IDO has become one of the most popular ways to raise funds in the crypto industry. On what platforms do projects release their tokens, how to participate in the distribution and what is their disadvantage
A fundraising method called IDO began to gain traction in 2020 amid growing interest in the DeFi field of decentralized finance. At IDO, fundraising is done by using smart contracts. The tokens issued by the projects are already backed by investor liquidity pools on DEX. Often, the IDO token grants its holders the right to vote and control the direction of the underlying protocol.
A distinctive feature of IDO: the supply of tokens is limited, so the organizers resort to special mechanics to allow the maximum number of participants to participate in them. For example, they limit the volume of tokens for purchase per user, or hold lotteries. Each project has its own rules for the lottery.
To take part in most IDOs, participants need to register in advance and sign up for the white list.
You can search for IDOs through special aggregators such as CoinList. At the moment, it is common practice that projects conduct token sales at several sites at once.
As for projects on the Ethereum blockchain, such IDOs are carried out in the form of a listing of tokens on decentralized exchanges, primarily Uniswap. The first major IDOs took place there in mid-2020. Due to the high fees on the Ethereum network, IDOs are growing in popularity on other blockchains as well.
Projects in the Polkadot network run IDOs on the Polkastarter platform. It issues its own POLS tokens and Polkastarter governance tokens. Polkastarter was launched in December 2020 and has funded over 40 projects since then.