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14Exactly what is an IDO (Initial
Crypto Weekly
Exactly what is an IDO (Initial DEX Offering)?
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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.
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
An 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. 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.
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participate in the sale, and only a wallet and funds are needed. This makes the sale (potentially) accessible to everyone.
3. Projects can be funded quickly and affordably through
IDOs. In most cases, launching a token through a DEX is easier and cheaper than using a centralized exchange.
4. Many IDOs enact anti-whale measures, which prevent large numbers of tokens from being purchased by a single investor.
What are some cons of an IDO?
1. Lots of potential for scams. Because there is so much demand for IDOs, scam artists can set up seemingly realistic-looking projects quickly and with little effort.
2. Price jumps at the launch of the IDO. As soon as the first person buys a token, its price rises. As the demand increases, so does the price. The value of a token increases before many investors have the opportunity to purchase it at the initial price.
3. Potential for price manipulation. IDOs are also susceptible to pump and dump schemes. Some traders may use a trading bot to stockpile tokens at a low cost at the start and sell them after the price has risen enough for them to make a significant profit.
Tips to keep yourself safe when participating in an IDO.
If you want to keep yourself as safe as possible when investing in an IDO, here are some easy, practical tips:
• Make sure you signup using the correct link. Scammers create fake IDO subscription pages to capitalize on the event's excitement and hype. If you transfer it to a scam page, your crypto will be permanently lost.
• Make use of a trusted DEX Launchpad. IDOs can be launched on many trustworthy DEXs, like PancakeSwap. Using a trusted launchpad gives you the best chance of receiving your tokens after the sale.
• DYOR. Does it come from a well-known and trusted company? How will the funds raised be invested? Has a product already been developed? The answers to questions like these can help you avoid being scammed.
• Review the IDO terms and conditions. In some cases, the tokens can take a while to arrive or be locked for a set time period. There are practically no limits to what can be done depending on the tokenomics of the project, and you should understand them thoroughly.
Like any investment, you might make, only invest what you can afford to lose. Cryptocurrency launches, like IDOs, are notorious for their volatility. While you may be tempted to buy more than you can afford, try to keep a level head. Even having conducted a lot of research, there is still a chance that you could fall victim to a scam or rug pull.
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Bitcoin Core could be updated again in April
Since it was launched in 2009, Bitcoin has undergone numerous upgrades and changes. The Taproot upgrade was the most recently implemented and significant upgrade on its network in the past four years. Now, yet again, there are speculations that Bitcoin Core might see its next major release around April as the first RC version (v23) is released on Github.
Update on Bitcoin Core
Apart from the Github announcement, little is known about the upcoming major release. Colin Wu pointed out recently that Bitcoin Core might release its next major version in April. According to some users on Twitter, the upgrade will mainly improve transaction privacy and allow recurring payments without third parties. All other implementations follow Bitcoin Core's guidance since it is the Bitcoin source code's reference implementation.
Bitcoin Core 22.0, the 22nd version of the update, replaced version 0.21.0 in September 2021. In November 2021, Bitcoin Core 22.0 was the first major release to support the Taproot protocol upgrade. As CTO at Blockstream Bitcoin development studio, Gregory Maxwell proposed Taproot in 2018.
As a result of the Taproot upgrade, multiple signatures and transactions are grouped, making the BTC network easier to verify. While the BTC network rarely undergoes drastic changes, it shows that the network is still evolving, even if progress is steady.
Bitcoin Price Still Range Bound
With the speculations around a new BTC update scheduled for the next month, if the same happens, a decent price rebound could be expected by traders. However, at press time, BTC traded at $40,182, noting a 5.08% daily drop in price.
The difficulty of mining Bitcoin decreased by -1.49% in a recent article as the price of the crypto consolidated. Retail investors returned to the Bitcoin market despite the recent decline in the top coin. Thus, short- or mediumterm price pumps may occur as a result. For now, however, with the recent rally cooling off, the larger market also saw a pullback as the total crypto market cap fell under the $1.8 trillion mark.
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NFTs Become Modern-Day War Bonds as the Crypto Community Rallies Around Ukraine
Over $22 million has been raised in crypto to help Ukrainians purchase weapons and supplies, including more than $3 million in NFTs.
It was announced on February 26 that the Ukrainian government would begin accepting cryptocurrency donations. The public responded during the sixth day of the Russia-Ukraine war on Tuesday. Ukrainians were able to purchase everything from arms to medical supplies using more than $22 million raised in crypto, including more than $3 million raised through NFTs.
Due to their relative liquidity and transparency, NFTs have become an essential tool for art communities seeking to support Ukrainian defense and humanitarian efforts. Over the past week, several non-fungible token sales have taken place, with these tokens taking on the role of the war bond of the 21st century. "The Ukraine conflict has become the first crypto war in history," according to the Washington Post. Like the recent calls around the sale of NFTs, an appeal to moral conscience would inspire the exhortation to buy
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these. However, it is not free of pitfalls like other wartime measures. Revenues are donated to a charity for Ukrainian civilians.
In a video, crypto-art pioneer Olive Allen, of Russian descent, burns her passport outside the Russian consulate in New York. The artist is selling the single clip as an NFT in order to raise funds for the people of Ukraine. Allen believes his responses are responsible for capturing the essence of our times, pushing boundaries, and looking for deeper meaning. "Having lost my passport, I have now become a citizen of the metaverse."
Russia's UkraineDAO (an autonomous decentralized organization) was founded by the Russian artist and founder of Pussy Riot, Nadya Tolokonnikova. Come Back Alive, a crowdfunding organization that helps Ukrainian military members and their families, said it would distribute 100 percent of the funds it raised. Due to Patreon's rules, the group was removed several weeks ago.
UkrainianDAO's NFT was released with a PartyBid, a tool that lets people bid collectively and own fractional pieces of the artwork if they win.
"The organizers intended to avoid adding Pussy Riot's own work to this release," Tolokonnikova told Artnet News. "In a sense, it's like our solid conceptual statement. We all have different aesthetics, but what matters is what we unite to save lives, not what color we prefer. The Ukrainian flag unites us."
In addition to selling NFTs, RELI3F raised more than $1 million in ETH. 185 Ethereum (roughly $485,600) has been transferred to three wallets associated with Come Back Alive and local Ukrainian media vetted by Kyiv Independent and a group of frontline workers. According to the group, the remaining ETH will be saved to support humanitarian efforts in future destabilization.
Aleksandra Artamonovskaja, a RELI3F team member from Ukraine now living in London, says DAOs played an essential role in mobilizing relief efforts. She has said Web3 makes it possible to distribute money most effectively and as transparently as possible.
West-based artists have also joined forces with Ukrainians fighting off the invasion. With 100% of proceeds going to RELI3F and UkraineDAO, Shepard Fairey released one edition of his NFTbased work Diplomacy Over Violence. There is also a moral dilemma in play when many in the crypto community support Ukraine.
NFTs and cryptocurrency may be used to help Ukraine with digital war bonds and fast-tracked payments, but rogue states can also use them to circumvent sanctions. In 2014, for instance, the crypto research agency Elliptic discovered that pro-Russian separatists in Crimea used crypto to avoid sanctions. According to Jesse Powell, the head of research at Elliptic, it may not be possible to track, much less freeze, the accounts of Russian clients.
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Policy Makers Raise Alarms & the Crypto Industry says it is Following Russian Sanctions
Even though policymakers are concerned about Russia using crypto assets to evade U.S. sanctions over its invasion of Ukraine, market leaders insist they haven't seen evidence of it and are fully compliant with U.S. measures.
The crypto community argues that digital assets present an unworkable alternative for the Russian government and oligarchs looking to end-run Western sanctions. According to them, the roughly $2 trillion cryptocurrency market is too small to meet Russia's financing needs. It is said that oligarchs cannot move significant amounts of their wealth undetected on the blockchain because authorities can monitor it. Blockchain is a transparent online ledger that serves as the basis of cryptocurrencies. “Red herrings are such a waste of time! Due to the massive sanctions we are seeing, crypto does not have enough depth to prevent the kinds of evasion we are trying to stop.” The officials aren't convinced. "I think it illustrates the need for a strong regulatory regime that permits appropriate activity but prevents inappropriate activity," said Federal Reserve Chair Jerome H. Powell during testimony before the Senate Banking Committee on Thursday. The executive director of the crypto think tank Coin Center, Jerry Brito, says, "If an oligarch moves $10 billion, it will be evident to people operating crypto's on- and off-ramps. There are laws on the books and all that." Powell said, “We also need a legal framework that will eliminate as much as possible the possibility that people will use unbacked cryptocurrencies as a way to evade the law, finance terrorism, or hide their illgotten gains."
Powell replied to a question from Senate Intelligence Committee Chairman Mark R. Warner (D-Va.), who asked Treasury Secretary Janet L. Yellen what the department is doing to ensure targeted Russians are not using cryptography to circumvent sanctions.
They wrote that the crypto industry needs to enforce sanctions compliance vigorously, given that digital assets, which bypass the traditional financial system, may be increasingly used for sanctions evasion.
In a Wall Street Journal article, Yellen said crypto is a "channel to watch" and that the Treasury Department could address the loopholes it presents in
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sanctions. Anti-money laundering laws already apply to crypto participants.
In response to Russia's invasion of its neighbor, the United States sanctioned it. The sanctions are meant to cripple the country economically. The main points would include:
Cutting off the central bank of Russia and freezing its assets in the U.S. Naming certain Russian banks and corporations as sanctions targets. Closing the U.S. airspace to Russian aircraft.
Working with European allies to cut
Russia's connection to SWIFT.
Focusing personally on the Russian President and his close colleagues. There is uncertainty about who will benefit from the world's first crypto war. When it comes to collecting customer data and guarding against suspicious activity, cryptocurrency trading platforms like Coinbase and FTX say they are compliant with sanctions and already subject to the same rules as traditional financial institutions. The Association for Digital Asset Markets, an industry trade group, reported sanctions compliance is taken "very seriously" by the industry. Bond cited blockchain analytics, trade surveillance, and geotagging the Internet as tools. "We are entering a time where utmost diligence will be required, and it is imperative that public-private information sharing continues."
Ukraine's deputy prime minister, Mykhailo Fedorov, called the move "sabotage." Kraken's statement said that "blocking access to digital assets of citizens of an entire country does not necessarily punish the actual culprits."
TripleA, a Singapore-based company that offers crypto payments, estimates that 12 percent of Russians own cryptocurrency. The adoption rate is even higher in Ukraine, where more than 5.5 million people own digital assets or nearly 13 percent of the population.
Data from Kaiko, a Paris-based cryptoanalysis company, shows that Bitcoin and Tether, a so-called stablecoin whose price is tied to the dollar, have been in high demand in both countries since the conflict erupted. Over the past week, Bitcoin's price has risen by 18 percent.
The Ukrainian government has collected more than $42 million in crypto donations, which it has already converted into traditional currency to purchase supplies such as drones and bulletproof vests. In crypto advocates' view, that fundraising campaign is proof of crypto's ability to advance a cause that has united the world as a whole. As they hunt for gaps crypto may present in the new sanctions, they plan to use that evidence to emphasize that Washington policymakers should tread carefully in writing rules for the industry.
“In the fog of war right now, I think there are opportunities for sanctions evasion within crypto," said Adam Zarazinski, CEO of Inca Digital. This data firm works with both the crypto industry and government agencies. "We don't necessarily know what they are all yet."
