The post What is an initial DEX offering or IDO in crypto? appeared on BitcoinEthereumNews.com.

The crypto industry is famous for its fundraising capabilities, with $10.7 billion raised from venture capitalists in 2023 and three times that amount the year before. Of course, you don’t have to be a venture capitalist to invest in crypto. There are many different types of crowdfunding methods at play in crypto, with one of the most common forms being an initial dex offering, or IDO. What is an initial DEX offering? An initial DEX offering is a method crypto projects use to raise funds through decentralized exchanges, also called DEXes. These are crypto exchanges where users can buy and sell crypto, but unlike a traditional exchange, there is no centralized authority or team in charge of the project. Crypto trades are handled automatically using smart contracts, and the community of a DEX provides the necessary liquidity by staking their own funds for rewards. An IDO allows crypto projects to list their project token on one of these DEXes, with proceeds from the sales going towards funding the project. Users typically buy these tokens in the hope that they will increase in value as the project grows. Of course, this practice buying an asset in the hopes that the associated project will increase in value and therefore pay out dividends to the investor falls under murky regulatory territory, with the US SEC often viewing IDO tokens as securities. Nevertheless, IDOs are a popular fundraising vehicle. A recently established IDO launchpad called Enjinstarter saw significant ROI for its users, highlighting the use case for the IDO in crypto. How does an IDO work? IDOs work by selling tokens on a decentralized exchange to fund a crypto project. Here’s a step-by-step breakdown: The project lists a token on a decentralized exchange and announces a sale Users can find the sale on an…

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Filed under: News - @ July 20, 2024 6:24 pm