SHO (Strong Holder Offering)

A Strong Holder Offering (SHO) is a fundraising strategy used in the cryptocurrency industry to attract funding from individuals who already possess a specific cryptocurrency. This fundraising model is commonly utilized by DAO Maker, a platform specializing in launching new projects in the blockchain space.

SHOs are designed to target eligible investors based on their on-chain activities and other proprietary data sets. The primary goal is to attract individuals who have a strong commitment to the cryptocurrency ecosystem. One way this is achieved is by allowing only those who have held a competitor coin for a minimum of six months or active liquidity providers on a decentralized exchange (DEX) to participate in an SHO. Additionally, individuals with a transactional volume exceeding $5 million in the past month may also qualify.

The concept of SHO benefits both the crypto project seeking funding and the investors. For the project, it provides access to a pool of investors who have demonstrated their dedication by holding onto a particular cryptocurrency for an extended period. This indicates “strong hands” or the ability to withstand market volatility. DAO Maker recognizes and incentivizes these investors by selecting them as participants in an SHO and providing them with additional protection.

On the investor side, participating in an SHO allows them to support and contribute to promising blockchain projects while enjoying potential rewards. It offers an opportunity to invest in projects at an early stage and potentially benefit from the growth of the project’s native token. However, participants also have the option to seek refunds if they wish to withdraw their support.

Since DAO Maker’s update on the offering, SHO has been renamed to refundable Strong Holder Offering (rSHO). This change reflects the flexibility for investors to potentially recover their investment if they decide to exit the project. It is important to note that the right to a refund expires if the value of the token issued during the initial Strong Holder Offering increases and remains at 400% for 120 days.

DAO Maker follows a meticulous evaluation process to ensure the quality of projects conducting an SHO on its platform. Before allowing a project to proceed, it subjects the project to a series of tests to determine its viability and adherence to its roadmap. This selection process limits the number of projects that can offer an SHO within a 12-month period, thereby deterring scammers and maintaining a higher standard for startups.

By implementing this framework, DAO Maker aims to protect the interests of investors, attract committed participants, and enable promising blockchain projects to secure the necessary funding for successful development and growth.

Here’s an example to illustrate how an SHO works:

Imagine a new blockchain project, XYZ, decides to launch its token through an SHO on the DAO Maker platform. XYZ has already established a strong community of supporters who have been actively holding their competitor coin for more than six months. DAO Maker verifies this and approves XYZ for an SHO.

Eligible investors who hold the competitor coin or are active liquidity providers on a DEX can participate in XYZ’s SHO. They can contribute funds to receive XYZ’s token at a predetermined price, providing them with an opportunity to become early holders of the token.

Additionally, XYZ may offer various incentives to these SHO participants, such as exclusive access to certain features, discounts, or voting rights within the project’s ecosystem. These incentives are designed to reward and recognize the commitment of the participating investors.

After the SHO concludes, XYZ receives the funds raised, enabling the project to further develop and deliver on its roadmap. The investors, on the other hand, become early token holders with the potential for future rewards if the project succeeds and the token value appreciates.

In conclusion, a Strong Holder Offering (SHO) is a fundraising strategy used in the cryptocurrency industry to attract funding from committed investors. It is designed to benefit both projects seeking funding and investors who demonstrate their dedication to the blockchain ecosystem. DAO Maker’s implementation of SHO aims to protect investor interests, attract strong hands, and ensure the quality of projects launched on its platform.