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The Next Part of Token Sales: Decentralized Exchange Offering

The next part of the History of Token Sales is on the IDO!

IDO stands for Initial Dex (Decentralized Exchange) Offering. This is the next iteration of the public sale option for crypto projects.

BTC was recovering in 2020 and entered consolidation. Altcoins also bounced hard

If you missed the first two parts of our history of token sales, here they are:

NEXA { xMint } *️⃣ on TwitterNEXA { xMint } *️⃣ on Twitter
NEXA { xMint } *️⃣ on TwitterNEXA { xMint } *️⃣ on Twitter

Although decentralized exchanges have been around for many years, the IDO form of fundraising became very popular with the rise of @Uniswap , browser wallets such as @MetaMask , and Automated Market Makers

All of a sudden, projects did not need exchanges to facilitate liquidity or fundraising-they could simply open a liquidity pool.

DeFi summer in 2020 was a very different environment than in 2018 and 2019 and the market started to recover.

Projects would open a liquidity pool and allow users to buy and sell the tokens on the dex. Projects would also have some whitelist opportunities, where you would send your ETH to a sale address and then get sent the project tokens at the time of the launch.

IDOs had many great benefits: They were decentralized and permissionless for both projects and users; they had instant liquidity, and users had full custody of their funds.

On the flip side, IDOs also had many scams. Because projects could pull their liquidity at any time, we saw many rug pulls and investors losing all funds. Many people lost a great deal of money during this time.

Furthermore, because trading was on chain, bots were an issue with regards to buying large amounts of the token supply and selling them to ignorant investors.

This concludes our IDO section!

Public sales through dexes are still very popular today. Protocols such as Balancer, Fjord Foundry (formerly Copper Launch), and others are interesting ways to publicly launch a project.

This post is based on this twitter thread.


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