audit the transaction history, which builds trust and ensures accountability.

Projects

• By using smart contracts on decentralised exchanges, projects ensure that the entire fundraising process is transparent and automated.

• This builds trust with investors, as they can verify token allocation, pricing, and distribution on-chain, reducing the chance of favouritism or insider deals.

Immediate Liquidity

Retail investors

• Tokens are tradeable immediately on the DEX post-launch, allowing retail investors to access the market without waiting periods common in private rounds.

Projects

• Tokens issued through an IDO are immediately available for trading on the DEX, providing instant liquidity for the project.

• This helps attract more investors, improves token price discovery, and supports the project's ecosystem by allowing early participants to enter and exit freely, increasing market confidence.

IDOs have gained popularity as they offer faster liquidity, easier access, and fewer barriers compared to token sales like IEOs (Initial Exchange Offerings).

Projects can distribute tokens to a wider audience more fairly and transparently compared to private or presale rounds, where early access is typically limited to large investors or insiders.

In IDOs, tokens are made available to anyone participating on a decentralised exchange (DEX), creating a more open and inclusive environment.

---

---

The AdLunam Solution:

• SocialFi X IDOs

• AdLunam USP

• AdLunam Ecosystem

Why AdLunam Stands Out for Projects:

• AdLunam vs other Launchpads

Why AdLunam Stands Out for Retail Investors:

• AdLunam vs other Launchpads