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What is an initial DEX offering?

Are you one of those crypto admirers that want to know everything about new fundraising methods? Have you ever wanted to know what Initial DEX offering is and what it truly represents? If so, it’s essential to start from the very beginning.

It’s no secret that crypto fundraising has significantly evolved. They can include initial exchange offerings, initial coin offerings, and traditional seed rounds. Lately, the initial DEX offering, or as many people know it by its acronym “IDO,” has managed to emerge as the new and preferred model of crowdfunding for DeFi projects.

What does it mean exactly? Well, it means that IDO enables startups to successfully crowdfund their native token on automated market makers (AMMs) and decentralized exchanges. Besides that, it also provides them with a more efficient, secure, and transparent means of fundraising than previous ways of the famous blockchain-powered crowdfunding.

So, what is the initial DEX offering after all? Should we get to know the IDO meaning? Let’s do so!

IDO definition – Get to know the fundamentals

Let us help you understand more about an initial DEX offering. The most simple IDO definition is that initial DEX offerings are tokens that represent any asset that is hosted on a DEX. For those looking for DEXES definition, it’s essential to know that DEX refers to the decentralized exchange.

In other words, we are here speaking about a specific type of crowdfunding, where an issuer distributes IDO coins through a decentralized liquidity platform. It’s essential to understand that a decentralized liquidity exchange is a cryptocurrency asset exchange that utilizes liquidity pools.

Decentralized liquidity exchanges

These liquidity pools enable traders to trade tokens that consist of crypto-assets and stable coins. For example, USDT/ETH is a liquidity pair. Traders can switch pairs between stable coins and different crypto assets, depending on market conditions.

Since stablecoins have low volatility, traders are able to actively control the high volatility of assets and crypto tokens by switching them. Ultimately, decentralized liquidity exchanges are enabling businesses to issue tokens and gain speedy access to funds.

Why were IDOs created?

To get a clear picture of what IDOs truly represents, it’s vital to understand that an initial DEX offering can be created for various things, from cryptocurrency to your favorite music album. They can be used for aether-powered battleships, as well, believe it or not.

IDOs offer businesses a tool that engages with their communities in a specific economy that enriches services and products. At the same time, initial DEX offerings allow them to make wise business decisions concerning their assets.

It’s the same with traditional startups that receive venture capital even before launching. Projects that are issuing IDOs will receive financing from numerous individual investors.

Keep in mind that contrary to an initial public offering, in this case, investors in IDOs will never own any equity in the project.

What are the benefits of launching your authentic IDO?

If you were wondering about the main advantages of launching your own specific initial DEX offering, you could check out a detailed list of the most significant ones down below.

#1 Lower costs

If a project’s token uses a liquidity exchange, it would cost a few dollars of a gas fee to set up a new smart contract. These contracts conduct the liquidity pool and the assets token.

#2 Instant trading

Once the project gets launched, all investors start trading its token. It’s essentially important to note that early token buyers can sell their tokens at a much higher price during the initial DEX offering.

Principally, when the first among these investors purchase a token, the price begins to move.

#3 Liquidity right away

When it comes to a token’s liquidity, keep in mind that it’s pretty critical. This is especially true for a token’s actual value if there is no liquidity right away. Without any slippage at all price levels, a liquidity pool manages to provide liquidity.

The project requires some value for the tokens to reach liquidity to ease token switching in the liquidity pool.

#4 Secure and fair fundraising

In opposition to the traditional fundraising approaches, an initial DEX offering launch makes instantaneous token generation and liquidity possible.

Initially, all private investors were buying a compelling amount of tokens at a discounted price. In addition, once a token goes on sale to the general public, its value enormously rises.

Blockchain platforms for developing and deploying your IDOs

Now that you know what the initial DEX offering is, it’s crucial to understand which blockchain platforms are the most significant to develop and deploy your IDOs. It’s essential to take advantage of the authentic features of each platform.

It will help if you choose the best possible platform for you because a quality platform could increase your IDO visibility due to its user base and popularity.

  • Binance smart chain – The creation of the Initial DEX offering gets a lot of support from the Binance market’s investment community.
  • Ethereum – The plethora of innovative contract features and the nature of Ethereum can help it stand out in its community.
  • TRON – It has faster throughput and the scalability of Tron, assisting in developing and deploying the initial DEX offering.
  • Polkadot – You get a great connection and multichain support once you launch your initial DEX offering with the essential Polkadot system. What it does is that it broadens the reach of your IDO’s.

Basic steps on launching your first DEX offering

Once you’ve reached the IDOs definition and know what they are and the benefits of launching them, it’s time to learn the basic steps of launching your first DEX offering.

Here is what you need to do to launch it:

  1. Create your strategy that will benefit users
  2. Draft a whitepaper to explain your concept to investors
  3. Run your initial DEX offering to start raising money right away
  4. Increase your token’s value by providing utility services
  5. Create and distribute Governance tokens to reward users who improve your platform
  6. Begin serving advanced features of the blockchain technology to increase the value of your tokens

Conclusion

Now that you know the initial DEX offering, you are ready to launch and benefit from your own ICO. Good luck on your journey to success!

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