IDOs are touted as the latest crowdfunding renaissance. They are sold in many flavors, ranging from IGOs to IMOs, marking the initial DEX offering of a crypto token.
Is it a fad? Or, is there more to them?
Here are the top reasons why IDOs are all the rage:
Early access to projects
If you are a crypto investor, you are in for the surprises. You eventually grow accustomed to that feeling where your heart sinks every time a token skyrockets to a million-dollar market cap.
Sadly, early-stage investments in most projects are reserved for private investors and VCs who have a lot of money to spare. They buy tokens in bulk for discounted prices. Retail investors, on the other hand, can’t afford to be a part of this. There are many factors to consider before you take your plunge. The earlier the phase of development, the higher the risk. At the end of the day, it’s just not worth a huge chunk of your savings.
IDOs relieve you of the heartbreak. They open up early-stage investment for all. Most crypto projects set aside a portion of their tokens for the public and the community ahead of the DEX listing. Although the amount may be significantly low, it goes a long way in nurturing awareness, engagement, and loyalty. The token allocations are also usually low enough for retail investors. In fact, you can get into an IDO for as low as $100.
As far as a project is concerned, IDOs are more than just a means of crowdfunding. They need all the exposure they can get before the token lists on exchanges. IDOs have proven to be a great tool for marketing. Most projects launch with a low initial market cap to gain traction and build the community.
If you have done your research before jumping in, this translates to great returns in the long run.
IDOs are soon followed by the TGE (Token Generation Event), often within a few hours. Projects open liquidity pools on DEXs to allow the exchange of the token for other popular currencies.
Although most projects follow a vesting schedule that limits the number of tokens you can withdraw, you always have the option to liquidate the tokens at hand. Unlike early-stage private investors, IDO participants don’t have to wait months for a listing. While vesting prevents the token price from plummeting, liquidity makes room for price fluctuations. People who couldn’t get into the IDO can buy the tokens at this stage, thereby raising the price.
IDOs are often divided into public and community rounds. As the name implies, public IDOs are open to all. But whitelisting for community rounds is based on the participant’s engagement in the community. Projects list a set of tasks that you have to complete before applying.
Communities, being the backbone of a project, help you learn about the project better. It gives you an insight into how active the project is, how the community is kept alive through various incentivization and engagement initiatives, and how the team interacts with the community.
Are they foolproof?
IDOs are not without their faults. Many launchpads fail to deliver the democratic vision put forth by IDOs.
UpLift DAO intends to make a lasting change in the crypto crowdfunding arena with some novel features. Let’s take a look at what they are and how they stand out.
UpLift DAO: Crypto fundraising reimagined
UpLift DAO is an incubator, launchpad, and accelerator dedicated to promising projects in the crypto industry. UpLift DAO has recorded significant growth since its launch in November 2021, amassing 2,000+ unique token holders and 7,000+ unique stakers for its strategically designed IDO model.
Listed below are the key features of the launchpad.
1. Fair and decentralized token allocation
Access to IDOs on most launchpads is tier-based. Each tier will have a minimum token staking requirement. IDO tokens are allocated to participants based on the tokens they have staked. The higher the amount staked, the higher the allocation.
Tier-based allocations factor in money, which goes against the core idea of IDOs. UpLift DAO tackles this problem through a fair lottery-based token allocation. Here, participants are selected at random through a lottery. The community-based capital deployment model facilitates a diverse set of participants. To ensure further representation, there is a stand-off period after each IDO. It facilitates a level playing field, allowing anyone to claim tokens at a discounted price.
2. Research-backed project selection
UpLift DAO follows multiple rounds of screening that filters out incompetent, malicious, and pump-and-dump projects, in turn mitigating the chances of rug pulls and scams. Only promising projects with a coherent roadmap, transparent token economics, and a predefined vesting schedule make it to the launchpad.
UpLift has launched three projects so far across various sectors — including DeFi, GameFi, and NFT — raising 7,50,000 BUSD cumulatively.
3. Multi-chain compatibility
Although UpLift IDOs are launched on BSC, the listed tokens can be distributed on any EVM-compatible network, fueling the interoperable growth of the blockchain ecosystem. It extends support to a wide range of emerging blockchains including Polygon, Aurora, and NEAR.
4. Wide network
The UpLift community is led by KOLs and industry practitioners who frequently make appearances during community calls, further eliminating the chance of fraud.
5. DAO governance
Keeping in line with the spirit of decentralization, UpLift has a governance system overseen by the community. Here, each member can exercise voting rights regarding a range of decisions, including project selections and the IDO process.
6. Long-term gains
UpLift is backed by a strong community held together by its passion for crypto. Since the decision to launch a project is the community’s, it collectively commits to holding the tokens and seeing them rise in value. In addition to that, users can sign up for passive streams of income through yield farming, referral, ambassador, and bounty programs.
IDOs are here to stay
When done right, IDOs decentralize the crypto fundraising arena, bringing retail investors on board. They give you early access to projects at discounted prices. If you are looking for the best IDO projects, UpLift DAO is a great place to start.