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BEGINNERS GUIDE Crypto Weekly
Exactly what is an IDO (Initial DEX Offering)? The use of DEXs (Decentralized Exchanges) allows for the exchange of cryptocurrency tokens in an IDO. Liquidity pools (LP) play a critical role in IDOs by providing liquidity following the sale. IDO users can lock funds in exchange for new tokens when a token generation event occurs. With the new token, some of the funds raised are added to the LP, which is later returned to the project. IDOs allow projects to easily and inexpensively distribute their tokens. A portion of the funds raised is used to create a liquidity pool for the project's token. The remaining funds go to the project team. Tokens will be available for trading after the token generating event. Liquidity is typically locked for a certain period of time. The tokens are transferred to the user at the token generating event, and the LP opens for trading.
What are some pros of an IDO? 1. Post-sale liquidity provided immediately. IDOs will lock up some of the funds raised in liquidity pools to create a liquid market post-sale. By doing so, slippage and volatility are minimized. 2. No registration is required. No personal details are required to
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n IDO's structure depends on the DEX that runs it, but there are a few common approaches: Following a vetting process, a project is accepted to run an IDO on a DEX. Tokens are offered at a fixed price, and users lock their funds in exchange for the tokens. Once tokens are generated, they will be transferred to investors. In most cases, there is a whitelist of investors. You may need to complete marketing tasks or provide your wallet address to join the list.
March 2022 | Volume 17
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