Simplicity and affordability
Almost any startup and established business can raise additional funding with IDO. Dismissing strict verification procedures, as under STO and IEO, provided wide access to IDO, which, in theory, should make the market more competitive and at the same time open to innovation.
Fast listing on exchanges
Unlike ICO/STO, IDO does not have to wait long for tokens to be listed on exchanges. Listing occurs as soon as the IDO ends. At the same time, it does not impose an obligation on the issuer to sell its tokens on only one exchange, as in the case of IEO.
Accessibility for ordinary investors
After regulators came to the crypto crowdfunding market, they also demanded that only qualified investors (that is, accredited investors and investment funds) take part in investing. IDO does not have such restrictions, which makes them available to everyone.
Most exchanges require thousands (sometimes tens of thousands) of dollars to add a new token to their listing. And in addition to this, trading platforms are often picky about new projects, rejecting them for a variety of reasons. When launching a project through IDO, this will not happen. The token will be listed almost immediately after the sale ends. Smart contracts are responsible for this, not people.
You can always check the IDO smart contracts yourself and adjust your plans.
At this stage, we check the scope of work, we clarify the questions that we may have according to the logic of the application, and prepare the roadmap of the deliverables.
Help with technical documentation
The technical side of contract work; docs with program blocks communication; the logic of the rewards/payments.
Smart contracts development
Smart contracts for the token pools; smart contracts for the configuration of the platform, the timing of the events (open pools, emit rewards); whitelist contracts.
Service that handles the requests from the frontend side and proxy them to the chain in a secure way via signature; tiers for the users are implemented in the backend; DB with the information about the pools, links, and other project info.
The frontend that works with chain, using different libraries.
Connecting the frontend of the platform to the chain. The frontend is able to create transactions, get the data from the chain, and store the data in the contacts. Connecting the frontend with the backend, so the frontend can get/post the data in the DB. The frontend is signing the transactions via backend keys.
After a first demo of the platform, the team receives feedback and edits and implements them.
Delivery of the platform via demo with full user flow and admin flow.
The support for new blockchains
An additional feature is the support for new blockchains. The standard blockchain is Ethereum, additional blockchains are Binance Smart Chain, Polygon, Solana, Polkadot.
Customized features – upon request. For example, a custom design. Changing logo colors is included in the price. The creation of the admin panel is also included in the $30 thousand. The admin panel allows you to create new pools, enable or disable campaigns for different projects and carry out account management.
The IDO model assumes that any DEX user can run their own IDO. You just need to activate the corresponding contract, register a new token and provide the pool with liquidity. In fact, this is the same ICO, only a blockchain startup does not need to create an infrastructure to sell its tokens and take care of adding them to the listings of crypto-exchanges – DEX does all this.
This step includes analyzing and describing the blockchain startup in a user-friendly format. This usually means launching a website and writing White Paper and Yellow Paper (technical description). Less commonly, startups provide prototypes, MVPs, alphas, or product demos.
Then the project is sent to the DEX, where it must be checked and selected by exchange users, a special group of people or an external auditor. If the project is approved, it goes to IDO launch platforms on which startups can raise capital. Checking is needed to protect yourself from junk IDO spam and outright scam.
Initially, liquidity is replenished with financial resources from early stage sponsors and venture capitalists. They are offered to buy new tokens at a slightly reduced rate so that they risk early on with the hope of a big win later. To participate in a presale, you usually need to register with a whitelist and subscribe to the startup's social media. Sometimes the whitelist is made through a lottery.
It is conducted on decentralized crypto-exchanges. At the same time, unlike ICOs, where the attracted capital was almost always ETH, in IDO capital is attracted through a combination of ETH and stablecoins (USDC, USDT and DAI).
After the successful completion of the IDO and the TGE, the token is listed for trading on crypto-exchanges based on an automated market maker (AMM).
As in the case of ICOs, STOs and IEOs, in IDO the main factors for the success of a token sale are the quality of the project and marketing, just in the new model the probability of success is much higher. Moreover, marketing is often more important than the prospects, readiness and usefulness of a startup, since advertising can create the appearance of all this. But these are exceptions. If you have a ready-made product (MVP, demo version) and it really solves some user problems, then its IDO will be successful.
The main reasons why cryptocurrency investors prefer to invest in IDOs over IEOs are accessibility and security. Accessibility, since anyone can buy tokens during the IDO with any amount on hand and no additional checks are required. In addition, in the Initial Dex Offering there are also no restrictions related to the investor's jurisdiction, while in the Initial Exchange Offering they can be present.
With regard to security, in the case of IDO, the investor should not transfer his funds to the internal accounts of the exchange. All transactions are carried out through smart contracts that provide p2p transfers. DEX acts here only as a provider of these smart contracts. The platform does not store user money, private keys, or other important confidential data.