Since the inception of Bitcoin in 2009, cryptocurrencies have sparked interest in the media and, we’re sure, even in your everyday conversations. We’ve seen the rise of Ethereum, which enabled the emergence of numerous ventures by combining the power of decentralised transactions with Smart Contracts. As a result of this growth in popularity, the market began to see the launch of new forms of initial offerings in early 2016, including ICOs, IEOs, ILOs, and STOs. This indicated a spike in the prevalence of Decentralized Finance (DeFi) ecosystems, resulting in the emergence of a modern form of token issuance – the IDO (Initial Dex Offering).
In this step-by-step guide, you’ll learn this new financial model and how to launch your own token.
Let’s start by discussing the issues plaguing the Crypto Space
Nothing is perfect, and cryptocurrencies are no exception. Despite its potential, the market is challenged by functional and structural issues that work against it.
Lack Of Information
Back in the days when Bitcoin wasn’t even close to $1,000 apiece, there just wasn’t enough information circulating around about it. Even today, many coins and tokens list or launch without providing any real information for investors to look into.
When exchanges weren’t a thing in the crypto market, many coins and tokens had to rely on forums to promote themselves which really isn’t the most reliable source of information. This resulted in many crypto scams and rug pulls, leaving investors with even lesser confidence.
Not only that but there wasn’t much information about cryptocurrency in general back in the days. It wasn’t until recently where people are starting to share more information with properly built websites, and whitepapers.
Issues With IPOs and Trading
Cryptocurrency and stocks are fundamentally the same when it comes to trading. The difference here is that cryptocurrency currently has no legal regulation while stocks are overlooked by the SEC and related authorities.
There are many situations where cryptocurrency is traded Pre-IPO without any transparency before it’s available for public trade. This causes the token or coin to be either underpriced or overpriced as it launches without the public knowing the workarounds behind everything.
This is also one of the reasons why many are still skeptical when it comes to trading or investing in cryptocurrency as it really is a huge gamble sometimes.
The Missing Hype
It’s easy to see cryptocurrencies like DOGE, XRP, or even CAKE nowadays being heavily marketed by their creators or even the investors. This may sound like a norm but it wasn’t always this way.
First introductions of cryptocurrency had almost no marketing efforts to grow the user base. There was no hype surrounding it thus barely anyone knew anything about it. This also made it difficult for the public to even trade it.
Other Underlying Issues
That’s not the end of it though. Remember when we talked about crypto having very little public information? Well turns out, even if you did have a lot of information available to you, you’d still have had a hard time trading it.
Earlier crypto trades were through private invites. It wasn’t until the introduction of Coinbase in 2012 that Bitcoin was public traded for the first time.
We also have to keep in mind that cryptocurrency is basically a line of code running through different algorithms. This means that it is open to bugs and it already has been attacked once by an INVDoS in 2018.
The success or failure of an ICO is determined by the marketing efforts that precede it. Bear in mind that failing to attempt to raise token recognition or extend the token’s user base would result in a negative outcome. As the blockchain ecosystem is still young and lacks standards, participating in token sales can be a hurdle for the average person. It’s challenging for the general public to access as sale events might only be available through private invitations.
The Start Of IDO Marketing
With all the issues addressed above, you must be wondering if it’s any different today? Well, other than the fact that blockchain has now been heavily improved ever since its first introduction, we also currently have DeFi (Decentralized Finance).
DeFi is definitely the largest thing in blockchain currently which allows multiple entities to save a copy of a transaction’s history. Known as ‘Open Finance’, the inherent technology opened up the crypto world to your usual financial products which weren’t available before.
Among the many things that DeFI brought along, such as Flexible Savings, Fixed Deposits, Staking, and Liquidity Pools, IDOs were also introduced as a result.
What’s An IDO?
IDOs, also known as Initial DEX Offerings, are basically projects that launch a token through a decentralized exchange, or DEX, which also help the operatives to raise funds on their behalf. It is now easier for startups to raise funds for their tokens from individual investors.
Not only that, but they also no longer have to depend on intermediaries who usually charge a fee to do the same thing. IDOs allow instant trading, liquidity, and a lower cost for the initial listing which just means a win for everyone.
Launching an IDO
Preparing for an IDO Launch on the DeFi ecosystem entails similar marketing and planning strategies to previous models such as ICO or IEO. This time, by selecting a platform that incorporates the right fundamentals while adding a subtle twist to Social Media marketing, the creation of whitepapers, and website development:
- To begin, you must identify the appropriate DEX aggregator that offers the most competitive rates across multiple DEXs on the Ethereum blockchain. The DEX provider will ensure that your project gets off to the best start possible, increasing the likelihood of success in this fast-paced and dynamic space. They’ll assist you in guaranteeing completion through a range of methods, including AMA (Ask Me Anything) sessions, public statements, and news mentions. Thus, it is important to prepare a contingency plan for the DEX aggregator who will serve as your partner throughout the preparation process.
- Once you do so, you must review the different IDO hosting platforms, also known as token launchpads. The launchpad can fulfil your criteria for credibility, but it’s also a good idea to look at their fee structure and what kind of marketing support they provide. To be considered for launchpad participation, a project must demonstrate awareness, which includes appearing in the press and putting forward a strong publicity effort. Not to mention, a project must have a robust Tokenomics model.
Pro Tip: Choose the right launchpad and you’ll have a solid foundation for long-term success.
- If you want to incorporate a governance component into your project, you can dedicate a portion of the token supply to a governance fund that allows for user participation.
- Once you’ve completed all the groundwork for a successful project launch, the next step would be to explore creative and out-of-the-box marketing strategies such as token lock prizes and bounty schemes. Additionally, you’ll need to ensure that your smart contracts and documentation all stand up to inspection, which is why it’s a good option to use emerging platforms such as Online Interactive Portals to allow for the viewing of your whitepapers.
- With new users flooding the crypto realm on a minute-to-minute basis, maintaining an E-commerce-like marketing approach would be the most effective way for onboarding both potential and existing crypto investors. Make your strategies different and unique, while adhering to global marketing trends!
How can TokenMinds assist you in launching your token with the IDO model?
Efficacy analyses and action strategies are critical resources that every potential entrant to a business should use if they hope to succeed. TokenMinds is a market leader in blockchain consulting services, and its evidence speaks for itself:
- When you collaborate with TokenMinds, you’ll have convenient access to the expertise you need. Through connections across leading platforms, we offer accessibility to insightful industry leaders with extensive experience.
- For any aspiring DEX – we have the needed experience, knowledge, networks, and success strategies needed. With a track record of successful collaborations, you can trust TokenMinds to manage your IDO processes from start to finish.
- TokenMinds employs a variety of marketing advisory strategies. We will help you develop a successful token launch by integrating your groundbreaking idea with a comprehensive marketing plan.