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Hello everyone, how are you doing, I hope everyone is doing great, I welcome you to week 5 of the engagement challenge, and here I shall be participating in the contest discussion of ICO, also known as Initial Coin Offering.

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Share in detail your understanding of the Initial Coin Offering (ICO) and the purpose of the event in the crypto ecosystem.

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Many project ideas have come to light ever since the evolution of cryptocurrency, we can take ICO as a form of auctioning whereby people bid at a particular price before the particular asset is released to the public, this was seen in the common world, and the adoption of this in the cryptocurrency ecosystem is what we have known as the Initial Coin Offering.

ICO is a business intervention for a particular project to raise enough funds for the development of a project, whereby this is a call for investors, and these investors are the earlier major holder of the coin before its released to the public, this does raise enough awareness and create a solid plan for the project before its exposure to the public.

The initial coin offering has been a great success in the past, we have seen a lot of project yield positive after this intervention, there are early investors in the project, and it's also one of the methods of earning huge profits on crypto investment, some coin has done 10X after there launching, whereby enriching the early investors pocket, this is also one of the best ways of participating in cryptocurrency investment.

Purpose Of ICO:

The purpose of this event in the crypto ecosystem is to create awareness for the project, get enough investment and make it a win-win situation for the early holders and founders, when a project launches its coin through ICO, they tend to have come prepared with enough funding for the project planning, and this is more of a safeguard for the project purpose, as it strengthens and builds up more confidence for the founders.

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Discuss your understanding of the Initial Exchange Offering (IEO) and Initial DEX Offering (IDO). What platform is utilized for IEO? Give an example of a platform and how it works for the coin offering.

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Intitial Coin Offering(IEO)

An initial Exchange Offering is the modified version of the Initial Coin Offering, the only difference is that this is done differently, and it's done on a Centralized exchange instead, the example of a centralized exchange this is done is the case of the Binance Launch Pad.

These are the coin that is listed on the launch pad before their exposure in the market or trading platform, but instead, they are listed on the centralized exchange, and users can easily get these coins from the exchange rate rather than going forward to the Project itself.

For the case of the Binance launchpad, Binance users can get the coin ahead by using the BNB swap rate, then, in this case, users get to swap the token to the value of the coin offering before it came to the market, and the exchange has the control power over this as well, IEO is more trustworthy, as users believe they have been scrutinized and well analyzed before they get listed to the exchange, whereby vetting more confidence to the investors who plan on Holding and investing sooner.

Intial DEX Offering(IDX)

This is likely the version of IEO as well, just the difference is that this is done on a decentralized exchange rather, as we know that decentralized exchange has no power over users' funds, and there is the full power of control of funds on users' assets.

The DEX exchange offers the listing of the ICO on their liquidy pools, whereby users all over can swap the coin from the exchange liquidity to their usage, there is more security on this as well, as the exchange scrutinizes this coin before considering adding it to their pool.

An example of a platform and how it works for the coin offering

The Example of an IEO platform I will be giving is the Binance launch pad, which is accessed on the Binance network and its usage, the launch pad is a segmented part of the website where users can view recently listed IEO, then users have access to the whitepaper, and can then decide their decision whether to invest in the coin or not.

To access the Launchpad, users log onto their binance account, then click on the dropdown arrow to select the Launchpad.

Then getting to the launchpad, you can see the record's activity as there are $2.9B assets locked, and over 3 million users have participated in the offering as well, here we can then see the active project that is up for bidding as well.

The current launch pool on the Binance launchpad is the HFT project, and to participate in this, users need to stake BUSD or BNB to participate in the staking of the project before it goes live.

We can see the farming period and also the total BUSD staked so far, for users to participate in this, they have to transfer some amount of BUSD to their Launchpad, and can then Swap to participate In the staking.

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Have you participated in ICO/IEO/IDO before? If yes, what's your experience? Discuss a project that has performed a successful ICO before and the result of the event

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No, I am yet to participate in any ICO/IEO before, but there are some of these projects that have yielded a positive response, there was the case of Anchor protocol where the coin made a positive impact in the market immediately after the ICO ended.

The Anchor protocol ended its launchpad on Feb 25, 2022, and we could see a movement in the price of ANC during this moment, before the Launchpad, the coin was trending at the price of $1.4, then immediately after the launchpad ended the coin was trending at $6, this proves a great success in the launchpad and a great motive of investing as well.

The Anchor protocol token maintains the uptrend price for a while, which I believe is enough motive for investors to have made a profit during the time, and we could see that project as such has had great success from IEO.

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What are the merits and demerits of Initial Coin Offering?

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Ever since the introduction of ICO on some notable exchanges, there has been some history of positive outcomes for a while, and as well there have been some that negatively impacted the channel.

Merits of ICO

Yield Positive Returns - ICO has been great and is also known as another mode for investment purposes, users with assets have contributed to the success of building this project and afterward they recoup a nice return from the project, investors are given some amount of the coin back as a return.

Project Build up - One of the reasons most projects went through ICO is to get enough funds to build the project up, and much more relatable for their users, when this is done e, the project tends to be more unique and more capable of navigating whatever usage it's being built for.

No Investment Barrier - One of the interesting parts of ICO is that users are free to purchase whatever amount of coin they are willing to, by doing this, they get to recoup high retunes from the project when it eventually came into existence. and this has been one of the positive impacts ICO has on crypto investment.

Dismerits of ICO

Scam -When dealing with ICO, one has to be extra careful, most of these projects are not what they claimed to be, some are just after the investor funds, and as soon as they mark their targets, they run away with investors asset leaving them with no return and massive loss.

Rug and Dump - this has always been a major fear of ICO investment, there is some project that after the ICO, as soon as the investors recoup their profits, dump the project causing some retailers on heavy loss, this is one of the risks involved in ICO and why many are afraid to participate or invest in the ICO.

No solid Project - Just like I had said earlier, some of the ICO might not be what they claim to be or might not have the capacity to fulfill their plan, which in this case, the project scrumble, and when there's no longer a demand for an asset, it's almost irrelevant this resort to a terrible loss for the investors.

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Conclusion

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Here comes my conclusion on ICO, where I have explained ICO to be a method of investing in a project that is yet to be exposed to the crypto world, and when this is done, the project gives some amount of the coin to its stakeholders, then afterward they recoup their investment at a high rate after supporting the project through its launch phase.

Thank you everyone for coming, I hope you've been able to grab a thing or two regarding the ICO topic, I hereby invite @josepha and @Sahmie to participate in the contest as well.