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At the end of 2018, the trend of raising capital through ICO (Initial Coin Offering) finally came to an end with difficulty in raising capital for potential projects. Nevertheless, the fact that some projects were "on hold" for a long time but were not issued on the exchange made several investors feel distrustful. When the ICO wave began to spread, many investors suffered losses; they even lost everything because of investing directly in the project's fundraising platform. Some hazards included the risk of unlisted tokens, the core team leaving the project after raising funds, the development team disbanding, or other technical constraints.

From there, the idea of having a third party with the vision and experience of being an intermediary in the appraisal of potential projects in terms of their teams, ideas, and assurance investors’ interests began to be formed. The third-party will set up a platform to focus on raising capital for potential projects that they appraise, contact and connect with investors to raise funds.

The pioneers of these movements are cryptocurrency exchanges. Binance officially launched Launchpad with some initial projects such as GIFTO, BREAD and especially BITTORRENT, which then successfully created a new wave for venture capitalists. This process is called IEO (Initial Exchange Offering).

However, the form of initial token issuance through a centralized exchange also has its problems, such as complicated testing and operating procedures, along with expensive service costs.

IDO (Initial DEX Offering) was created to resolve the above disadvantages with the available decentralized attribute. The trend of IDO continued to spread with the born of multiple famous Launchpads like BSCPad, GameFi, Red Kit...Currently, with the own strengths, IEO and IDO are the two most popular forms of initial token issuance when it comes to Launchpad.

Published on March 23, 2022

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