Goodday steemians and welcome to season 5 week 5 of the crypto academy contest. The engagement challenge for this week is based on initial coin offering in the crypto ecosystem

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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

Initial Coin Offerings (ICO) and their purpose in the crypto ecosystem

An Initial Coin Offering (ICO) is one of the prominent ways of fundraising in which a project team decides to sell its project/token to early investors at a reduced price in order to raise money to finance the rest of the project cycle. The concept of initial coin offerings was largely popularized with the explosion of the ethereum protocol.

They were mostly deployed via ethereum ERC-20 protocol standard. ICOs have experienced a positive rate of progression ever since its inception. The first ICO ever carried out in 2016 was reported to have raised a few million, but subsequent ICOs carried out within two years from the first ICO were reporting average sums between 20 million and 30 million dollars. Some hyper-successful projects like bancor even blew past a hundred million dollar threshold being able to make over 150 million dollars

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Purpose of Initial Coin Offering (ICO)
The major purposes of ICOs include:

It's used to raise assets to finance the development of a project: Project tokens or assets are offered to investors at a reduced price enabling them get an higher value than what they're paying for while supplying liquidity to the project and making funds available for project team to develop the project further. This is a win win scenario for both investor and team.
For crowd funding purposes

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.

Initial Exchange Offering (IEO)

An Initial Exchange Offering or IEO is a form of fundraising event conducted on and administered by a popular exchange fundraising platform that enables users or investors to be able to purchase tokens directly with the use of their digital wallets.

Initial Exchange Offerings are effective ways for a project to raise funds, and increase their visibility and user base whilst finding a way to cut back on advertising and marketing costs as it increases the exchanges/project audience leading to more focus on its development.

Initial DEX Offering (IDO)

An Initial DEX Offering or IDO for short is a kind of crypto token offering which allows users to lock existing assets on a decentralized exchange in order to gain new tokens generated.

IDO differ from other coin offerings in the sense that a user needs only have a single funded wallet with the exchange in order to participate unlike having to manage different wallets and their on-chain transactions on multiple blockchains like other models. Some of the advantages of Initial DEX offering over others is its fast trading, immediate liquidity and easy accessibility. Anyone can conduct an IDO to raise funds, all they have to do is open a pool.

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The Binance Launchpad platform is well utilized for Initial Exchange Offerings (IEO's), it has housed multiple fundraising projects since its existence, notably some projects like sandbox, kava, and band protocol and in order to participate in such, users would have to create or make use of a binance mobile wallet which would serve as their digital wallet in order to have access to the launchpad.

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Users would need to log in to their binance mobile wallet and navigate to the top left menu as displayed . Select the launchpad from the list of drop-down options.

The next interface would display featured projects on the launchpad with their current standings shown in a way to guarantee easy understanding and decision-making on the part of the user or investor. Also, a summary of the necessary information is itemized for projects about to progress into their token sale phase.

Clicking on any of these projects gives more detailed information about them such as their price, session start time and end time, the supply etc...

Another important fact to note is that participation in the binance launchpad for IEOs requires users to go through KYC verification and requirements which involves a 4-step verification process where personal information is requested for validation.

ICO Participation, Experiences etc...

Yes, I've been able to participate in an ICO before and the experience wasn't what I would describe as positive. It was the Robinia swap token which happened to be one of the most talked about project on a community on steemit as at the time. It started out all well and there was an initial private sale before the ICO kicked in. We saw the price rise fairly well and skyrocketed to decent two figures, hit an all time high of $37.26
and shortly after fell all the way to 0.10 while a lot of investors had liquidity stakes.

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The project was poorly managed and really had no long term aspirations. The current price of the RobiniaSwap token is $0.001711 as seen.

Succesful project ICO and result of the event
One project that has performed a successful ICO is that of the Rangers Protocol (RPG) which is built upon the ethereum protocol. Its ICO raised over $64,620,000 making it one of the most successful ICOs last year.

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The ICO had an allocation of 105,000 RPG offered at a price of $4 per token to the public which began on the 29th of February 2021 and ended on the 7th of October 2021. TBA (Cryptobeast token) was the base token used in the offering where investors were allowed to exchange this token for the native RPG.

It's interesting to note that the token peaked its all-time high of $253.67 a month ago before crashing down to $1.41 with the general market decline.

According to coinmarketcap

Its current price at $1.41, RPG has a max supply of 21,000,000 of which 972,829.51 RPG are in circulation as reported by the project. It has a market capitalization of $1,370,859 and a 24-hour trading volume of $1,057

Investors who took advantage of the ICO and purchased at its launch price and held to its all-time high last month would have enjoyed more than 400% in profit.

Merits and Demerits of Initial Coin Offering

Merits

It's widely accessible and allows for greater participation since all its transactions are done online.
It provides high liquidity for a project which affects it positively and enables it to be transacted on the market without greatly affecting its market value significantly.
ICO's have been able to provide successful higher rate of return to investors.

Demerits

One of the biggest demerits of ICO's remains that most of the offerings conducted are scams intended to cart away with investor stake as part of liquidity.
Its highly volatile and experiences price fluctuations due to various other ICO's on the market and investor concerns and actions.
Substantial knowledge of crypto and digital wallets is needed in order to take part in ICO's successfully.

Conclusion

The steemit crypto academy has been a major backbone in my knowledge of cryptos, economy, and blockchains alike. Each task required adequate research on the part of the writer before completion and that helps a lot in understanding various other ecosystems. Thanks for reading this publication. I invite @lavanyalakshman , @sahmie, @drqamu and @simonnwigwe to give their two cents on this publication :)

An Initial Coin Offering (ICO) is one of the prominent ways of fundraising in which a project team decides to sell its project/token to early investors at a reduced price in order to raise money to finance the rest of the project cycle.

That's a good explanation of ICO, it's used to introduce tokens to the community, this is when these tokens don't really have any value and the purpose is to raise funds for the project.

This does not only profit the project but the investors as well because the listing price is always higher in multiple folds than the price it was sold at ICO.

Furthermore, some of the ICOs are not genuine ones because they are sometimes set up by scammers to steal away investors money so it is always good to research well before investing in ICO.

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lavanyalakshman (75) · 2 years ago

They were mostly deployed via ethereum ERC-20 protocol standard.

Due to huge gas fee needs for transactions on ERC,now most projects launching on other blockchains like BSC, and KAI.

Due to market conditions at present no ICOs on crypto market thats much,very rarely we getting now.

Nice Entry from you. Best of luck my friend.

$0.00

doppley (68) · 2 years ago

Yes ethereum gas fees are killing. It’s terrible having to pay gas fees larger than the transaction itself at times. Thanks for taking the time to comment, glad to have you here :)

Yup

temitopef (70) · 2 years ago

I'd say most of the ICO's are set up with a scam motive. It's getting increasingly difficult to discover new profitable ICO's
Thanks for taking the time to comment @temitopef, glad to have you by :)

preye2 (69) · 2 years ago

You have shared an interesting article on this concept and I commend you work dear friend. Your remark on the Robinia swap token got me laughing, as you weren't giving it a positive review. Many different blockchain projects have been looking to launch their own ICOs, but at the end, they do not deliver bon their promise. Investors should make sure to always make proper research on the roadmap and team members of a particular project before venturing into it.

Thanks for sharing friend, and goodluck in this contest. #steem-on.

I will appreciate if you equally engage on Mine

Robinia swap was a major flop imo, very poor management and I lost a lot on it due to investing based on emotions and hype instead of research. I saw the price drop from $20+ to $0.5 after purchasing their token lol. They went ahead to modify their token and take up another project while letting the old one rot. That's one way to spot a red flag and avoid further projects from them.

Thanks for your thoughtful comment my friend :)

simonnwigwe (79) · 2 years ago

ICO over time has proven to be one of the best ways in which investors get a very high return and this is because those concerned get these tokens when ICO is ongoing and the token at this point is sold at a very discounted price to them and if the project goes as plan, it is expected that the price of the token raises significantly there by providing a high return to investors. I wish you success in this contest @doppley.

Indeed, ICO's are one way to profit greatly in the crypto space by getting at a discounted price and selling at a higher price or in the case of a successful project, holding till it moons.
Thanks for stopping by @simonnwigwe :)

starrchris (75) · 2 years ago

Hey friend,

You have written perfectly fine but your article have really lacked quality markdowns and I would expect you to go through achievement 4 in the Newcomers community, your post has enough quantity but have average quality. For example your post lack justification and organization. You can do better and hopefully you will score higher than before, in any upcoming contest or competition

Thank you very much for sharing, please you can check my own entry here

wishing you success

steemcurator09 (51) · 2 years ago

Thank you for sharing good content with Steemit Community.

Steemit Crypto Academy Contest / S5W5 - Initial Coin Offering in the Crypto Ecosystem

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

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.

wishing you success