IDOs: Are They Worthy Of The Risk?

The crypto market is filled with a lot of opportunities, you just have to find your way around it, information is power, when you find the right information, you will make enough money in this crypto space. But its considered a right information after it makes you money, you have to see it as a huge risk before investing. IDO means initial Dexscreener offering, its a way for crypto projects to raise fundings before launch. The pros and cons of IDOs are important to note. projects arrange an IDO at a certain price, participants will pledge the required amount for the IDOs to be able to have these tokens before launch. For instance a project might organise an IDO to raise about $17 million funding listing the token price at $0.1. this means that if you buying the IDO at that price you will be getting 1000 token quantity before launch.

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The pro of participating in an IDO is that you get an early access to the token or rather be an early investor, its a risk, but it puts you one step ahead others before launch. If you purchase a token at $0.1 during IDO and have 1,000 token quantities, if the token launched at $1 per token, you will have $1,000. That is extra $900 profit for participating in the IDO. Although some IDOs do something we call vesting. Vesting is locking and withholding your token for a specific amount of time. Some IDO vesting goes like this, 20% gets unlocked on TGE(Token Generation Event), which is the launch date, the rest will be unlocked within 6 months. The reason some of the IDO vesting allows this kind of distribution is to control dumping by these IDO participants. This will control the selling pressure, but most times this doesn’t control dumping pressure, people will still dump the token. The con of IDO is that, it is risky, you might buy a token at an IDO price before launch, and the token might launch below IDO price, putting you at loss, now you have to wait to breakeven before deciding if you want to keep holding or sell off. I once bought a token at $0.3 IDO price, and the token launched at $0.15, I held and waited but unfortunately the token kept dipping and dipped to $0.04, that was a bad IDO experience.

They are risky, it depends on you to take them or not.

Posted Using InLeo Alpha