Digital reading of cryptocurrency “playing new” gameplay: IDO nearly 10 times income is much higher than holding currency or holdings


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In 2020, the return rate of A-share “news” is about 19.32%. In the field of cryptocurrency, “newing” is also an important means of obtaining excess returns.

Title of the original text: “How to play “Mathematics”: IDO’s income is about 10 times, and these keywords need to be mastered.
Written by: Carol

All along, in the A-share market, “strike new” is one of the important means to obtain high returns. According to public information, in 2020, the average profit of A-share “news” is about RMB 38,631, and the rate of return is about 19.32%. In the currency circle, “newing” is also an important means to obtain excess returns.

In January 2019, Binance took the lead in launching Launchpad, and then major exchanges rushed to launch IEO, which set off the first “new hit” fever in the currency circle. According to PAData’s earlier analysis, the average return of early IEO tokens is as high as 7.63 times. For investors, if they participate in “new innovation”, they will earn money when they buy it.

With the emergence of more and more IEO projects, the stock of funds in the market has been fully consumed, and the income of IEOs has not been as good as before. At that time, it coincided with the first peak period of DEX development. Affected by this, in June of the same year, Binance once again launched a new “new” project. Binance DEX listed RAVEN (Raven Protocol) through IDO. However, due to the limitations of the development of DEX itself, IDO at that time was not as popular as IEO.

However, there is always a demand for financing in the market. According to PAData’s statistics, the ICO in 2020 is still one of the main forms of financing in the industry, with a total financing amount of approximately US$225 million. Therefore, when DeFi fully rises, IDO also “comes back.” In 2021, IDO will become more and more popular. Not only special IDO platforms will appear on the market, but also customized IDO modules or solutions will appear on the market. So, from the data point of view, how much benefit can the current “new” IDO bring to investors? What are the advantages and disadvantages of this form of IDO?

IDO Keywords: DeFi, auction, whitelist

There are many different interpretations of IDO’s “D”. Some people think that IDO is the first token issued through a decentralized exchange (Initial DEX Offering), and some people think that IDO is the first token issued through DeFi (Initial DeFi Offering).

The IDO changes can also be seen from the name dispute. In the initial stage, IDO is done mainly through decentralized exchanges, but there are some problems and hidden dangers in the initial token issuance on AMM DEX, such as “scientists” running away or “giant whale” user trading causing ordinary users IDO Loss of revenue, etc., this has caused some projects to migrate their first tokens to other DeFi platforms with more complex trading algorithms for the consideration of community mobilization and fair issuance. After the issuance is completed, they will be linked to decentralized transactions for liquid market making. . Therefore, the development of IDO has basically gone through two stages: DEX and DeFi+DEX.

Judging from the main IDO models in the current market, Uniswap and Balancer still use swap. The main difference between the two lies in the composition of liquidity. Uniswap is not a DEX specially developed for IDO, so its IDO liquidity is consistent with the liquidity of other fund pools. And Balancer is a set of template liquidity bootstrapping pools LBP (Liquidity Bootstrapping Pools) specially developed for IDO. Its biggest feature is that it allows the issuer to customize the weight of the fund pool, which can be linear or an exponential curve. Balancer believes that by quickly adjusting the weights, the value of the tokens in the pool can be reduced and the price spike caused by early speculation can be prevented.

Most other emerging platforms use auctions to issue tokens. Here, auctions are more diverse. Currently, there are many platforms that provide fixed exchange rate auction models, including Bounce, Polkastarter and Sushiswap. Taking Polkastarter as an example, the issuer can set two exchange rates in the two fund pools, Public (public offering) and POLS (private offering). Generally, there is no minimum amount for issuance, but a maximum amount.

In addition, the more interesting new methods include Mesa’s batch trading auction (Batch Trading). In this model, the issuer does not need to provide buyer liquidity, and buyers can use many different tokens to participate in the sale. This kind of auction will not be lower than the pre-set limit price. In the same lot auction, all orders have the same price, and there is no arbitrage. In addition, Bounce is currently the platform with the most open auction methods. In addition to some of the auction methods mentioned above, it also provides special auction methods including NFT Lottery (lottery).

There is a bigger difference between IDO and IEO. In terms of participation qualification, IEO is deeply bound with exchange platform currency. Users participating in IEO must hold a certain amount of platform currency, while IDO and DeFi governance tokens The degree of binding is much smaller, and governance tokens are usually only used in the issuance voting link. The actual participation does not consider the token holdings, but requires participants to complete KYC and register as a whitelist member. However, there are also some opinions that KYC is not in line with the spirit of the blockchain, because the issuer can gain more control over who has purchased how many tokens.

IDO income: nearly 10 times the income is much higher than holding currency or holdings

PAData selected the two main platforms Uniswap and Polkastarter in the two stages of IDO to observe the revenue performance of IDO tokens. It can be seen that the early AMM DEX IDO has a relatively large range of revenue, while the recent Polkastarter fixed exchange rate auction has a very large range of IDO revenue. small.

Judging from the earnings on the day of listing (based on the closing price of the first day of Uniswap trading), the average earnings multiple of the three earlier IDO tokens on Uniswap is approximately 3.27 times. The latest three tokens of IDO on Polkastarter The average return multiple of is about 6.75 times, and the overall average first-day return is about 3.81 times (median).

From the perspective of the highest historical return (subject to the highest price of Uniswap historical transactions), the average return multiple of the three IDO tokens on Uniswap reached an astonishing 57.99 times, which is mainly affected by the extreme value of UMA IDO as high as 127.2 times. Then the average return multiple of the other two tokens is about 23.41 times, which is also very high. The average return multiple of the three IDO tokens on Polkastarter is much lower, about 7.55 times, slightly higher than the day of the initial launch. The overall average historical maximum return is approximately 13.80 times (median).

The current income situation is similar (subject to Uniswap’s March 3rd transaction price). The average return multiple of the three IDO tokens on Uniswap is about 36.22 times, and the average return multiple of the three IDO tokens on Polkastarter About 6.7 times. The overall average current return is approximately 10.07 times (median).

Digital reading of cryptocurrency "playing new" gameplay: IDO's nearly 10 times return is much higher than holding currency or holdings

Digital reading of cryptocurrency "playing new" gameplay: IDO's nearly 10 times return is much higher than holding currency or holdings

In addition to being affected by time factors, the price of the first issue is also an important reason for the size of the income range. Since the initial price of AMM DEX depends on the allocation of liquidity capital pools, this has provided incentives for “giant whales” and scientists to raise the price of IDO for general investors. Fixed exchange rate auctions or other more complex auction methods control the fluctuation of IDO prices by restricting the qualifications of participants, limiting the initial price, and limiting the maximum sales degree, which reduces the space for games between users and also reduces the IDO’s income range. .

In general, IDO’s current average income of nearly 10 times is still significantly higher than other investment methods.

PAData has calculated the “new listing” gains of A-share new stocks since February, and the results show that the average first-day closing gain of the 17 new stocks is about 1.73 times (median), and the highest one is only 5.51 times. The average historically highest return is about 2.26 times, of which the highest Mankalong is about 9.43 times. The average current income is only 1.55 times, of which only Guanzhong Eco, XGIMI Technology and Mankalong exceed 4 times.

Digital reading of cryptocurrency "playing new" gameplay: IDO's nearly 10 times return is much higher than holding currency or holdings

PAData also counted the currency holding income of other digital currencies this year. The results show that the average holding income of the 30 digital currencies sampled this year is about 2.74 times (the median). Among them, the digital currency ranked 90-100 by market value this year Since then, the average currency holding income has been the highest, about 2.81 times (median), and the average holding income of digital currencies ranked 1-10 by market capitalization has been the lowest this year, only about 1.92 times (median). Without considering the time efficiency, except for the FTM with the highest return, the holding returns of the other sampled tokens are lower than the IDO returns.

Digital reading of cryptocurrency "playing new" gameplay: IDO's nearly 10 times return is much higher than holding currency or holdings

However, it should be stated that the return multiple calculated here is often the instantaneous lowest/highest price in the disk, which can only provide a range reference for understanding the return range. In fact, IDO’s high returns are accompanied by high volatility. According to statistics, the average first-day volatility of the three tokens on Polkastarter is about 31.61%, and the historical average daily volatility is about 33.27%, which is significantly higher than the volatility of general digital currencies.

Digital reading of cryptocurrency "playing new" gameplay: IDO's nearly 10 times return is much higher than holding currency or holdings

Since the beginning of this year, the average daily volatility of 30 digital currencies with different market capitalization rankings is about 16.27% (median). Among them, the digital currencies ranked 1-10 by market capitalization have the lowest average daily volatility, about 14.51%, and are ranked by market capitalization. The 90-100 digital currencies have the highest average daily volatility, about 18.10%. It is much lower than the recent IDO token volatility.

Digital reading of cryptocurrency "playing new" gameplay: IDO's nearly 10 times return is much higher than holding currency or holdings

In addition to IDO, there are ITO and IFO worth knowing

IDO has become a popular financing method. After IDO, many DeFi projects will immediately connect to the DeFi platform for liquidity market making and start liquidity incentives. This allows IDO to not only complete the financing goals, but also complete the cold start of new projects, and call users to a greater extent Participation.

In addition to IDO, there are actually other new launch forms that deserve attention in the near future. The first is ITO (Initial Twitter Offering), which is famous for the release of MASK. As the name suggests, ITO means the first token issuance based on Twitter. Users can participate in snap-up purchases by linking their wallets to their Twitter accounts. After MASK went online, it surged by at least 20 times to add fire to this method of ITO. After MASK, mTSLA (Mirror) also opened ITO on March 2nd, Eastern Time. The project party believes that ITO can expose the tokens to the greatest extent on social media and bring traffic to the project.

The second is IFO (Initial Farm Offerings), which is similar to the DeFi liquidity mining that was popular last year, that is, new tokens are obtained by providing liquidity for the DeFi protocol, but the difference is that the previous liquidity mining Mines can only dig out the governance tokens of this project, which is similar to planting beans to get beans, but IFO mining uses the liquidity of other assets to dig new project tokens, similar to planting beans to get melons. For example, CAKE/BNB liquidity LP on Pancakeswap can be used to buy Helmet, which is a typical IFO. Pancakeswap has publicly stated that some IFO revenues have reached 250%.

After entering the bull market in the second half of last year, the funds on the market were active, and investors’ sentiment was also high. While various new high-yield gameplays emerged one after another, users should also be wary of risks, such as counterfeit currency and capital trading.

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