The Evolution of Crypto Fundraising: IDO as an Alternative?

IDO (Initial Dex Offering) is a new crowdfunding model in the crypto market that became quite popular in early 2021 amid growing interest in DeFi. Therefore, it’s time to tell how this works, how it differs from both ICO and IEO. It is also worth pointing out the pros and cons of IDO, as well as evaluating the possibilities of the new crowdsale method.PrehistoryThe first ICO (Initial Coin Offering) was held by the Mastercoin protocol in 2013. In 2017–2018, the popularity of ICOs was high — in 2017, projects raised $5.6 billion, and in the first quarter of 2018 — $3.3 billion. Under the ICO model, anyone could start selling their tokens to everyone. At the same time, the token issuer does not need to disclose his identification data, nor present the MVP, nor confirm qualifications, nor in any other way, prove that issuer is a reliable developer, and his project is a profitable investment. It was enough just to create a smart contract to sell your tokens for bitcoins or ether. Such easy access to investments attracted interest and money to the ICO market, but at the same time, the lack of any control and requirements also became the main reason for the increase in the number of scammers. So, according to a study by Satis Group LLC, in 2018, more than 80% of all token sales in the ICO market were scams. When investors realized this problem, they began to involve regulators and sue token sellers and even those who advertised these projects as well.By the end of 2018, the ICO had exhausted, so crypto exchanges offered an alternative to ICO — Initial Exchange Offering (IEO). In 2019, IEOs were replaced by IDOs: in June 2019, the Raven Protocol project placed tokens on Binance DEX. What are the…