The crypto industry raised $10.7 billion from venture capitalists in 2023, with the previous year pulling in triple that amount. Beyond institutional money, retail investors tap into crowdfunding methods like initial DEX offerings (IDOs).
How does an IDO work?
An IDO lets a project list its token on a decentralized exchange (DEX), using sale proceeds for development. DEXes operate without a central authority, relying on smart contracts and community-provided liquidity. The process: the project announces a token sale on a DEX or IDO launchpad; users connect a wallet and buy tokens directly; funds flow to the project; some projects offer future airdrop rewards. Listing on a DEX is typically cheaper than on a centralized exchange, which charges hefty fees. Sales outside launchpads often happen after the main IDO, potentially offering worse prices, making launchpads the preferred route.
Are IDOs legal?
Legality depends on the project and jurisdiction. If a token has utility beyond generating revenue for investors—proving it's not a security—regulators may allow it. Otherwise, the U.S. SEC and other authorities view IDO tokens as unregistered securities, risking penalties for both projects and buyers.
Top IDO platforms by ROI
Leading IDO launchpads include:
Oxbull: top-ranked with $29.54M in 24-hour volume and a 5.78x total ROI. It's a tech incubator hosting IDOs.
Fjord Foundry: second most popular, with a 1.35x ROI, connecting investors to projects.
DAO Maker: positioned as a founder launchpad, showing a 0.77x ROI and $197M daily volume.
Ape Terminal: another top platform with a 3.38x ROI.
Polkastarter: focuses on Polkadot ecosystem projects.
Newcomer Enjinstarter also delivered notable returns, underscoring IDO's fundraising potential.
Finding new IDO projects
Check the above launchpads regularly. Verify regulatory status before investing, as buyers can be held liable for unregistered securities. Online communities on Telegram, Reddit, and Discord host IDO discussions—but scams are common. Savvy investors read the whitepaper and assess reputation. IDOs differ from ICOs (which suffered mass scams in 2018, with the SEC finding two-thirds had no working product) by listing on DEXes. Risks remain, so caution is advised.