HOMEWORK WEEK 5
Entire Question
1). Explain in your personal opinion whether IDO should be done on cryptocurrency.
2). Can IDO have a significant impact on the cryptocurrency world?
3). Explain one example of a token that has been IDO but failed/rug pull.
4). Make a detailed fundamental analysis of 2 tokens that have done IDO, and compare the two tokens. Then give your opinion on the results of your analysis.
5). Look for 1 token that is currently IDO and explain the steps to be able to participate in the IDO.
6). Conclusion.
- INTRODUCTION OF INITIAL DEX OFFERING ( IDO )
- MY PERSONAL OPINION OF INITIAL DEX OFFERING (IDO)
Basically, IDOs like a business a tool to promote someone's tokens in Decentralized Exchange communities. Therefore, every user can take decisions without risk. It also contributes greatly to the liquidity of tokens. As it has more many benefits including immediate trading, liquidity and lower costs for listing, IDO should be done on cryptocurrency.
Of course, IDO have a significant impact on the cryptocurrency world. Because it has many benefits and contributions to the cryptocurrency world. Below I have defined some of them separately.
IMMEDIATE LIQUIDITY
- Liquidity is a very important factor for the survival of the cryptocurrency world. This means that there must be enough buyers compared to sellers. Therefore, in the IDO, we can easily get immediate liquidity to the tokens in the project without wasting time. Especially, once a project is opened in a Decentralized Exchange, it cannot be reopened in another Decentralized Exchange as it is a rule in IDO. Therefore, this is a good opportunity to avoid selling tokens unnecessarily.
FAST TRADING ABILITY
- When new projects open in a Decentralized Exchange, every investor can quickly buy their tokens as the coins in IDO can be traded immediately. Therefore, every investor can buy their required tokens at the correct time and also it can also be sold on time with profits. Furthermore, it can also increase the attractiveness of investors.
LOWER COSTS FOR LISTING TOKENS
- At present, if we consider other exchanges, listing a token is a process that costs a lot of money. Therefore, every user can't be participating in this event in other exchanges except users who use Initial Dex Offering. Actually, in IDO, they take the lower costs for listing our tokens as our tokens are hosted on a decentralized exchange. Therefore, it is a significant impact on the cryptocurrency world.
TRANSPARENCY AND SECURITY
- As Initial Dex Offering (IDO) uses the Blockchain network system, every user have higher transparency and security of their tokens. Therefore, anyone can buy or sell their tokens in IDO and others' details cannot be changed as it is working according to the decentralized system.
According to the Initial Dex Offering system, anyone can list any token in a decentralized exchange. Further, they have the ability to pair their tokens with top cryptocurrencies like Ethereum. Therefore, sometimes Rug pulls can happen in these decentralized financial systems.
If I go deep into this, when malicious persons listed their tokens as a new project on IDO, they stay only for a very short time. In fact, they sell all their coins as soon as they get the value they want. Therefore, they drop the value of those coins to zero. Finally, these projects become useless and Rug Pull. Below I've defined a good example for a Rug Pulled project.
TruAmpl (TMPL) TOKEN RUG PULL
- TMPL TOKEN is a good example of this type of situation. This token was created by Imitating Ampleforth (AMPL) coin. And also, it was created by basing the Ethereum chain and happened on the Uniswap decentralized exchange platform. However, these fraudulent token creators pulled out the entire liquidity containing 154 ETH & 2,926,099 TMPL tokens and many investors exchanged their valuable ETH for TMPL.
Unfortunately, scammers sold all the coins once their target has been reached. Therefore, all the buyer’s TMPL tokens were worthless. Exactly its value was about 154 ETH which was worth approximately 90,000 USD.
Below I've attached a screenshot of the Ethereum contract address that taken from https://etherscan.io. We can clearly see the value of that coin has reduced to zero.
Address - 0x5d64a2b59328c1e387806ebefaebcf57a45a298e
THORChain (Rune) token from Binance DEX IDO
THORChain (Rune) token can be defined as a successful project. And also, they have conducted an Initial DEX Offering of their RUNE token on Binance DEX on 20 July 2019 with 20 million RUNE token distribution.
Before the IDO project, the value of their Rune token was $0.35to $0.39 rate. At present we can see $6.25 to $6.76 rate and ranked to Rank #64 according to Coinmarketcap. Further, current Market Cap is $1,467,571,664 and 24h Volume has increased to $204,005,542. Below I've attached a screenshot that I have taken from https://coinmarketcap.com/
Above we can see this token has gained good value and popularity when we compare it with the beginning of this token. Now it has been listed on many exchanges including centralized exchanges.
Avalanche (AVAX) Initial dex Offering
Avalanche (AVAX) is another successful event in their Avalaunch launchpad and Initial DEX Offering (IDO) platform in May 2021. Avalanche is a decentralized smart contracts platform that is working for the scale of global finance. They have done a big campaign for their project.
According to my fundamental analysis, before the IDO project, the value of their AVAX token was $32 to $36 rate. At present we can see $12.90 to $14.50 rate. It means the value of their token has been reduced. However, when we compare it with the beginning value. It was $4 to $4.6 rate. Therefore, according to my analysis, the price has been reduced due to BTC dumping.
Further, according to https://coinmarketcap.com Avalanche (AVAX) token has been ranked #47, current Market price is $2,240,655,286 and Fully Diluted Market Cap $9,304,071,101 and the Total volume for 24h $62,556,130. Below I've attached a screenshot that I have taken from https://coinmarketcap.com/
MY OPINION ON THE RESULTS OF MY ANALYSIS
According to my analysis, THORChain (Rune) token has gained more benifits from the IDO project. Because it has been able to keep up with rising prices since its inception. And also, It has been able to keep the price at a certain level even when the BTC is declining. It means, this token has gained valuable investors from the IDO project and they don't have sold out their tokens unnecessarily.
When we consider Avalanche (AVAX) token, even if its current price is higher than the price of Rune, this price gap may change in the future. Further, it does not appear to have received any privileges from the IDO project and its prices seem to be declining as compared to Rune token. However, both coins have a significant contribution to the cryptocurrency world and both coins will keep the value for a long time.
There are few ways to join with IDO like Telegram and Direct LaunchPad. So, here I've used PAID Ignition Launchpad to participate in the IDO.
STEP 1
- First of all we should log in to the PAID Ignition Launchpad website. Here I've joined it through https://ignition.paidnetwork.com/ site. After that, we can click on sign up. (Check the below attached screenshot)
STEP 2
- Then we have to fill the forum for a successful signup. After entering the correct details, we can click on "Sign Up"
STEP 3
- Now we can log in to the site with the given details. After that, we have to click on "CONNECT WALLET" (Check the below attached screenshot)
STEP 4
- Then we have to select an option from the give list to connect our wallet. Here I've used the "wallet connect" option. (Check the below attached image )
STEP 5
- Finally, we can select any project from the given list and click on "Join pool"
As I described earlier, IDO is a better chance to increase the value and liquidity of any token. However, according to my examples, I've proven that these things alone cannot protect the value of tokens. To do it, everyone should work together including valuable investors. If buyers are selling their coins unnecessarily, the value of any coin can't be increased. Therefore, everyone should try to hold their tokens for a long time.
This is all about my homework and I really appreciate Professor @wahyunahrul for your valuable lesson and your dedication to creating a very essential lesson for us. Usually, this lesson is really important to my life as I am still trading in the cryptocurrency world.
Thank you..
Hi @reddileep, Thanks for taking my class.
Based on the homework that you have made, here are the details of the assessment you get:
My Reviews and Suggestions:
You have completed the given task very well.
You made your assignment with a very nice structure, good job!
Use the opposite color on your watermark so it doesn't blend with the screenshot background.
Thank You!
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