IDO is a form that is not too strange in the community but still brings new things. Let’s learn about the recent changes in this form so that investors can get profits for themselves.
What is IDO?
IDO is an acronym for Initial DEX Offering – Initial coin offering on DEX. DEX here stands for Decentralized Exchange – Decentralized Exchange.
In essence, the forms of ICO, IEO, or IDO are the same, to release the project’s token to the public for the first time. However, as stated above, IDO also issues coins on the exchange, but the floor here is the DEX exchange.
How is IDO now?
Cheap money – lots of money
After a big winning season, everyone’s family has money. The market has a lot of “idle money” waiting to be invested. People with a lot of money are not only significant funds but also individual investors. In short, from “whales” to “baby fish” are making money.
Therefore, the project is easy to call for crowdfunding. Funds now invest a lot. The selection criteria are reduced, no longer “strict” as in the past. As a result, the quality of projects dropped sharply, and many “junk” projects were still invested with a lot of money.
Too many Launchpads
Last year, only significant exchanges like Binance or FTX opened to sell tokens. However, by 2021, along with the DeFi trend, the number of Launchpad platforms is increasing. Launchpads must have many launches to compete and attract money, users, and projects.
As a result, Launchpad’s project selection criteria are also reduced. A series of untested projects without too much potential is still on Launchpad.
Besides, having too many Launchpads on the market leads to no real purchasing power from the community. After a while, a lot of Launchpad was born, more and more IDO projects appeared but “sell as not to sell,” sell but sell very little, or structured all for a few “family” wallets so that the amount of external tokens Not much, for easy pumping, communication drives prices.
Here are 2 cases:
- Participants can’t buy it, a few times like that, disappointed, give up -> Reduce FOMO and excitement.
- People who did not intend to buy at first but were informed by FOMO -> Buy when the price rises -> Swing to the top -> Depressed, give up.
The project only sells “vision” but has no real value
Most of the projects being IDO in the past are built on two emerging blockchains, Binance Smart Chain and Polkadot.
The growth of Binance Smart Chain (BSC) comes not from technological innovation but FOMO. Most of the projects built on BSC are “copy & paste” from Ethereum. The community is caught up in the FOMO vortex, not because of the underlying technology.
Polkadot, after a while of hype, many projects built on DOT but all have to wait for the mainnet to know when.
The current situation of the IDO segment has many similarities and is reminiscent of the “ICO fever” period between the middle and the end of 2017. Then, in the direction of Bitcoin’s price increase, a series of ICO projects emerged as “mushrooms” grew after the rain,” presented all kinds of ideas, and raised billions of dollars in investment from the crypto community.
However, these projects disappeared again when the market turned around in 2018 and 2019. It is not until 2020, when Bitcoin recovers and grows to new highs, that these ICOs return and initially realize what they pledged to do 3 years ago.
IDO still has hope
However, the IDO market still has some points worth looking forward to, as follows:
- Many strong teams have not yet launched their ideas, are incubating the project, waiting for the right opportunity, and waiting for enough resonance before officially implementing.
- Serious project builders still abound, especially Solana with the upcoming Launchpad platform AcceleRaytor on Raydium.
- CoinList has recently emerged as a highly regarded Launchpad. Not because it’s new or has any unique mechanism, but because basically, many people who participate in buying and selling tokens on CoinList still win and win big. Meanwhile, Polkastarter still leads in terms of quality.
- Some funds “have a heart,” participating in incubation with real potential projects. Such projects will lead and take the market to the next level.
However, players need to be aware that investing in IEO/IDO at this time should only be viewed as a “short-term” game following the market’s uptrend. Like the ICO in 2017, the current IEO/IDO 2020-2021 movement is heavily dependent on the overall situation of the cryptocurrency market. The investment nature of both is still the same, still tied to the value of coins/tokens, full of price pump/dump tricks.
Therefore, from the perspective of investing in newly launched IDO projects, only presenting ideas but not having actual products or applications, it is not advisable to put too much hope in the long-term future as well, like investing too much money in them. If you decide to participate in the IDO game, you must be willing to take risks and be willing to accept losses. Investment decisions are entirely up to each person.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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