Post the era of Initial Public Offerings (IPOs), Initial Coin Offerings (ICOs), and Initial Exchange Offerings (ICOs), we now have the emergence of Initial Liquidity Offerings (ILOs). It is a new method used by startups to raise funds from interested investors in the market. They sell crypto tokens on popular DeFi-based Decentralized Exchanges (DEXes). Let us know about how to develop a game changing Initial Liquidity Offerings.
What does an ILO imply?
Every crypto token requires a sufficient amount of liquidity to boost its price and trading volume. However, if entrepreneurs list their tokens on a Centralized Exchange (CEX), it takes a lot of time to attract investors and fetch liquidity.
Initial Liquidity Offerings (ILOs) can be easily conducted on DeFi Decentralized exchanges (DEX) like Uniswap as there are a huge number of interested investors who will purchase the crypto tokens instantly for a high price. These DEXes utilize the Automated Market Maker (AMM) mechanism, where liquidity pools are taken care of by highly skilled liquidity providers.
The top 3 DeFi decentralized exchanges ideal for conducting a successful Initial Liquidity Offering (ILO) are Uniswap ($7.61 billion of assets), Curve Finance ($7.61 billion of assets), and SushiSwap ($4.27 billion of assets). The fundraising campaigns can be easily organized on the Ethereum blockchain network.
What are the compelling reasons to go for an Initial Liquidity Offering (ILO)?
Entrepreneurs can easily earn a hefty profit by staking their capital on the DeFi-based Decentralized exchange. The liquidity contributors or providers will maintain a high level of efficiency as they will receive bonuses regularly in the form of yields.
The entire process of listing an ILO is affordable when compared to other alternatives like ICO’s, IEO’s, and IPO’s. The risks of an Initial Liquidity Offering are less as the token holders receive valuable stablecoins held securely in the liquidity pools.
Flexibility is ensured as new tokens can be instantly created and released in the market according to the extent of demand from investors.
How does an ILO function?
The entrepreneurs will announce – a public sale of tokens on a DeFi Decentralized exchange (DEX) like Balancer, Bancor, Curve Finance, IDEX, 1Inch Liquidity Protocol, Kyber, SushiSwap, and Uniswap.
Further details will be revealed to the investors – like the date and time of the Initial Liquidity Offering (ILO) on the online crypto exchange.
The investors will get to know – the hard cap and the soft cap target that the entrepreneurs want to achieve through their ILO.
The Initial Liquidity Offering will mostly be completed – after the entrepreneur reaches the hard cap target of his/her project.
The interested investors can participate – in an ILO by possessing minimum crypto holdings in a compatible digital wallet.
They can purchase valuable tokens – with the accepted cryptocurrencies by processing peer-to-peer transactions on the blockchain network.
The liquidity pools in the DeFi-based DEX – will allow the trading of crypto tokens after the initial deposit is made by investors.
The investors must be aware – that their liquidity might be locked for a certain period by the entrepreneur to facilitate the initial launch of the project in the market.
The liquidity will be increased – by the liquidity providers (LPs) by burning their tokens and exchanging them for a certain fee.
The liquidity providers – continuously watch the activities of investors and manage the trades on the Decentralized exchange regularly.
Get started with ILO development now to beat your competitors
What are the plethora of benefits offered by an Initial Liquidity Offering?
The fundraising targets like the hard cap (maximum amount) and soft cap (minimum amount) can be easily achieved by the entrepreneurs within just a few days. The investors in an Initial Liquidity Offering (ILO) will earn high returns if there is a rise in the price of the crypto tokens.
The prices of tokens are highly competitive as an Automated Market Maker (AMM) algorithm is used instead of a traditional order book that exists in risky Centralized exchanges.
An ICO and IEO require a lot of paperwork and adherence to different kinds of guidelines and rules imposed by the regulatory authorities. ILOs can be quickly launched in the market if they meet the requirements laid down by the DeFi-based Decentralized exchange.
The entrepreneurs get full freedom to end the fundraising campaign any time on the DEX. This is better when compared to an ICO where the centralized exchanges have full control over the trading of tokens and processing of transactions.
Popular ILO projects that were successful in the crypto market
It is a well-known decentralized project for promoting the advantages of artificial intelligence, deep learning, and machine learning. They listed their crypto tokens Ravencoin on the Binance Decentralized Exchange (DEX) in June 2019. The investors did spot trading on the Binance platform by exchanging Bitcoin (BTC) to purchase the Ravencoin tokens.
The project was further integrated with the new Binance Smart Chain (BSC). The Revencoin tokens were bought in exchange for gift cards by investors. The traders who possess the Binance Coin (BNB) exchanged it for Ravencoin through the Brave wallet. The Raven utility tokens will be used for training developers in Artificial Intelligence (AI).
The ILO of GLQ was conducted successfully on the Uniswap DeFi platform in March 2021. It was open to investors only for 2 days. The tokens were purchased by interested investors using Ether (ETH) cryptocurrency. The GraphLinq platform wants developers without coding knowledge to execute trades and transfer assets on blockchain networks with a mix of on-chain and off-chain activities.
Universal Market Access (UMA)
UMA permits DeFi developers to build valuable synthetic assets on the Ethereum blockchain network. It provides advantages like cost-efficient on-chain transactions, immutable smart contracts, and real-time tracking of the prices of tokens.
The Universal Market Access (UMA) project sold 2 million crypto tokens on the Uniswap DeFI platform in April 2020. It deposited a whopping $535,000 in ETH on a new liquidity pool. The token holder received benefits like automatic fulfilment of price requests through a powerful data verification mechanism (DVM) and governance rights.
Out of the total 100 million created tokens, 35 million were reserved for the DeFi developers, 48.5 million tokens were distributed to the early investors and founders of UMA, and 14.5 million tokens were allocated for future token sales in the market.
What is the typical process of Initial Liquidity Offering (ILO) development followed by AppDupe?
Our talented team has a one-on-one consultation session with the entrepreneurs to know their business requirements, fundraising targets, and objectives of their project.
We comply with all the regulations issued by the authorities and the guidelines of the DeFi-based Decentralized Exchange (DEX). We announce the date and time of the ILO publicly after the entrepreneur agrees to a public sale of the tokens. Our digital marketing team aggressively promotes the benefits of the fundraising campaign across the leading online crypto forums and social media networks.
Know Your Customer (KYC) and Anti-Money Laundering (AML) verification is done for all the registered investors to ensure a high level of safety and prevent frauds. The tokens are offered for sale to prospective investors who purchase them by transferring the required cryptocurrencies via peer-to-peer (P2P) transactions. The traders get permanent ownership of the tokens.
We constantly update the entrepreneur regarding the progress of the Initial Liquidity Offering (ILO). Once the hard cap of the project is achieved, we reach out to the entrepreneur and ask him/her if the ILO can be ended. If they agree, the token sale event is stopped and the fundraising campaign is completed successfully in the cryptocurrency market.
We also render round-the-clock technical support services to investors to handle any complaints and disputes faced during the ILO.
What are the future expectations from ILOs?
Billions of dollars of assets are getting locked in different DeFi decentralized exchanges like Curve Finance, Uniswap, and SushiSwap. It indicates an optimistic investor sentiment and a strong belief in the game-changing potential of Initial Liquidity Offerings (ILOs).
More entrepreneurs are jumping into the DeFi bandwagon to launch their own innovative projects. ILOs are a shortcut to raise a huge amount of funds in quick time without any restrictions.
The focus for the future should be on scalability in DeFi decentralized exchanges to handle a huge trading volume from investors and prevent unnecessary changes in the prices of crypto tokens. Centralized exchanges are still dominating the industry but DEXes are highly secure from hacking and phishing attacks due to the absence of intermediaries.
Entrepreneurs also have a lot of options in their hands as they can launch their ILO on 24 different Decentralized exchanges on the Ethereum blockchain network according to data provided by DeFi Pulse.
If regulatory authorities pass friendly guidelines and rules on conducting Initial Liquidity Offerings, it will boost its credibility and will become equal to the popular status of ICOs and IEOs in the market.
Why choose Appdupe’s high-end services for ILO development?
We have an immensely experienced blockchain and cryptocurrency development team updated with the latest changes in the DeFi and digital trading industry. Our ILO development services are highly customized to suit the entrepreneur’s business requirements.
We have a dedicated campaign management team who keep on informing the entrepreneurs about the status of the fundraising process. We can list ILOs on any of the popular Decentralized exchanges in the market to fulfil the enormous fundraising targets for aspiring entrepreneurs.
Initial Liquidity Offerings (ILOs) represent a democratic way for entrepreneurs to raise funds in the crypto market without any limitations. They can also compete with big projects by listing on famous Decentralized exchanges which have regular investor activity and a huge trading volume.
Hence, get ready for a fabulous future and reap rich rewards by partnering with AppDupe for innovative ILO development.
Make a massive impact in the market by kickstarting an Initial Liquidity Offering
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