In 2013, Mastercoin held the first ICO to pioneer the democratization of IPOs in the crypto space by minimizing regulation. However, as more ICOs launched without a clear vision or viable products, they became less genuine and more speculative. According to a study by Statis Group, 80% of ICOs are scams or rug pulls.
Initial Dex Offerings (IDOs) were developed to solve the problems that ICOs and IEOs encountered regarding funding. A launchpad is used to facilitate the token sale, and the investor doesn’t have to pay a fee when issuing tokens.
IDOs have become a standard fundraising model for many new projects in the crypto market, so it’s worth noting some DEXs across different blockchains that are doing a great job at transforming IDO sale processes for the better.
A Comparison of the Major Launchpads
|KYC||Token Burn||Multi-phase IDOs||Registration||IDO duration|
|Seedify||Yes||No (only for $SNFTS)||Yes||No||N/A|
|Polkastarter||Yes||No||No||Yes (Project chooses the number of addresses to be allowed)||N/A|
By lowering the decentralized world’s reliance on centralized capital, Gamestarter empowers the burgeoning venture capital industry within the blockchain industry. When funding through Gamestarter, the risks for both parties—the investors and the startups—are significantly reduced.
The Gamestarter IDO sale process
Compared to the other launchpads, Gamestarter offers the most seamless IDO process.
IDOs take place in two phases, each lasting three days.
During the first phase, anyone who believes in Gamestarter’s long-term vision and anyone who invests in the $GAME token benefits. The second phase then incorporates the Public IDO.
1st phase (3 days of Private IDO)
Projects can prioritize this sale with guaranteed allocation. Each project will set its maximum ticket size. The more $GAME tokens are staked, the higher the APY.
The minimum amount of $GAME tokens to be staked will be set for each IDO. The IDO smart contract will verify if the minimum amount is staked.
In this phase, only $GAME token holders may participate.
2nd phase (3 days of Public IDO)
If tokens remain from the first round, the second phase will begin immediately.
This public phase works on a first-come-first-served basis, and both non-$GAME stakers and $GAME stakers can participate.
100% of the tokens $GAME stakers purchase are allocated back to them. However, if a buyer un-stakes their $GAME during this vesting process, Gamestarter will charge a 10% penalty for both current and upcoming vestings.
Non-$GAME stakers who make purchases during this round will receive 90% of the tokens bought with a 10% charge deducted from the currency purchased.
Gamestarter uses the accrued fees to buy up $GAME from the market. Once the token burner contract is launched, these tokens are ‘burned’ (locked forever in the smart contract) — taking $GAME tokens out of circulation and increasing the token’s value for holders.
Seedify aims to spread the message of promising crypto projects through a governance-driven community and participatory funding mechanisms.
This incubator launched with a $SFUND airdrop to ensure many people would have access to their ecosystem. This strategy catapulted the startup to a peak valuation of $350 million.
The Seedify IDO sale process
All projects must submit a pre-launch and post-launch marketing strategy and spending table and be held accountable for their pre-launch and initial post-launch roadmap. Seedify will also require them to abide by the distribution times. If another party’s tokens are exchanged before the public claim time, Seedify will deduct a substantial fine.
Projects must also submit the total tokens before launch and stay above the IDO price until two vesting periods are complete. In addition, Seedify requires projects to submit listings three weeks before the offering and complete token security audits to guarantee the absence of blacklisting or honeypot features within their token contracts.
N.B. Seedify holds one IDO per week (on average) but plans on increasing this number to at least one IDO every three days. Marketing efforts are aligned with the community’s goals and how strong the project’s fundamentals are.
DAO Maker is a fundraising platform that has become popular because of its flagship product, the DAO pad. A dynamic investment platform where DAO token holders can participate in crypto projects through token sale frameworks called Strong Holders Offering (SHOs).
The DAO Maker IDO sale process
DAO Maker provides two options for venture investing: DAO SHO and Public SHOs.
To get started here, investors need to sign up and complete a KYC process before staking at least 250 $DAO. After this, users can deposit BUSD to buy their guaranteed allocation based on their tier/level tier system or the total staked.
The maximum personal allocation a user can contribute is calculated as follows. For example, if the total raise is $600,000, and a user stakes 6430 DAO — they are in tier 2, it automatically entitles them to a 10% bonus (or 7073 DAO).
Participation here is a longer process.
To participate in PUBLIC SHOs, participants must register an account and connect a non-custodial wallet that holds $500+ worth of Ethereum, Avalanche, Binance Smart Chain, Fantom, and Polygon tokens (Staked tokens in compatible farms/pools will also be counted).
Once complete, you can visit the research page to participate in a Public SHO or share a referral link to get extra winning chances. In addition, connecting and following Twitter accounts contributes to a social score bonus.
Unless they actively choose the non-holder round, for holding/staking tokens, winners buy until the project’s TGE.
Public SHOs pay a 30% fee on their tokens, but winners choosing the premium DAO holder option (over 2000 DAO tokens) pay a 20% fee.
Investors are encouraged to purchase and stake the 2000 DAO to access the Venture Yield contract and preserve their vested tokens. It will also grant access to DAO SHOs with lower fees, higher winning chances, and benefit from Venture Yield Rewards.
Projects can use Polkastarter to create multi-chain token pools and raise funds while growing their communities. Over 100 projects have raised $45 million using Polkastarter’s private and public sales.
The Polkastarter V3 upgrade aims to curb the withdrawal of tokens and counteract price volatility by encouraging IDO participants to stake their newly acquired tokens and earn additional rewards via IDO farming. In addition, projects can set KYC standards that users must meet to participate in the IDOs, plus the restrictions to be followed for participants to be allowed into the list.
The Polkstarter IDO sale process
Prepare the wallet (usually Metamask) on the dashboard, after which you can apply for the project’s allowlist. Then, on the day of the IDO, go to the project’s official website and join the sale.
Once the transaction is confirmed, the investment is considered a success.
Future-proofing IDO fundraising models
Decentralized models are here to stay, and IDOs are the future of crypto fundraising. This model allows anyone to participate in the fundraising process, which is a crucial passage to entry for investors into the cryptocurrency market.
By integrating control mechanisms such as KYC capabilities and fixed prices for tokens, IDOs can solve flaws introduced by whales and scammers looking to exploit projects easily susceptible to price movements.