Participating in an IDO can be lucrative most times for an investor, but at certain times it can be quite tricky searching for the new x100 crypto gem. If you want to know what an IDO is, and its pros and cons – read our article at VRM Research.
IDO’s are not always profitable.
Unfortunately, pre-sale & IDO investors are sometimes left holding worthless tokens.
As examples of the cases with such situations, look at Crypto Puzzles IDO results with -92,8% ROI:
And Algo Painter with -82,8%:
It happened for different reasons, such as a developer failed to provide liquidity or initially providing the liquidity only to later remove it (this is called “rug pulling”).
A rug pull is a situation when crypto developers abandon a project and run away with investors’ funds. Rug pulls sometimes happen in the DeFi ecosystem, especially on DEXs, where malicious individuals create a token and list it on a DEX, pair it with a leading cryptocurrency like Ethereum.
But once a significant number of investors swap their ETH for the listed token, the creators then withdraw everything from the liquidity pool, driving the coin’s price to zero.
Ensuring that you don’t fall victim to a rug pull
Decentralized exchanges such as Uniswap algorithmically determine the prices of tokens in a pool depending on the available balances. Check the project’s liquidity in a pool before you invest, and check if there is a lock on the token’s pool for a certain period. But it’s not possible all the time, because not every project adds liquidity to the pool before an IDO.
Even if the project looks reliable and worthy, even if it has well-known investors and companies, it doesn’t guarantee positive results. The coin’s creators may even create a temporary hype around Telegram, Twitter, and other social media platforms and initially inject a substantial amount of liquidity into their pool to cultivate investor confidence and to drive FOMO that leads more people to invest in the token.
FLy protects customers and investors from the risks of an IDO
Driven by the principles of complete transparency and understanding investors’ needs, the FLy team has developed a Launchpad platform that provides its users with a high degree of risk protection within the volatile space of DeFi investing.
The FLy ecosystem, powered by its utility token Franklin (FLy), serve as the fuel that power the platform. FLy is a utility token with an actual purpose: hold FLy Tokens to get access to the Launchpad and risk-free IDO which is a distinguishing feature amidst other launchpad platforms. FLy token holders also get access to such solutions as trading signals for manual and API trading produced by quantitative trading algorithms, FLyDEX for traders and DeFi solutions for FLy token, such as staking and farming, a network bridge, escrow and more to come.
Risk-free IDO on the FLy platform. Case study
As we had mentioned previously, an IDO can be risky for investors. That’s why it’s extremely important to participate in such an investment type using the right platform, that ensures maximum benefits for its community of investors and protects its customers.
As an example, on August 5th 2021, a project called CFL365.Finance had an IDO for its token on the FLy Launchpad platform. The IDO was fully deposited within 30 minutes of starting and closed with a gained deposited amount double of what was necessary. But unfortunately, the $CFL365 token performance didn’t suit the risk management profile.
FLy cares about the community and to keep the community in profit, it stopped token distribution. To ensure the FLy community from losses, all USDT tokens that were participated in the IDO were unlocked.
Moreover, FLy Launchpad participators got an airdrop in $CFL365 tokens for free according to the FLy tokens amount in their wallet.
The FLy launchpad is risk-free, so the team doesn’t leave their community without refunds in case of bad project performance. All information about the IDO process is sent to the community through the FLy and BO Newsletter and official Telegram Global community channel.