Earning from ICOs and IDOs in 2024: Strategies and Insights
With the onset of 2024, the crypto scene saw a notable surge in the popularity of Initial Coin Offerings (ICO) and Initial DEX Offerings (IDO), thanks to a bullish trend in the market. However, merely being in the right place at the right time isn't sufficient for success.
Coinlist, a cryptocurrency platform, launched four notable token sales between December 2023 and January 2024, featuring crypto projects BitsCrunch, Nibiru, zkLink, and Subsquid. IDO launchpads followed suit, regularly introducing several new tokens each month.
The most successful was the cryptocurrency token Satoshi EVM (SEVM). Its IDO on Ape Terminal priced each token at $0.05. As of this writing, the current asset value is $8.4, meaning a 167x return for investors. If considering its All-Time High (ATH), the coin value increased 293 times post-IDO!
An important aspect of analysis should include specific cryptocurrency exchanges that have announced the listing of the respective token. Although this information is not always available prior to the token sale, its public disclosure can provide valuable insights into the project's liquidity and popularity prospects.
Let's delve into the potential of token sales in 2024 and revisit the approach for evaluating projects from an investment standpoint.
2024 Token Sale Stats
According to Cryptorank, a total of 32 token sales took place in 2024. Nine were conducted in the form of token sales on centralized exchanges (IEO), four initiated on ICO platforms like Republic and Coinlist, and 19 events were public sales preceding listings on decentralized exchanges (IDO).
Token sales that took place in January 2024. Source: Cryptorank.io
Not all projects made it to market. However, among those that successfully listed, the data shows:
- 13 projects yielded profit for public investors;
- 10 projects broke even;
- 9 projects incurred losses or failed to launch.
The IDO allowed users to invest up to $100, resulting in profits between $15,000 and $29,000.
Details of the SatoshiVM IDO on APE Terminal. Source: Cryptorank.io
Such high return figures in crypto projects are rare. However, with proper risk management, working with IDOs can consistently yield positive results.
Upcoming ICOs and IDOs of Interest
Several appealing crypto projects are slated to enter the market soon, available for pre-listing purchase through token sales. Among the most notable are Nibiru's ICO on Coinlist and Themis (TMS) IDO on DAO Maker.
Upcoming exciting token sales. Source: Cryptorank.io
These projects are appealing from an investment standpoint due to their low initial capitalization and the specific nature of the launchpads (Coinlist and DAO Maker are known for outstanding return metrics).
As for other launchpads, their overall ratings fall short, underlining the necessity for a more meticulous selection process when opting for crypto projects to partake in their IDOs.
Analyzing Crypto Projects
Analyzing the IDO you wish to partake in should include evaluating:
- Launchpad type. Cryptorank provides comprehensive statistics for all IDO/ICO/IEO platforms, including profitability metrics, total number, and frequency of token sales. This data gives investors a statistical perspective on the likelihood of a successful sale;
- Project assessment. This involves analyzing the starting capitalization and Full Diluted Valuation (FDV). Overly high figures can cast doubt on a project's potential. Comparing these figures with direct competitors, if any, is also beneficial;
- Token sale metrics. Review the number of tokens distributed during the TGE (Token Generation Event). If it's less than 10%, the token sale's attractiveness is questionable: breaking even would require a more than 10x return, which is not always feasible;
- Tokenomics and funds raised. If a project raises excessive funds in investment rounds, it means private investors will have many coins to sell on exchanges, creating price pressure and making it harder to profit.
Lottery or Guaranteed Allocation?
Token sales are usually conducted in two formats: a Whitelist lottery or allocation for specific actions (like holding or staking launchpad tokens).
Platforms like Polkastarter, GameFi, and DAO Maker require staking tokens of $1000β$5000, which can be substantial sums for most investors. The risk of losses due to the fall of the launchpad token can exceed the profits from the IDO.
To hedge risks, practice parallel staking, where short positions are opened against the locked IDO asset. This approach can balance potential losses with profits from the short position, maintaining a neutral overall user balance.
Conclusion
The ICO/IDO boom is still maturing, providing time for careful preparation. Thoroughly analyze promising projects, acquire coins from chosen launchpads, and study staking conditions for desired allocations.
