An initial DEX offering or IDO is an innovative decentralized and permissionless crowdfunding platform revolutionizing the cryptocurrency world.

When a project launches an IDO, it indicates it's launching a coin or token through a decentralized liquidity exchange. The cryptocurrency asset exchange uses liquidity pools to allow traders to trade tokens such as stablecoins and cryptocurrencies. An excellent example of liquidity paid is USDT/ETH.

On the other hand, the ICO or initial coin offering was the first method of crypto funding. In 2017, it created controversy in the crypto space.

What is an ICO?

An initial coin offering (ICO) is a way of raising funds from individual investors which are not regulated by any authority. The lack of control and investor protections were the two most significant issues with ICOs. Project teams were not subjected to due diligence because there were no control measures.

Almost any ICO project could guarantee significant returns, and many did. Several initial coin offering (ICO) ideas turned out to be either hasty money grabs or outright scams. They also tarnished the cryptocurrency business, discouraging many new investors from jumping on board.

An initial DEX offering (IDO) is fundraising where investors invest their money. To overcome the flaws in the conventional ICO, the IDO is introduced to the crowdfunding paradigm. DEXs can be regarded as decentralized liquidity exchanges because they work with an IDO rather than a centralized exchange.

IDOs are the most recent approach for crypto companies seeking funding from investors. However, they are not without flaws. DEXs, for example, are less scalable.

With this decentralized fundraising strategy, IDOs aim to address the flaws of ICOs while also expanding the crypto market's possibilities. Entrepreneurs can create a blockchain product immune to malevolent third-party influencers and hackers, and human mistakes by crowdfunding with IDOs. Moreover, tokens are instantly secured in the investor's wallet with their private keys.

How does IDO work?

IDOs function as DEXs and can give immediate token liquidity. These liquidity pool providers are repeatedly rewarded fees by DEXs. Due to these liquidity pool providers, DEXs can run without 

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Written By: Shubhada Pande