The cryptocurrency industry is growing, resulting in the development of a novel funding method called as the initial DEX offering (IDO). The Decentralized exchange (DEX) model provides bitcoin buyers with an alternate, more egalitarian financing model.
This article describes how to use IDOs and technology providers like BoostX to establish cryptocurrency or DeFi initiatives.
What’s a preliminary DEX providing?
An initial DEX offering (IDO) is a method of raising funds from individual investors. The IDO was intended to address the deficiencies of the “traditional” initial coin offering (ICO) cryptocurrency crowdfunding model. Due to the fact that an IDO runs alongside a DEX rather than a centralized exchange, DEXs may be considered decentralized liquidity exchanges.
IDOs are the most recent method of funding for bitcoin projects. However, they do not appear to be devoid of disadvantages. DEXs, for example, are far less scalable. It is not uncommon for initial coin offerings (ICOs) and initial exchange offerings (IEOs) to raise more than $1 billion. That is unusual for DEXs.
How are crypto IDOs implemented?
This section describes some of the unique characteristics of DEXs that enable IDOs to function.
IDOs function because DEXs may provide immediate liquidity for tokens. Therefore, DEXs continually compensate liquidity pool suppliers generously. Liquidity enables DEXs to work efficiently for their consumers.
By dedicating a portion of their capital, practically all initiatives give liquidity to the DEX to enable buying and selling. This practice has become ubiquitous. Numerous initiatives also employ a consensus technique known as proof-of-stake (PoS). The PoS consensus algorithm was developed for network security. However, in this instance, the system serves primarily to prevent purchasers from selling too rapidly.
The PoS consensus mandates that purchasers store their monies in the supported coin within their pockets. Traders receive benefits in exchange for their “stake” in the community.
Traders can immediately begin purchasing and selling venture tokens following the launch of the initiative. Once the IDO goes live, early purchasers will be able to sell their tokens at a premium. Early purchasers should acquire a large bag of tokens at a discount.
As soon as the wide public sale begins, the token value will grow. As soon as the initial sale occurs, the price will begin to rise.
How to instigate an IDO attack
This section describes the process through which users can launch their IDOs. Customers must also learn how to establish a cryptocurrency in order to successfully launch an IDO.
The steps required to establish an IDO
Step 1: Create an enterprise technique
Create a method for launching the token offering on a DEX. The strategy should include the issue the project is attempting to solve, money allocation, the blockchain on which the project will run, a general advertising strategy, and how the project will be led post-IDO and maintained momentum.
Step 2: Develop Marketing Materials
A website and white paper are the bare minimum promotional materials for an IDO launch. A visually engaging website with a strong brand may do wonders for investor trust.
A powerful website can assist in creating emotional triggers among customers who have already invested logically in the venture. Moreover, the website can give the project a more professional appearance. Even more so if they do not have a website, quite a few ventures struggle to establish a brand image.
In contrast, a superior white paper gives investors with specificity and information. This takes the investor closer to the pipeline’s endpoint.
The purpose of a white paper is to educate, not to sell, which is why there is no hard-sell copy within the white paper itself. In addition, the white paper provides statistical data, illustrations, and tables. The white paper uses data to convince the investor that the endeavor is worthwhile.
Step 3: Go to a launchpad
BoostX can provide the skills necessary for a successful presale and launch of a cryptocurrency. Presales can be an effective way to raise funds before to a product’s release. BoostX provides a unified dashboard with expanded features.
BoostX also offers expert marketing support for pre-sale and beyond.
BoostX can assist with presales and launches on the majority of blockchains, including Binance Good Chain, Ethereum, Polygon, and Avalanche.
Step 4: Create the cryptocurrency
Anyone with a modicum of technical knowledge and a few marketing skills may determine how to create a cryptocurrency. The process of creating a cryptocurrency has been greatly simplified. Customers can automate the process with an application such as CoinTool.
The issue is not related to the technology of tokens. Rather, the challenge is to convince investors to invest by demonstrating the venture’s practical value and utility.
After the IDO and Token Generation Event (TGE) are successfully completed, the DEX will list the token for trading. Utilizing an automatic market maker (AMM) such as Sushiswap or PancakeSwap, listing is performed.
Step 5: Distribute the Cryptocurrency
Customers who are uncertain about how to develop a crypto token can review the following breakdown. The venture’s organization develops a token pool. A token pool is a type of funding mechanism in which purchasers pay in advance for their tokens.
Traders will receive their tokens after the TGE, which may occur shortly after the IDO. Instead of setting a fixed price, the issuer may perform a public sale, resulting in a price determined by supply and demand.
Additionally, certain programs may provide buyers with incentives to provide liquidity. This could assist the endeavor in obtaining and maintaining momentum. Moreover, customers can earn additional tokens by providing liquidity.