An IDO (Initial DEX Offering) is a type of fundraising event in which a new cryptocurrency project launches its token sale on a decentralized exchange, or DEX.

From Centralized to Decentralized Crowdfunding

An IDO can be seen as an evolution of earlier fundraising models like the Initial Coin Offering (ICO) and Initial Exchange Offering (IEO). While ICOs were direct, often unregulated sales and IEOs relied on a centralized exchange, the IDO model uses a decentralized and permissionless approach.

Projects that launch an IDO create a liquidity-pool on a DEX, allowing investors to buy the new asset directly from their own wallet. This process removes the need for a trusted intermediary, as the sale is executed automatically by a smart-contract on the blockchain. This provides a more fair and transparent process, with immediate liquidity and trading after the sale is complete.

How to Participate

To participate in an IDO, a user must have a compatible wallet and enough cryptocurrency to make the purchase. Unlike IEOs, which often require users to have an account on a CEX and complete a KYC process, IDOs are open to anyone who has a wallet. This aligns with the core principles of decentralization.

Why It Matters

The IDO model has become a popular way for new projects to raise funds in a way that is more aligned with the ethos of Web3. It offers a more transparent and permissionless way to participate in early-stage projects. However, the lack of centralized vetting means that investors must do their own thorough research to avoid scams and high-risk projects.