The meteoric rise of decentralized exchanges has brought a new way for crypto projects to launch their tokens – Initial DEX Offerings (IDOs). But what exactly is an IDO? And how does IDO Crypto marketing look in 2021?
What is IDO Crypto?
An Initial Dex Offering (IDO) is a type of fundraising model, which is similar to IEOs. The difference is that IDOs are launching crypto on decentralized exchanges (DEX), while IEOs launch tokens on centralized ones.
A decentralized exchange is a type of crypto asset exchange that relies on liquidity pools with which traders can swap tokens. Liquidity pools are pairs of crypto assets and stablecoins. For example, USDT/ETH is a liquidity pair. In DEX, traders can swap between tokens freely without intermediaries.
An IDO launches tokens on a decentralized exchange, such as Uniswap, PancakeSwap, or Sushiswap. With IDO, the team and buyers behind the token retain control over their funds. Besides, IDO is a more cost-effective method of token listing because they don’t have to pay fees to the centralized exchanges. Binance DEX conducted the first-ever IDO-Raven Protocol. Since then, various other blockchain-based companies have launched their tokens on DEXs through IDOs, such as Compound, UMA Protocol, and Balancer.
Differences between ICO/IEO and IDO Crypto
The main difference between IDOs and IEOs/STOs/ICOs relates to how they launch the tokens. ICO is the same as an initial public offering (IPO) process, while the ICO coin issuers manage all the responsibilities. In contrast, in IEO, the centralized exchange conducts the fundraising on behalf of the project.
In the case of Security Token Offering (STO), the security token fuels the investment contract. STO deals with assets that offer monetary profits and must comply with government regulations.
IDOs work almost in a similar fashion as IEOs. In both approaches, the project can directly issue its tokens to individual investors or traders. However, in IDO, you don’t have to pay an exchange listing fee like listing in IEO since there are no intermediates.
Moreover, IDOs solve some of the problems associated with IEO fundraising. With IEOs, issuers are not allowed to list tokens with competing exchanges. And IEO projects have no control regarding the parameters of their fundraising.
What is a Token Generation Event?
A Token Generation Event (TGE) refers to the creation of tokens by a company as a fundraising mechanism. Because these types of tokens are essentially tiny slices of a product, the creators typically refer to the token sales as token generation events or TGEs, as replacements of ICOs.
There has been an increased focus from regulatory authorities to rule ICOs as a security, and thus be liable to tax. Token Generation Events, on the other hand, are not identified as securities. Therefore, TGEs do not incur a tax penalty.
Decentralized Finance(DeFi) Trends & IDO Crypto
There is no doubt that the IDO model addresses some of the issues associated with IEOs and ICOs. More importantly, IDOs add a new layer of intervention to IEOs. It removes the need to seek permission from exchanges to organize a fundraising event. However, at the same time, it leaves loopholes that whales and scammers can exploit. Consequently, projects can be affected by an instant price movement.
Nonetheless, decentralized finance is here to stay, and Initial Dex Offering (IDO) is the next step of crypto fundraising. In the future, projects can integrate control mechanisms into the existing IDO model by adding KYC capabilities. KYC regulations enable issuers to gain more control over who can buy and how many tokens they can buy. Furthermore, setting a fixed price for tokens in your pool until the fundraising has finished can help eliminate variations in token prices until the fundraising is over.
Another growing trend is that it has been easier for token projects to get listed on a DEX. In contrast, centralized exchanges have stricter requirements and often much higher listing fees. That provides a listing choice for upcoming projects that don’t have the resources or liquidity yet to list on a big exchange.
IDO Marketing Strategy
If your blockchain company is preparing for an initial DEX offering, you’ll require a highly targeted IDO marketing strategy.
Strategically implementing an IDO marketing strategy will ideally result in explosive traffic and successful token sale. IDO promotion is also critical in building a community of supporters and developing long-term relationships with potential and existing fans. Additionally, it encourages the community to continue backing the project in the post-IDOphase.
Some of the best IDO marketing strategies projects can utilize to promote their token sales include:
- SEO and Content Marketing: If you want long-term growth for your project, optimize your website, and publish engaging SEO content about your IDO project is a must.
- Social Media Marketing: The key to effective social media marketing is to build an active community that fosters engagement and support for your project.
- Influencer marketing: IDO project can benefit significantly from increased traffic and brand awareness by engaging influencers in their marketing efforts.
- Using DeFi trackers and ratings: Getting mentions in websites dedicated to DeFi projects like trackers, listings, and ratings can significantly boost your token sales success.
- PR and media: Positive media engagement can increase your IDO’s credibility without spending an insane amount of money on advertising.
- Airdrops are hugely popular with crypto investors and a great way to get people interested in the project.
Blockchain Marketing Agency for IDOs
Any IDO project needs an effective and well-executed marketing strategy to achieve success. While most projects understand this concept, few understand how to implement a successful one. A blockchain marketing agency like TokenMinds will work with you to create and implement an IDO marketing plan that brings success to your project.
You need an agency that knows how to promote crypto projects within the community. In addition, many blockchain marketing agencies have an online marketing team for token sale promotions, including IDOs. They also have SEO and content marketing specialists who drive more qualified traffic to your website or token sale profile.
At TokenMinds, we will guide you through the IDO promotion process, providing you with a winning marketing strategy that drives results. We will focus on building your community, increasing brand awareness, and growing your reputation to ensure successful IDO.
Crypto PR for IDOs
Having a relationship with journalists and crypto news and blogs can also help with generating PR and media coverage. Of course, paid press release services can also help create the awareness and visibility you need to generate traction.
You don’t need to buy followers to build trust among the community, however. Positive media mentions through crypto PR can help your IDO gain exposure more quickly and in more relevant places. The more places your project is mentioned, the better. With a sure-fire PR strategy, combining multiple campaigns, the more knowledge and interest the community will have of your IDO. Public relations is critical, and therefore working with a crypto PR firm that understands how to promote your token is a no-brainer.
Want to launch an Initial DEX Offering? Contact our IDO marketing experts, who have experience and expertise to help projects raise funds from the crypto community.