How Are Crypto Projects Financed?

How Are Crypto Projects Financed?

By MakeItReal | MakeItReal | 31 Oct 2022


Hello HODLers!

We know, to make money with cryptocurrencies, one of the best ways is to start a new project. Whether it is a shitcoin, a utility token or even a layer 1 blockchain, a fundamental step in the life cycle of a project developed on blockchain is that of fundraising, or initial financing. In the cryptocurrency sector it is possible to find financing easily and quickly through a variety of fundraising models. Today I want to share with you the main categories of financing that a startup that adopts a business model based on the Web3 or more simply developed on a blockchain can use.

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ICO: Initial Coin Offering.
The project is financed by selling “quotas” of the new reality to lenders at a fixed price. This form is falling into disuse because there are no intermediaries and guarantees for those who invest.

IDO and IEO: Initial Dex Offering and Initial Exchange Offering.
The project is financed by blocking the token required by the event in a liquidity pool for a certain period. The funds will be blocked for a certain period until the token is listed, which will coincide with the consequent receipt of the tokens of the project in which you have chosen to participate. IEO and IDO are similar but in IEOs it is a Centralized Exchange (e.g. Binance) that organizes the presale and lists the token, in IDOs it is a decentralized exchange (e.g. Pancakeswap). Launchpad and Launchpool are a sub-category of IDOs.

ISO: Initial Staking Offering.
It consists of delegating the token required by the on-chain presale event to a validator node. At the end of the staking period and near the listing, both the committed tokens and the tokens of the financed project are received back.

IGO: Initial Game Offering.
Participants exchange quantities of tokens required by the presale event in exchange for NFT or tokens of a project that involves the development of a dapp play to earn. In addition to being sold, both tokens and Nft can be used within the platform to "play" and earn further.

🔧 The pre-sale are united by an initial fundraising period, a generation or distribution event of the TGE token based on the requested sale price and finally the listing of the new token. New projects often require a vesting period that discourages speculators. Not all pre-theaters are successful but many of them allow discrete multiplication of the invested capital.

 

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Thanks,
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MakeItReal

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