Proper IDO Development is key for a successful start of any token project. To summarise the the main aspects and best practises surrounding IDO Development, we have compiled this article to give you an overview of all things one needs to consider.
Initial DEX Offerings (IDO) Development in 2023
IDOs have seen large growth during the 2021-22 crypto hype cycle. While during 2017 many projects went the route of ICOs, the new fund raising tool seems to the IDO.
How did IDO development start?
IDO development first started to emerge as decentralized versions of ICO/IEOs around 3-4 years ago and have since collectively generated over one and a half billion dollars in crowd-powered funding. As you can see in the image above, there was a huge spike in public token sales at the end of 2021, where the total volume raised amounted to over $321M and the number of ICOs/IEOs and IDOs was just short of 400
The well over two thousand IDOs created since then can viewed as a reaction to IEOs being costly with regard to listing fees and other requirements from centralized entities. The great advantage of IDOs is that they make new token projects incredibly easy to access for retail crypto investors and provide all the benefits of decentralized finance.
What could hinder IDO development going forward?
The biggest threat to IDO development, however, is quite plainly put: the market itself. Because where there are lots of potential investors and users, there’s also a lot of competition and it is hard for projects to stand out from the crowd in a free, yet very competitive environment like the cryptocurrency world. Therefore, sufficient funding and/or hype are paramount to success. One thing that can help projects get recognition and guidance is a well-known and trusted launchpad, e.g. Binance, DAO Maker, Pancake Swap, Polkastarter etc.
While markets are still recovering from 2022’s lows, IDO development seems to still thrive, as DeFi seems to attract more users every day, due to regulatory uncertainties and pending lawsuits. According to crypto analytics site Cryptorank, IDOs made up over 70% of public token sales over the past year. Many builders and users alike flock to DeFi and prefer to use IDOs these days but it remains to be seen if this trend will also continue in 2024 and beyond or if centralized exchanges and traditional ICO/IEOs will regain traction, since there is no clear winner between the two variants – each has their own advantages and disadvantages to consider.
Projects in the process of IDO development have to choose wisely and consider both their own business, as well as their project’s community and traders when deciding whether to opt for a decentralized or centralized version of an initial token offering. IDO development has reached many sub-spaces of the crypto realm. are being used by many different kinds of crypto projects. Some simply want to launch a new currency (coin/token), while others opt for NFTs, GameFi, Memecoins, or blockchain service/infrastructure projects.
IDO development and launchpads
Launchpads are essential to IDO development. An IDO launchpad is a platform where IDOs can be launched, often these launchpads are also DEXs or stem from one. It allows projects to gain access to a large investor base while also streamlining the process of the token sale. These launchpads offer a variety of services, such as sale administration, investor verification, and initial liquidity assistance.
2023 IDO development launchpads – A metrics-based overview
Let’s review IDO development with a focus on IDO launchpads. The biggest and most popular IDO launchpads of 2023 are Gate.io Startup, DAO Maker, BSCPad, Polkastarter, Seedify, and Poolz. However, who truly takes the lead depends on the metrics you look at as performance differs greatly depending on factors such as launches, ROI, volume etc. Let’s look at some stats (data & ranking source: Cryptorank)
For instance, DAO and Poolz have launched the most IDOs total with 125 and 109 respectively, while BSC Pad, Polkastarter, and GameFi seem to have the highest ATH ROI among launchpads that have launched at least 50 IDOs already.
If we now look at current ROI however (of launchpads that have at least launched 10 IDOs), WePad, Vent , industry giant DAO Maker and TrustSwap rank highest at 1.65x, 1.53x, 0.92x, and 0.66x ROI respectively.
Total funds raised are spearheaded by DAO Maker ($66.8M), Polkastarter ($32.2M) and Seedify ($23.3M), and the lowest entry point is currently Impossible Finance coming in at a very budget-friendly minimum of $0.01, while at a whopping required entry level of over $500. Trust Swap and DAO are also among the more expensive initial investment launchpads at a minimum of over $400 just under $200. So if you’re looking for cheaper option, you should opt for those that offer entry at under a dollar, like Kommunitas or Avalaunch.
And for anyone who now knows more about IDO development and IDO development services but is still unsure about what an IDO actually is, here are the answers to the 5 most frequently asked questions about IDOs:
What is an IDO?
IDO stands for Initial DEX Offering, DEX is an abbreviation for decentralized crypto exchange. A decentralized exchange uses liquidity pools and works directly peer-to-peer without any intermediaries. IDOs can also sometimes happen via so-called launchpads (e.g. Polkastarter, DAO Maker). IDOs are a type of ICO or Initial Coin Offering, which refers to a type of crowd-funding of cryptocurrency projects that’s typically hosted in a centralized way, e.g. IEOs (Initial Exchange Offerings on centralized exchanges).
Sidenote: If you’ve been in crypto for a few years, you might remember the ICO craze of 2017, when everybody and their grandmother either launched an ICO or bought into one, and – more often than not – failed miserably at it. ICOs were a true hype back in the day and a few projects emerged victorious out of this bubble phenomenon that attracted many scammers, while most were never heard from again.
Unlike IPOs in TradFi (Initial Public Offerings where shares of a company are sold to institutional investors only), ICOs and IDOs are open to retail investors. That means you don’t need to own an institutional investment company or be a fully accredited professional investor to participate.
How does an IDO work?
Initial Coin Offerings are public crypto token launches on decentralized exchanges, that happen in a decentralized manner. The chosen DEX issues the new tokens on their platform as an IDO development service. Not all DEXs function as IDO platforms as well and offer IDOs, but several do, such as the well-known Pancake Swap DEX. The DEX which serves as an IDO platform distributes the tokens to the users who have previously supplied the required funds in an automated fashion, depending on smart contracts and predetermined conditions. The tokens are thereby instantly available for trading on the DEX and some initial liquidity is provided too.
How profitable are IDOs?
Theoretically, being able to acquire tokens at their earliest stage can be highly profitable for IDO participants (early investors) if the project becomes successful after the launch and has the potential for substantial ROI. With the recent IDO development, we’ve witnessed over 500% or even 1000% in returns for IDO partakers in some cases. However, it should go without saying that this form of investing still involves significant risks and is to be treated as such, i.e. extensive research should be done and projects should be chosen carefully.
How do I launch an IDO?
Basically, anyone can launch an IDO, which is not to say anyone can launch successfully and profitably. IDO development, like any kind of project development, takes time, effort, and dedication – and usually also a substantial amount of funding. If you have a strong business model (airtight white paper, solid tokenomics ), funds for marketing, and have created a token with good product-market fit, you can then visit any DEX launchpad and inquire about their requirements for launching, which may differ depending on which launchpad you choose.
Keep in mind that you need to attract investors, build a vocal community, and generate enough interest for your project before you launch, otherwise, you’re doomed to fail. If you fulfill all the necessary requirements, you can get your IDO approved.
What follows is the TGE (Token Generation Event) and the token being listed on the DEX. A token pool needs to be created, where retail investors deposit funds with the aim of receiving the newly launched tokens. Upon TGE completion, the investors receive these tokens. This also gives the creators the opportunity to hold auctions for pricing instead of pre-selling for a fixed price.
Additionally, investors are often encouraged to provide primary liquidity. At a later stage of IDO development, other IDO development services may become necessary. And while there are currently companies sprouting up left and right that promise to provide all kinds of IDO development services, you should always do your due diligence and choose only those that are reputable and can provide actual merit to your project.
Token Liquidity should always be secured with the help of professional market making company. The newly launched token is then ready for trading at the DEX. To diversify their markets, many token projects will still choose to also list their token on a CEX (centralized exchange), to achieve greater numbers and diversity of traders and platforms. In the case of a CEX listing, crypto market making is highly recommended as well to keep buyers and sellers satisfied and markets liquid enough.
What makes for a successful IDO?
Crypto IDOs on DEXs rely on liquidity pools. Liquidity, as is often the case in any form of crypto trading, can become an issue and adequate, long-term liquidity provision has to be taken into careful consideration. Sometimes pools are therefore locked for a certain period after the launch, but one cannot simply lock everyone’s funds forever.
Therefore, after funds are unlocked, or if they aren’t locked in the first place, the chances of a detrimental “pump and dump” happening are high. This is why it’s vital for IDO development that token projects aim for long-term sustainability and success – and for IDO development as a whole – to be mindful of their liquidity supply and seek out professional crypto market makers to support them with liquidity provision software.
Reputable crypto market makers, such as Autowhale can help to establish and sustain healthy token markets for new projects after their initial DEX offering. Especially if a token is listed on several exchanges, automated arbitraging between them can be a useful strategy to implement.