Initial DEX offerings are the new initial coin offering. So, what’s the difference between an IDO and an ICO other than that one letter?
Really a lot.
while IDO and IEOs Both are listed directly on the exchanges – decentralized exchangeIDOs are a do-it-yourself process, much like ICOs – in the case of centralized exchanges, or DEXs, for the former and the latter.
One big difference The amount raised is between the IDO and the ICO. Nobody sees a 10-figure IDO matching Block.one’s $4 billion ICO or Telegram’s $1.7 billion anytime soon.
Those ICOs also showed the power of the SEC, which generally made it easier for companies willing to pay fines and release delinquents abroad. Block.one, which raised $4 billion, paid a comparatively modest $24 million in fines. Telegram, which fought the SEC, returned $1.2 billion out of $1.7 billion and shut down its TON blockchain.
IEOs, on the other hand, are controlled by exchanges, which act in many ways such as underwriters — middlemen — who lead companies that go public on the NYSE or Nasdaq through the process. In IEOs, centralized exchanges such as Binance Launchpad and Huobi Prime scrutinize issuers, provide regulatory and know your Customer (KYC) and anti Money Laundering (AML) services, and market of sales – for which they charge an arm and a leg. Unlike underwriters, crypto exchanges do not buy and resell tokens – in fact, sales fail more than a few IEOs, regardless of cost.
IDO vs ICO
In both an IDO and an ICO, the token-issuer pays no direct fees to intermediaries, which is in line with the peer-to-peer ethos of bitcoin and its successors. That said, IDO launchpads like Polkastarter and Binance Launchpad are changing as they become more common, but don’t have nearly the cost and control of centralized IEOs.
However, each IDO and ICO issuer is responsible for its own marketing, and each must create the smart contracts used to sell the tokens – including arranging any audits – and conduct their own legal scrutiny. This includes outsourcing AML and KYC compliance, as well as general securities offering registration requirements.
Then there is the matter of tokens. ICO tokens are often minted after the sale, which takes place on the company’s website. This comes with a huge cost, as the issuer needs to have an exchange listing, preferably a top centralized exchange. It can reportedly cost anywhere from $100,000 to several million dollars – which removes a significant downside for an IEO, which has built in fees to the listing cost.
One advantage of IDOs is that, by their nature, tokens are immediately listed on the decentralized exchange on which the offering was made. That said, despite decentralized finance (DeFi) boom, even top DEXs like Uniswap or PancakeSwap have far less liquidity than top centralized exchanges, and are more difficult to access, which may put off some potential buyers.
One thing that IDOs and ICOs share in common is that they rely on knowledgeable community activists, who either build the community and provide real decentralization, or have a serious Achilles heel depending on your point of view. Leaves potential buyers short on information.
There is also the issue of fairness in the ICO/IDO debate. IDO shares are immediately tradable – in fact there is no way to enforce the lock-up period often used by ICOs. ICOs often offer insiders and early investors favorable terms that are not available to regular buyers. This is not possible in the realm of a smart contract controlled IDO.
This does not mean that the IDO has no flaws – the Uniswap IDO of DeFi lending platform bZx in mid-2020 was dominated by bots that beat every other and drove the price up before dumping. DeFi Launchpad handles this by limiting buyers to a pre-approved whitelist with a strict per-buyer maximum. But to be included in the whitelist, buyers must have the native token of Launchpad.
Benefits of DeFi-ance
That doesn’t change the reality that hot IDOs sell out in seconds. In April, OccamRazer, an IDO launchpad for the decentralized Cardano protocol, showed its chops by holding a hugely successful IDO of its own, selling 200,000 OCC tokens in just 20 seconds. Like many popular IDOs, it was largely oversubscribed, leaving most of the 150,000 potential buyers out of luck.
While IDO is being used extensively by DeFi projects, nothing is stopping centralized crypto companies from reaping their advantages in cost and time – the process is much less intensive, making IDO perfect for smaller companies. is.
A non-DeFi company that is going i do The route Estonia is located paid coins, a business-to-business crypto payment solutions company that offers a range of products. most notable Cryptoprocessing by CoinsPaid, a white label-ready cryptocurrency payment gateway that accepts over 30 coins and 20 fiat currencies, promises the best exchange rates. Its ecosystem includes an institution-focused exchange and OTC desk, cryptoprocessing, and B-to-B and B-to-C hot wallets audited by Kaspersky Lab and 10Guards, and a cryptocurrency explorer.
Noting that security is a key in all of its offerings, Kaspersky-certified CoinsPaid noted that its turnover quadrupled in 2020, giving it 5% of all global on-chain bitcoin transactions.
CoinsPaid, a top global cryptoprocessing company, was crowned payment provider of the year At the AIBC Dubai show last month. After securing its place in the payments space, the fintech is in the process of expanding its services to include decentralized finance (DeFi).
Launched on 1st June CoinsPay’s IDO Launched CPD, a DeFi cryptocurrency that will act as a utility token, offering 20% discount to B-to-B and B-to-C customers who pay in CPD. B-to-B customers get an additional 5%-20% discount on betting CPD, while B-to-C customers get 5%-30%. There is also a 10% B-to-B customer promotion. Payments using CPD tokens offer 50% discount on all transactions, and an unspecified discount on all future products.
On the real DeFi side of things, CoinsPaid offers 20% staking APY, 10%-50% CPD bonus and monthly token burn on yield when invested through the CoinsPid dashboard. The company is selling 16 million of its 800 million CPD. Token swaps are available for Ether (ETH), Tron (TRX), Binance Smart Chain Token (BSC), Solana (SOL), and Polkadot (DOT).
Offerings coming later this year include a CPD loyalty system with a DeFi dashboard scheduled for Q3 2022, and a media site in Q3.
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