What are IDOs and ICOs? Here’s the answer

Most of us may still be unfamiliar with the terms ICO (Initial Coin Offering) and IDO (Initial Dex Offering). ICO is a place to raise funds through offering a new type of coin or a new cryptocurrency service.

While IDO is a fundraising process carried out to get early access to crypto tokens before the token is listed on the market. Usually this IDO is carried out by a Lauchpad, which is a special place where investors can get these tokens before listing.

How Initial Coin Offerings Work

Companies conducting ICOs will raise funds by selling cryptocurrencies in the form of tokens. When making a sale, the company has previously made a WhitePaper or Proposal that explains in full about their project.

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The contents of the WhitePaper usually cover matters regarding:

  • What project to make
  • How to make that project
  • The main objective of the project
  • Team composition within the company
  • Required funds
  • Etc,

In short, the white paper is a complete description of future product development plans.
However, the risk of loss in participating in the Initial Coin Offering is quite high. ICO participants are usually those who already know the pros and cons of investing in new coins.

Tips to Avoid ICO Losses

1. Find the Latest Information About Cryptocurrency

If you want to buy an ICO, then the first thing you should do is familiarize yourself with cryptocurrencies more broadly. In most cases, investors have to buy tokens with cryptocurrencies that are already available, such as bitcoin or ethereum.

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2. There Is No Authority Governing ICO In General

There is no single regulation that regulates ICO, so it will be very prone to fraud. Investors are expected to always be vigilant because several initial coin offerings or crowdsale campaigns are actually very fraudulent. For this reason, it is very important to take various precautions for all things that might happen.

Initial Dex Offering

Many think that IDOs are safer than ICOs, because Lauchpad is the one doing the fundraising. So if something happens that we don’t want, Lauchpad can return investor funds to all investors.

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Advantages of IDOs

Investors can get the lowest possible price before the token is listed on the market.

Safer than ICO

Return on capital faster than trading as usual

Lack of IDOs

To take part in a new IDO, investors are usually required to stake related Lauchpad tokens to get a new token allocation.

Conclusion

Both ICO and IDO have their own advantages and disadvantages. All decisions to participate in ICO or IDO are in your own hands as investors.

Before making the decision to take part in ICO and IDO, it is hoped that you will have to do a more in-depth reset about the crypto project that you are going to invest in.

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