Launching a token for a project is a difficult task that requires many moving parts along with precision and fundraising. Getting a centralized exchange to list a project token used to be troublesome and contained many issues. Fortunately, despite the current challenges, things have changed and there are more straightforward ways to launch a token. One of the best options for projects to launch a token is through a DEX via an Initial Decentralized Offering or IDO for short.
Here is a complete guide for setting up a token for an IDO. In this guide, we will cover a comprehensive look at what an IDO is, the advantages and benefits, and looking at the added benefits of using an IDO launchpad. In addition to looking at IDO-focused benefits, we will also show a complete mini-guide on all the steps a project can take to create a token and launch its IDO through a DEX or launchpad.
And also how ScaleSwap can genuinely help a project get to its IDO status.
This will serve as a complete look and everything you need to create an IDO for a project and token.
What Is An IDO?
One of the most fundamental components of a token and a token launch is an Initial DEX Offering, also known as an IDO. An IDO is an event that consists of a token being launched on a decentralized exchange. This event is a process that results when an early-stage cryptocurrency project desires to make its token available to the public in order to generate token equity for its future progress. IDOs are typically the first chance for a crypto enthusiast or bystander to take part in a project, oftentimes at a lower value than at public listing or subsequent offerings in the future.
An IDO is the first real chance at showing the public world what they have to offer and how investors can make a call to action as a result.
IDOs are of the same ancestry as ICOs in the years past which eventually changed as the blockchain ecosystem progressed. These ICOs, known as Initial Coin Offerings, were usually contractual agreements that projects were made with centralized exchanges to list their coin and make them available to the public. Eventually, ICOs became lackluster because of a myriad of reasons including regulations, backhanded deals, and favoritism, combined with the innovation of decentralized exchanges (DEX) which made IDOs much more popular.
The Advantages of an IDO
There are many district advantages to using an IDO. These benefits have radically changed public offerings. Generally speaking, IDOs have taken over as one of the most popular methods of launching a token and this process does not seem to be slowing down. Today, almost every chain that can create smart contacts has a DEX launchpad and can host IDOs as a result.
Here are four different ways that IDOs offer benefits to all parties involved:
- Instant Liquidity: an IDO typically offers instantaneous liquidity as a result of being made available for a public offering. Projects offer a significant pool of their tokens to an IDO launchpad which creates liquidity so that users can buy and sell without impacting the price as much as they could have in other methods. Liquidity is essential for the long-term health of a token and for investors to obtain a reasonable value.
- Fewer Fees: IDOs can typically result in lower fees because they are more accessible and thus removes barriers to entry like contractual agreements or special rules. Usually, IDOs have only small transaction fees to use the network itself and most IDO events do not charge anything to have access to offerings.
- Investor Fairness: when tokens launch with IDOs, this typically creates more fairness for the average investor because they get a price that’s very close to or exactly as intended. Projects are usually vocal about the price that the token will be at the time of sale. As a result of this being the first public-facing offering, it will be the true price that was intended. In addition, tokens are available equally from person to person, so this helps prevent favoritism or blacklists that shut out users from accessing tokens at the allocated price.
- Easier and Faster to Launch: the process and activation of launching a token via an IDO are extremely fast and easy. Usually, this involves as little as granting liquidity for the project and making the contracts available. There is very little overhead to make IDOs available to the public. There are also fewer restrictions because central exchanges are not involved in the process.
Overall, an IDO has the ability to be faster, easier, fairer, and less costly compared to alternatives currently on the market.
What Benefits Does An IDO Launchpad Bring?
IDO launchpads are platforms that offer projects to launch tokens via smart contracts from a decentralized site. Launchpads offer a way for tokens to become visible to the public and facilitate the means for an IDO to be offered. Generally speaking, a project will turn to an IDO launchpad toward the end of the token equity step.
There are many benefits to using an IDO launchpad. An IDO launchpad primarily helps projects by giving a large availability and voice for funders to find them – creating a fantastic way to bootstrap community growth. Most launchpads already have a network of funding parties and other companies to connect projects with them, creating an exponential reach for an IDO to be successful. Additionally, although launchpads are decentralized, launchpads also get another set of eyes on the process to make sure everything runs smoothly. Most launchpads already have a system in place and can generate a clean process that a project might not otherwise understand.
Steps For Launching An IDO
IDOs are great and serve many benefits but also come with many steps in order to accomplish them correctly. For investors, the IDO process is very simple and they connect to an IDO launchpad to interact with their investment of choice. On the inside, although it is much easier than before, every step must be managed properly. Also for most projects, this is the first time that the majority of the team has participated in an IDO.
Here is a fundamental and comprehensive list of how to set up an IDO from start to finish:
Step 1: Business Strategy
All crypto projects start with an idea and someone to jumpstart that idea into a vision. Most projects want to eventually launch and make their tokens available but the first thing that’s needed is to create a business strategy. This will consist of many questions about how the business will work on the inside in addition to how it can serve the specific needs of what they are trying to solve. Launching an IDO means establishing a real token to create token equity in the project and thus should garner some utility.
- How will the business run?
- What is the purpose of the token that you are trying to offer?
- Can your project run without a token at all?
- In what ways does your business offer something that others don’t?
Creating a business strategy to answer these questions is important.
Step 2: Create an IDO Marketing Plan
The second thing that a project should do is create a full-fledged marketing plan. While a business strategy focuses on the inner workings of a project and gives resources to share with investors and launchpads, a marketing plan is the outward expression of this business strategy. A marketing plan helps to get the word out in the most efficient way possible and makes a project visible to as many as possible. Here are some of the steps needed to create a comprehensive plan:
- Build A Website: a token project must have a website to serve as a means to showcase what they are and what they offer. This is the best chance to show investors what a project is and on home territory. In addition, a website will serve as a place investors can go and learn more or keep updated on the IDO launch and/or future updates after the launch.
- Create Tokenomics: after a website is built, it’s important to create a tokenomics list of what the token will do and how it will be distributed. For the distribution, a project should explain all the token sale rounds including the investors round, the pre-sale, the first public offering, and any additional offerings and the prices for all of them. In addition, the percentage of available supply should be listed along with the total supply for the whole project (even if some of it will not be available).
- Select a Trusted Decentralized Exchange (DEX) For Listing: after you have created a website and tokenomics (along with your business plan), it is time to start shopping for a trusted DEX that you want to list your token on. Typically, this can be boiled down to 1-3 of the most popular DEXs on the network you are located on. It’s important that in addition to finding one you can trust that you also find one that has a proven track record. Look for previous projects within your space and see how they performed to make sure they are beneficial for the project.
- Community Engagement: after a DEX is selected, it’s time to take the marketing outward and engage with the community in all of the publicly available details at this point. Let your community know that the project is listed on the DEX you have chosen, with available dates when they become known, in addition to any other details that can help encourage traffic for the IDO. This will include but is not limited to social media including Twitter, Telegram, and Discord.
- PR Marketing: after the community has heard about the listing and it is prepped for the upcoming launch, it’s a good idea to start doing some PR work and get the word out to those that haven’t heard of the project yet. This is where a project will reach out to media listings, create blogs that can be distributed, talk to influencers and key opinion leaders (KOLs), and other sources that can add to their reach.
- Additional areas to address before the IDO:
- Social media/community development strategy
- Cap table strategy
- Operation and HR
- Technical & security advisory
- Roadmap planning
Step 3: Fundraising
After everything has been finished, it is now time to start the process of raising capital. This is where a project will start making deals on their private rounds and any investors that have aided them up until now. Once this is completed, you can work down the line and get ready for the IDO launch. It is crucial to raise funds so that equity can be generated for the future.
Step 4: Choose an IDO Launchpad
By the time you have made it to this step, a solid business strategy should be in place along with a robust website, socials, marketing plan, and public relations built up. Once all these things have been completed, it’s finally time to talk to a DEX launchpad to help begin the actual IDO process. There are plenty of launchpads available. It’s important to find the right ones that have a good interest in your project. A general rule of thumb is to find one that gives a fair launch for projects and investors alike.
Step 5: Create Your Token
After everything is set up with a DEX and launchpad, you can begin to mint the cryptocurrency for your token equity if you have not already. Refer to your token economics as a guide to make sure creating the cryptocurrency goes as originally planned and to establish what you have set out for the investors, the private round, and the price of the first public offering. It is important that experienced developers are used for creating the token and that everything is done carefully.
What If A Project Isn’t Quite Ready For An IDO Launch?
How do you know if a project is ready for launch and what if they are not ready to create an IDO? A project will not be ready unless it establishes most of the above and has a firm grasp on what they are doing. Simple as that. It will not serve the company or the investors well if a project is incomplete or cannot offer what’s relative to its mission and vision.
If a project is not ready for launch, the best thing is to start the IDO table list from the beginning and use it as a checklist to see if everything is completed.
Some of the questions a project might ask itself if it is ready for launch and relative to the list above:
- Do we have a functioning website with all the available information and calls to action for what the project is, what the token will do, and a call to action that the community can take part in?
- Has the project created plans and solutions for the future to talk to both businesses and investors? Do they have a business and marketing plan?
- Has the project reached out to a DEX and the community for engagement?
- Does the project have the PR ready to go or is comfortable with the type of outbound marketing they currently have to help make their project known?
- Do I need some outside help?
If any of these questions cannot be answered, they must be solved before a launch is started. A few of these are not absolute requirements for launch but an IDO will be hindered greatly without them and an IDO launchpad may not even accept a project if they are not at least attempted.
Scaleswap is Here to Help!
Launching an IDO is exciting and represents a great time for a project where they can first make their brand and business known to the world. Making sure a project understands the process and how to establish a plan for an IDO makes the biggest difference between success and failure.
You only have one chance to launch your million-dollar idea and it’s important that you have all the tools and resources necessary to get it done correctly!
One of the best ways a project can fast-track success is by having a launchpad like ScaleSwap to guide them in the process. ScaleSwap specializes in customized advisory, acceleration, and incubation services to ensure that every project we work with is on the path to success.
Get in touch with us today to learn more about the benefits of launching on Scaleswap and how we can help you lead your team through a successful IDO launch!