Crypto Academy / Season 3 / Week 5- Homework Post for Professor@ wahyunahrul - Topic: Initial Dex Offering (IDO)

block.kids (60)in SteemitCryptoAcademy • 3 years ago

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Hello, steem people!

Fundraising is a very significant obstacle that needs to be overcome by cryptocurrency developers. The developers' need has led to several bright initiatives, including initial coin offerings (ICOs), security token offerings (STOs), initial exchange offerings (IEOs) and now the IDO.
However, concerning this week's lecture, whose topic is "Initial Dex Offering (IDO)," I will focus solely on bringing to light the excellent concept of the IDO.

Note: This homework post will revolve within the borders of the questions asked at the end of the lecture mentioned above and strictly adhere to the rules and guidelines stated.

Before I start, I will love to reveal how glad I am to be part of this week's activities at the crypto academy.

Question 1: Explain in your personal opinion whether IDO should be done on cryptocurrency

_{source : Pixabay}

New cryptocurrency developers find it hard to break into the cryptocurrency market. This drawback is due to a lack of fame among viable investors and insufficient funds backing the newly developed coin or token.
The introduction of IDOs in the crypto space has simultaneously solved both problems of fame and funding. In addition to IDO being a permissionless and decentralized crowdfunding platform, traders can easily swap tokens on the exchange where the IDO project is launched.

In my own opinion, IDO can be regarded as the next level among all crypto fundraising models, including initial coin offerings (ICOs), security token offerings (STOs), and initial exchange offerings (IEOs).

Why do I have such an opinion? I do have such an opinion simply because IDOs offer the best liquidity rates and juicy offers at every price level making. This reason makes IDOs the perfect platform for startups and new projects that want to gain access immediately to funds as soon as the newly developed token is launched.
Besides, most pro coiners associate IDOs with a high degree of equity and fairness. It also discouraged pre-mining, which I always advantageous to the developer rather than the crypto community.

Question 2: Can IDO have a significant impact on the cryptocurrency world?

_{source : pixabay}

My answer to this question is, without a doubt, Yes!

For over four years now, the sales of tokens to the public had slowly evolved, introducing us to several crypto fundraising methods such as Security Token Offerings (STOs), Initial Coin Offerings (ICOs), the Initial Exchange Offerings (IEOs), and finally the IDOs.

I believe that IDOs will significantly impact the cryptocurrency world because, among the crowd fundraising methods listed above, IDO is the only decentralized method.
Besides, unlike the ICOs and IEOs, IDOs do not need participants to pay exchange fees, offer immediate liquidity and access to trading funds.

In addition to IDOs unique features listed above, IDOs can also be supported by various wallets, which are very secure.
However, IDOs impact on the cryptocurrency world may be short-lived if drawbacks like the lack of adequate awareness or ill-education of crypto investors on the efficiency of IDOs and DeFi.

Question 3: Explain one example of a token that has been IDO but failed/rug pull.

POLS, the Polkastarter native coin, is an example of a rug-pulled coin after launching on an IDO. It is a cross-chain token pool and an auction protocol. polkastarter was built on the Polkadot (DOT) blockchain. The site usually crashes in 1 second because it was being exposed to the public before launching its set date(April 2021).

This costly mistake allowed scammers to hijack and create a fake token which many people lost substantial funds purchasing. Although the whitelist is now opened, POLS has dumped 14% to a value of about $2.85, according to CoinGecko.

Despite being a requirement for many new token offerings on the DEX, it has constantly suffered a downtrend from its highest ever value of $7.50. POLS chart is shown in the screenshot below.

_{source : Tradingview}

Question 4. Make a detailed fundamental analysis of 2 tokens that have done IDO, and compare the two tokens. Then give your opinion on the results of your analysis.

In this section, I will analyze and compare two tokens that have both been launched on IDO platforms. I have selected two well-known tokens, namely;

Universal Market Access Protocol

The Raven protocol

Universal Market Access Protocol

_{source : Screenshot from Coinmarketcap}

The Universal Market Access Protocol has a token called the UMA token. UMA token had its IDO launched on the Uniswap platform. The UMA protocol allows DeFi developers to produce tokens on the Ethereum network that can track the price of assets. The screenshot above shows that as of the time of this post the UMA token was ranked at #104 with a price of $9.16.

The UMA protocol is used in two different ways;

The priceless financial contract: Here, DeFi developers can develop tokens that can benefit without any on-chain price feed. An example of this is Ethereum (ERC-20)

UMA Oracle Design: The UMA Oracle is used in reporting all off-chain data to the Ethereum network.
However, the principal purpose of the UMA protocol is to connect traditional financial traders with the benefits from technology and the developers of DeFi.

The Raven Protocol

_{source : Screenshot from Coinmarketcap}

The Raven protocol is the very first IDO project launched on Binance DEX in 2019. This protocol is a deep learning protocol that aims to develop cost-efficient and quicker methods to support the learning and training of artificial intelligence and machines. The screenshot above shows that as of the time of this post the Raven token was ranked at #1173 with a price of $0.0008348.

The Raven protocol also has a native token used to transact in the Raven community, such as rewarding and making Artificial Intelligence and machine training payments.
The Raven protocol also believes that training AI should not require a third party(centralized) but should be decentralized. However, there is a hint of control(centralization) within the Raven community.

These two tokens are compared below

UMA token developed a pair with Ethereum while the Raven token developed a pair with BNB (Binance token)

Before the IDO launch,2% of the UMA token was allocated for an implied market cap of $26.67m, while Over $500,000 worth of raven was bought in less than a second after the IDO was launched

UMA token liquidity rate was a gradual process, while the Raven token liquidity rate was exponentially fast.

UMA protocol can be found on Uniswap, while Raven protocol can be found on Binance.

UMA protocol is decentralized, while Raven protocol has some hint of control within its working system.

The UMA protocol is targeted at the trading community, while the Raven protocol is targeted at the AIs developers community.

In my own opinion, both the UMA protocol and Raven Protocol each have their significance in the cryptocurrency sector and the world at large. However, I compliment the liquidity of the Raven protocol although, it is centralized to an extent.
On the other hand, I compliment the total decentralized nature of the UMA protocol. But if I was to participate in any of the protocols as mentioned earlier. It will be the Raven protocol because I have a thing for Artificial intelligence.

Question 5: Look for one token that is currently IDO and explain the steps to be able to participate in the IDO.

Fanadise project is conducting its IDO with Poolz's new risk-free IDO model in place. Via this platform, investors will be able to claim a complete refund of their investment within 24-hours of listing the $FAN token.
Poolz is a cross-chain IDO platform that depends on a whitelisting process to ensure all investors get a fair opportunity to invest in the IDOs.

To be eligible for whitelisting for the $FAN IDO on Poolz, some steps have to be followed;

Step 1: Acquire and stake POOLZ tokens on the staking page or hold POOLZ in your wallet.

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_{source : Screenshot from Coinmarketcap}

The screenshot above shows that as of the time of this post the POOLZ token was ranked at #1165 with a price of $2.39.

Step 2: Visit the app. poolz.finance website