What is IDO & IEO?

Several innovative approaches to fundraising have emerged as the crypto industry has evolved and matured over time. What started with the ICO (initial coin offering) boom in 2017 and then the IEO (initial exchange offering) boom is now centered on the IDO or Initial DEX Offering – a new type of decentralized and permissionless method for crowdfunding.

While initial coin offerings (ICOs) were once all the rage in the crypto world, they were usually dogged by difficulties such as governance and investor safety. Several initial coin offering (ICO) projects promised high returns in order to entice investors, but the vast majority of them turned out to be scams. They also tarnished the bitcoin industry’s reputation, deterring many new investors from joining in.

This is where the IDO comes into play. By introducing an alternative decentralized approach to fundraising, the IDO is now opening up a new fundraising method in the crypto space and providing crypto investors with access to a different, more equitable crowdfunding model.

Individual investors support initiatives that issue IDOs in the same manner that regular companies do before they begin. Several IDO platforms are now accessible, each with its own set of participation guidelines. When a project launches an IDO, it usually means it is launching a decentralized liquidity exchange to issue a currency or token.

It’s critical to examine how IDOs differ from ICOs and IEOs in order to fully comprehend their impact and benefits.

What is an ICO?

An initial coin offering (ICO) resembles an initial public offering (IPO) (IPO). In contrast to an IPO, when investors receive shares of a company’s stock in exchange for their investment, investors in an ICO receive a cryptocurrency token – the blockchain equivalent of a share.

What is an IEO?

An initial exchange offering (IEO) is a type of initial coin offering (ICO). While ICOs allow crypto ventures to directly contact investors, IEOs are run via crypto exchanges.

Difference Between IEO & IDO

In an ICO, issuers are responsible for all transactions and operations, whereas, in an IEO, everything is handled by a centralized exchange host. In truth, the platform that handles the fundraising process is the sole distinction between IEO and IDO.

In both IEO and IDO, organizations can typically swap tokens directly with individual investors and traders. You do not have to pay an exchange fee in an IDO because it is self-organized and decentralized, unlike in an IEO. Rather than exchanges, people of the community review initiatives and currency. In reality, the IDO is a cross between an ICO and an IEO, with the exception that a centralized exchange (CEX) is substituted by a decentralized one (DEX).

Advantages Of Using IDO Model

Reduced costs

When a project obtains funding through an IEO or ICO, it often must first pay exchange fees and wait for the exchange to authorize the project before being listed. IDO-based projects don’t have to pay expensive fees and don’t require permission from anybody because they’re completely decentralized.

Open and fair fundraising

When adopting the IDO fundraising strategy, companies, particularly startups, do not need a centralized exchange to initiate a fundraising event. Furthermore, anybody may start or participate in an IDO.

Immediate Liquidy

DEXs enable IDOs with rapid token liquidity, allowing them to run smoothly and without any unexpected user disruptions. As a consequence, as soon as the project is released, investors will be able to trade the project token. When a project’s token gets quick liquidity, its price normally climbs in tandem.

Fast Trading

IDO coins are immediately tradeable. This enables investors to buy tokens as soon as they are available and then resale them at a higher price later.

Improved User Experience

By integrating a secure wallet and trading platform support into a single interface, IDOs help consumers save time. They can also handle a variety of wallets, greatly improving the user experience.