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An ‘Initial Decentralised/DEX Offering’ (IDO) is a fundraising event for new DeFi projects, whereby the token issuer supplies liquidity to a DEX, allowing users to buy tokens with other cryptocurrencies. This process is typically facilitated by IDO launchpads which serve as intermediaries between projects and participants, providing a platform for early access at preferential rates.
While community members have the opportunity to participate in projects at a discounted rate, it can be challenging to know where to start or where to allocate their money. They may not have the necessary contacts to get into earlier rounds, nor the expertise to thoroughly vet launch projects. Often, they rely on recommendations from influencers, social media, or friends and family.
Launchpads solve this issue by serving as a repository for community members to evaluate projects, streamlining the research process and providing a reputable platform for project vetting. However, it's essential to trust the launchpad's process, as not all are equal in their evaluation rigour and transparency.
Common struggles observable in the DeFi space with regards to IDO launchpads include:
- Accurately accounting for demand: The amount of capital and potential participants available may be too much or too little in comparison to the actual market demand.
- Fairness: Token allocations may be distributed to a particular group of project participants disproportionately and/or at an advantageous stage of the IDO.
- Concentration of the allocation: A small number of whales and top stakeholders may take over the majority of allocation ‘tickets’.
- Minimal decent allocation size: The minimal decent allocation size may be too high to include the lowest tier of users.
- Lack of incentives: Without incentives for long-term holding, can encourage sell-offs instead of long-term holding.
- Insufficient liquidity: Without sufficient depth for new projects, their token may experience excessive volatility and difficulties in monetizing ROI.
- Weak business strategy: Poor deal flows, branding, and focus on short-term gains at the expense of solid products and support communities.
- Subpar user experience (UX and UI): Lack of an intuitive and consistent UI for IDO participation and organisation makes participation difficult diminishes the overall user-experience.
At Eclipse Fi, after observing various methods of organising IDO launchpads, we aim to simplify the process and make it viable for our users. We've decided to combine two approaches: guaranteed allocation and a lottery-based distribution system. This approach balances a fair opportunity for access to IDO fundraise without relying solely on luck.