As a relatively new way of token offering, the initial DEX offering (IDO) day can be nerve-wracking for founders leading a digital token network venture. The IDO process is still maturing and will continue to evolve as the market grows.
If you’re considering launching an IDO, read on to learn what to expect during IDO day —and how to work around surprises and unexpected outcomes.
An IDO is a currency offering done through a decentralized exchange (DEX).
A DEX is a crypto exchange platform that can provide immediate token liquidity. Immediate liquidity reduces the chances of slippage and volatility.
IDO tokens get instantly listed on the decentralized exchange where they were issued. In general, IDOs are affordable and accessible. This makes it easier for small-scale projects to gain traction.
The availability of an IDO is not only a plus but also a disadvantage. It opens the possibility of scamming projects.
Wherever investors go, scammers follow. As you prepare for IDO day, keep your systems in check to prevent scammers from sabotaging your efforts.
A scammer will impersonate your IDO project and use social media platforms to advertise it. Not only can these fake accounts sabotage your IDO, but they can also damage your credibility.
Here are some ways to mitigate the risk of scammers:
• Make sure to redirect your potential investors to all your legitimate sites and social media accounts.
• Establish an official Telegram or Discord channel where you can post all official news in real-time
• Encourage your community to look out for scammers and report them.
A DEX uses smart contracts to form liquidity pools, a collection of different tokens. This makes transactions faster and more reliable. As a result, you can mint tokens instantly.
The IDO creator is responsible for developing the smart used to sell tokens. That means that the launchpad and the IDO creators collectively manage the contract.
You may hire more experienced developers to create smart contracts for you. Aside from creation, expect to conduct audits and regulatory checking.
Be sure to visit a DEX launchpad. You can choose to deploy your IDO on various platforms. Generally, your IDO will be approved once you meet consensus and whitelisting requirements.
Choosing the right platform to post your listing information can help you in the following ways:
• Boost IDO visibility
• Gain edge over other IDOs in the bull market
• Allow investors to get information on your projects and deals
• Provide retail investors or users with the best deals
The crypto community is passionate, and IDOs are a form of crowdfunding. As such, you’ll see a wide range of opinions from the people in the community.
You should be actively monitoring community sentiment and taking steps to address any legitimate concerns that you come across. Address any issues early in the process and prevent them from becoming more significant problems.
It’s important to remember that cryptocurrency markets are volatile.
You should be aware of the potential effects of sudden price changes on your offering. Make sure that your project is resilient enough to withstand these fluctuations.
Here are a few reasons why token valuation can change in an instant:
Oversubscription
The limited number of tokens can create instant price surges and declines.
Market crash
Prices might drop after an IDO because of an unexpected market crash.
Price manipulation
In a pump and dump scheme, traders use bots to buy many tokens at base value and then sell them sharply later.
One of the biggest mistakes in IDO is to launch one without having an equally strong marketing plan. You need to do more than just build something good—you need to advertise effectively as well.
Have a key opinion leader (KOL) promote your IDO. KOLs are people who have a large following and are known for their expertise. They could be bloggers, influencers or even celebrities.
In the crypto space, KOLs can be used to promote your IDO through social media channels such as Twitter, Facebook and LinkedIn.
Here at Social Staircase, we can connect you with top IDO influencers. We’ve worked with many IDOs in the past and know what it takes to create a successful campaign. If you want to attract more investors, be sure to hire an agency like ours.
Now that you know what to expect on IDO day, you should feel more prepared for whatever happens during your own token sale or an IDO by another project.