Things To Note When Joining IDO For Effective Investment

IDO is considered a form of investment with high returns for investors. As with any investment, high returns come with risks. To invest safely, you need to understand the market and how it works.

To learn about the concept of “What is IDO?” Readers can find out the previous article of Coincu News. In today’s article, I will share tips and ways to help investors participate in IDO safely.

A typical IDO allows investors to lock funds into a smart contract right before the project launches its native token. Investors receive new tokens in exchange for the locked amount being transferred to the project at the time of token creation, i.e. when a project issues its tokens.

Things need to notice

Fraud Risk: Over $10 billion was stolen in DeFi theft last year, so security is always a top concern. IDO accessibility and lack of testing are both positives and negatives. The negative aspect is that it increases the likelihood that scam projects will be launched and flood the market. Of course, the same applies to ICOs.

Price spike at the start of IDO: As soon as the first individual buys a token, the price of that token starts to increase. Few investors can buy the token at the introductory price before its value increases.

Price Manipulation Opportunity: The vulnerability of the IDO mechanism to the pump and discharge method is another drawback. Some traders can buy a lot of tokens at their base value using a trading bot, then sell them quickly when the exchange rate has risen enough.

Tips to join IDO safely

Use the correct link to sign up for an IDO. Scammers will take advantage of IDO’s instant excitement to create fake registration pages. That’s why you need to use the correct registration pages so as not to lose money unjustly.

Use Launchpad on a trusted DEX. In fact, there are many reliable DEXs that you can join investment. Use centralized and trusted exchanges to take your chances of getting tokens successfully.

Research the projects you are investing in. Will the project be built by a reputable, reliable team? How will the funds raised be used? How will the profit amount be calculated? By clearly understanding the above issues, you can avoid unfortunate risks.

Conclusion

Hopefully, this article can help investors better understand the things to keep in mind when participating in IDO for the most effective investment activities in the cryptocurrency industry. If you have any suggestions, please give us feedback under the comment section so that the quality of our articles can be improved.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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