Despite the recent turbulence in the crypto market, the amount of people utilizing blockchain technology continues to grow and grow. This is most apparent in the rise of DeFi which has seen the TVL grow 88 times over in the last year. DeFi constitutes active engagement in blockchain projects. It’s a demonstration of how this bull cycle hasn’t just seen a rise in blockchain investors but blockchain participants as well.
These are the people who are vital to building a decentralized world. The people who understand the utility of each new project. The people who recognize the potential of blockchain and use it to enhance their online lives, building a bigger future for crypto.
This is the future that Master Ventures is investing in. We target projects that disrupt established centralized institutions. Our projects demonstrate the power of decentralization. We choose them for their ability to fulfill the potential of blockchain. As long as the number of people utilizing blockchain continues to grow, the future for these projects is bright.
With this in mind, the next thing to determine is what the best way to launch these projects is. Master Ventures firmly believe that an IDO optimizes a launch for both the project and the potential investors.
The Time Before the IDO
2016 saw the appearance of initial coin offerings (ICOs) as a means for a project to distribute tokens to the public. An ICO involved the project selling tokens directly to buyers. These freshly minted coins would create desperation to buy once they appeared on exchanges, causing the value to multiply rapidly.
In 2016, projects could make a few million dollars when they launched. However, by late 2017 ICOs were receiving incredible evaluations. Projects realized they could release tokens slowly over a long period of time to maximize their profits. This led to the long-lasting ICO for the launch of EOS receiving over $4 billion.
The hype that this model created was unsustainable. A huge amount of money was being generated with little regard to the project’s fundamentals. As projects failed to deliver, people lost faith in the model and the ICO bubble burst in 2018 at the end of the last bull cycle.
ICOs were then replaced by initial exchange offerings (IEOs), a model that was spearheaded by Binance. IEO projects were much more carefully vetted and saw the tokens launched on popular exchanges like Binance, KuCoin, and Huobi. This was a much more sustainable model and did, for a while, offer better value for investors. They were able to invest in solid projects that had been independently verified by a centralized body.
However, the nature of crypto means that decentralization will always be the preference for a huge amount of investors. Now, the rise of DEXs has presented a genuine decentralized alternative to an IEO that can offer all of the same benefits.
The Rise of The IDO
The IDO combines the best of both an ICO and an IEO. The token is launched on an exchange but because it’s a DEX, the project is essentially sold directly to investors. IDOs have many advantages over their predecessors, trading was fast, there was immediate liquidity and the fundraising was open and fair.
However, one issue with this method is that normal investors felt they had little opportunity to participate. There was the perception that the tokens were being bought up quickly by bots raising the price too fast for the honest investor to take advantage of. This is what led to the rise of the IDO Launchpad.
Launchpads ensure that investors can receive tokens at the launch price. They will also vet each project, ensuring that the team and project ideas are sound. Once enough tokens are distributed to the original group of investors, the project is listed on a DEX. This method combines the decentralization of an ICO with the careful vetting possible on an IEO.
Master Ventures and The IDO
IDOs are a great way to secure tokens at launch value before the inevitable volatility once they’re first listed on a DEX. However, IDO Launchpads also represents the best opportunity for projects, not just for investors. After a project is carefully vetted by a Launchpad, they have an organization that not only invests in them but advises and grows with them too. This is one of the most attractive parts of the model to us at Master Ventures.
Master Ventures is always on the lookout for new projects. We are also always searching for new ways to launch projects. We believe that currently there is no better way to launch than with an IDO on a Launchpad. It allows participation for investors, maintains the decentralized ethos of crypto, and ensures a project is properly vetted. We are proud of our participation in IDOs and we look forward to many more.
About Master Ventures
Master Ventures is a blockchain-focused Venture Studio, helping to build the next generation of blockchain-based Web 3.0 system innovations within the crypto industry. Launched in 2018 by Founder and CEO Kyle Chassé, the company’s ethos can best be summarized in the acronym #BeBOLD: Benevolent, Open, Love, Decentralized.
Master Ventures co-creates with entrepreneurs and businesses worldwide to turn the best ideas into innovative and disruptive products. They do this by investing as strategic partners through offering advisory services to the projects they believe in. To date, Master Ventures has invested in over 40 crypto projects including the likes of Kraken, Coinbase, Bitfinex, Reef, DAO Maker, Mantra DAO, Thorchain, and Elrond.
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