Enjinstarter: A Beginner’s Guide to IDOs

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In 2021, the gaming industry was evaluated at $198.40 billion and is expected to reach $339.95 billion by 2027. We at EnjinStarter believe that although gaming is a large market and will continue to grow, especially on the blockchain, the entertainment industry: movies, TV, music, etc. are bigger by magnitude, closing in on a whopping $2.3 billion as of 2022. This has the potential to grow even further, hence our partnerships with multiple gaming projects and music, movie, and other entertainment-based blockchain projects.

On the EnjinStarter launchpad, you can find dozens of these projects, each different from the last. All of our launchpad projects go through a thorough vetting process to ensure that our users get the best possible gaming and entertainment experience and help our token holders increase their confidence in the quality of the EnjinStarter platform. These projects often hold an IDO after a specific time, aiming to obtain funds for further development.

But what is an IDO?

An Initial Dex Offering (IDO) is a novel way of launching crypto tokens, becoming the latest craze in the crypto space. IDOs function similarly to an initial public offering (IPO), but instead of being for a specific company, they are for a specific crypto project, occurring on a launchpad or decentralized exchange. Via these videos, investors are offered a way to get in on the ground floor before it goes mainstream.

The first such kind of fundraising activities (ICOs — Initial Coin Offering, at the time) were for cryptocurrencies, like Ethereum, in 2014. Since then, hundreds of crypto projects have launched their IDOs to allow investors to get involved before they experience large scale public adoption. Investors can purchase newly-issued tokens from the project team on launchpads like EnjinStarter. These tokens often have a lower market cap and price than existing coins, making them, at least in theory, an investment opportunity with higher gains.

IDOs, ICOs, and IEOs

We’ve seen what IDOs are above, but what are ICOs and IEOs, and how do they differ from IDOs? To begin with, ICOs are Initial Coin Offerings and were the first generation of blockchain-based fundraising. ICOs are highly centralized, with next to no community-involved consensus protocols. These have no oversight from launchpads, nor can they be held accountable to their community or investors. This caused many rug pulls and scams during their heyday and was one of the major factors in crypto’s negative public image.

On the other hand, IEOs (or Initial Exchange Offerings) are the next stage in decentralized fundraising. IEOs improve upon the old ICO model by adding steps such as community/investor accountability, consumer regulations, KYC protocols, and more. There are many benefits of an IEO, such as ease of access via listed exchanges, audits, open technical analyses, and more. Despite these positives, there are still some issues with hosting an IEO, such as a high entry barrier, which locks out investors with low-risk tolerances, smaller portfolios, and people with lower disposable income.

IDOs are the latest evolution in this series, giving small investors access to projects they would otherwise be priced out of. Using the IDO model, blockchain projects can pay reduced listing fees and are ready to launch on a DEX at a moment’s notice.

Advantages of IDOs

IDOs have become the de facto standard for raising capital on the blockchain due to their lack of time-consuming vetting processes and the like. Crowdsourcing capital is now only dependent on the project’s utility and the quality of marketing done by the team. Since there are no restrictions on projects launching IDOs, they can list their tokens on exchanges quicker than ICOs or IEOs, and even cash out their initial investments faster than ICOs.

As IDOs exist on the blockchain, all transactions are visible to the public on the projects’ exchanges, enabling complete transparency and aiding potential investors to examine the market sentiments around the project. IDOs also often start staking pools for their tokens to encourage holding, and these pools gain access to liquidity as soon as the first investments are made in the token’s IDO.

Investing in an IDO on EnjinStarter

Now that we know what an IDO is and its advantages over ICOs, we will learn how to invest in IDOs.

To invest in IDOs on the EnjinStarter Launchpad:

  • The first step you need to take involves verifying your wallet KYC on Blockpass, which takes 24 to 48 hours.
  • Upon being accepted, the EnjinStarter team will email you with a confirmation.
  • With your newly created EnjinStarter account, you can now buy EnjinStarter’s native EJS token. Buying this token is necessary if you’d like to invest in IDOs in the future.

After you finish your purchase of the EJS token, stake or farm it to qualify for participating in EnjinStarter’s IDOs. Keep in mind that at least 1,250 EJS needs to be staked before you’re eligible for IDO involvements. Some upcoming projects on EnjinStarter, such as CrypCade, Metafighter, Reign of Terror, and others, are some promising projects currently waiting on their IDOs.

Conclusion

The above article shows what IDOs are, how they work, and what makes them so attractive for newer blockchain projects. Check out EnjinStarter for some great examples of upcoming IDOs.

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