By Hassan Mehmood (Saudi Arabia)
In the early days of finance, there was only the stock market, later on, the foundation for the forex market was kept, and now years later, we have got a crypto market. It is an abstract fact of financial markets present at the moment that they have encompassed the attention of millions of people around the world and not only individual traders but financial enterprises and organizations of utmost standing.
Whenever a company is performing outstandingly in terms of its financial profile, it tends to take a portion of its business public through an initial public offering or IPO so that people can interact with the current offerings of the business. Such as they can invest in them and gain profit as prices reach a certain level or get regular dividends for the investment they have made within the company in question. This is just how things work in the conventional sense of the word ‘initial public offering’ and within the stock market, but the forex and crypto markets are not so different at all.
The forex market relies on the present cash volume of a dedicated country or the fiat currency the country is entertaining at the moment. It is an active market where people can buy specific currencies from all across the world and continue to chip them in whenever the price of a certain currency rises and buy certain currencies whenever the price is lower.
This is basically how the forex market works; with that being said, both the stock and forex markets are extremely volatile entities, but these are nothing compared to the crypto market. In the crypto market, people rely on the prospect of an initial coin offering or an ICO, where a company puts out its digital assets, such as tokens, to the public so they can generate enough revenue to kick start the next phase of its mission or strategy at hand which is to go public.
But with the certain adoption levels of decentralization and blockchain technology hitting all-time highs, there is now a new offering system in place that is known as initial game offering or IGO, and it has gained immense popularity among crypto investors. The IGO allows you to be able to pre-purchase a dedicated NFT for a specific blockchain game entity even when it is in the early developmental stages.
Future of IGOs
IGOs can be organized through launchpad platforms as multiple aspects of this specific offering needs to be controlled from the get-go, especially because the final product for which this offering has been commenced is not even ready and remains in the earliest developmental stages. Traditionally if you are using launchpads to invest in a dedicated IGO, then you are required to lock away a native token of that platform for a certain period of time.
At the end of the day, it depends on the project in question, but participants can usually have earlier access to the NFT elements and programs of the game. Sometimes the tokens that you acquire for a dedicated game can be traded even out of the gaming ecosystem for which it was developed, such as on decentralized exchanges and other marketplaces. This is an extremely viable and potential element that gamers are extremely interested in at the moment.
Think of the possibility that you get earlier access to native tokens of a decentralized game that is about to be launched, and having the access means you can literally sell them at a ginormous value into the future; when that game comes out, the hype is just beyond control. At the end of the day, whatever investing strategy or offering you run into is going to have about the same specifications or attributes. You buy something, you hold on to it for a dedicated period of time, and when the price is right or near to what, you are ready to slip that entity to make the trade, cash in the profit, and go your own way. The prospect of an IGO, ICO, and IPO are closely related to each other and are not at all different whatsoever.
How does an IGO Work?
As stated earlier, the initial game offering is an abbreviation of IGO, and it is a practical method using which multiple blockchain gaming projects out there are able to raise capital for either the development of the game or maintenance of core computing elements so that users can continue to enjoy the beautiful work of art that developers have created for them.
Most often than not, an initial game offering is to be made available in the early days of the project because the very purpose is to collect as much capital as could be collected beforehand so that the later stages of the project can be completed without any financial hassle. In the event of the launch of an initial game offering, it is almost like an initial coin offering, but it doesn’t offer crypto tokens at the end but NFT tokens made available by the developers, which belong to a specific game about to be launched on a decentralized platform.
Initial game offering participants can also get earlier access to in-game assets such as new weaponry, new skins, and or multiple levels that are not yet available to the public. You get to become a beta tester of new things and elements that developers are working on and will be bringing in for the majority of people only when the initial run is successful. But for that to happen, you have to invest in the IGO of a decentralized game. In most cases, even after the game is finally developed and live, NFT tokens might be required to either access or play the game.
It is going to become the new cash alternative for modern gamers that rely on blockchain technology and want to enjoy decentralized gaming. There are multiple launchpads regarding initial game offerings that are currently available on the market, such as Binance NFT, BSCPad, TrustSwap, and many others. Multiple launchpads out there have different settings in place, but the core of each of these launchpads is going to be the same, which is that users must invest a certain portion of their finances to purchase the native token of a launchpad platform to be able to participate in the future endeavours made available by the launchpad in question.
Other than that being an investor, they must also be holding a certain amount of these tokens within their wallets to be able to participate within the likeness of the game in question; otherwise, their entry will be restricted. So only buying the initial game offering tokens is not going to be enough; you have to hold these out for a certain period of time to be able to become eligible to participate in or play the decentralized game. Another way of looking at this whole scenario is that you get to lock these tokens in a certain pool for a particular period of time.
There is an algorithm in place which cross-verifies the number of initial game offering tokens stashed away by the investor along with the total time frame to give them an appropriate chunk of project tokens or NFT. NFT is not like your conventional crypto market scenario, where anyone is welcome to invest as much money as they want to without having to lock anything away. There is a subscription mechanism in place for various launchpads out there which select the reward winners. This is to ensure that each and every participant out there can get vital exposure and an equal opportunity to acquire the NFT assets from the dedicated initial game offering project. When it comes to the trading of these NFT assets to off-market channels, some of the time, the user might have to hold off or stake these hefty tokens before they can be traded onto the market.
What is the Difference between IGO, ICO, IEO and IDO?
As stated earlier, an initial game offering is the most recent in a long lineup of fundraising methods already in place and used by multiple markets out there. Some of the most common ones are ICO, IEO, and IDO, which are used along with IGO within the crypto market so that the project in question could raise some capital from it.
The ultimate purpose of all these fundraising methods is the same, which is to raise capital, but the way these are able to achieve this is completely different concerning the fundraising technique that you take into account. Following is a brief introduction of each of these fundraising methods and the possible differences that these have from each other.
- ICO
Initial coin offering remains still, to this date, the very first fundraising approach that was used in the crypto market. It was relatively an elaborative approach that found its significance in IPO or initial public offering, a fundraising technique that is used in the stock market. ICO allows multiple blockchain-based projects to be able to raise funds through the issuance of their own tokens as people continue to invest their money into these attributed coins for the sake of seeing immense capital drawn towards them when the project is final and has hit the crypto market.
Ether, an altcoin, remained the first-ever cryptocurrency to ever use the ICO technique back in 2014, and it continued to use this very approach until early 2018 for the effective development of the blockchain for Ether along with multiple other essentials. If a crypto project is underway or in development and wants to ensure that the final deadline is met with enough time to spare, then going with the initial coin offering should be their first choice regarding the procurement of financial support.
Interestingly enough, even if the crypto project has not thought of going for an ICO to procure funds in the early development stages, they can opt for an ICO after the development of the project to ensure its maintenance and sustenance over the years.
- IEO
An initial exchange offering is also a fund procuring system designed by crypto exchanges so that they can launch their own tokens while getting the people out there to invest their money into the project even before it gets completed. The major difference between initial exchange offering and other multiple offering systems out there is that it is not hosted directly by the crypto project team in question but takes place within the decentralized exchange.
It means that a third party crypto exchange is in charge of having an initial exchange offering tokens, and drafting a partnership between these reputable crypto exchanges would help not only the crypto project in question but the participants who deemed it fit to invest their money into one of these initial exchange offering tokens. As we are talking about a crypto exchange, the projects that are entitled to get a slot for being hosted at a crypto exchange undergo rigorous reviewing and testing before they can finally be handed out the green light. This is to ensure that the project has some kind of scope for being current and trending within the crypto market even after its launch. This helps the crypto exchanges to filter the inorganic and built-up hype away from the original acceptability of the project within the crypto market in the upcoming years.
An initial exchange offering is a more significant way for crypto projects to be able to increase their reach not only to the people who are interested directly in the project but crypto exchange’s extensive user base that come there for getting exposure to other new tokens and coin offerings within the crypto market.
- IDO
An initial Dex offering is the same as an initial coin offering, but the only difference is that an IDO is hosted directly on a decentralized exchange. This was a model which got introduced way after the emergence of ICO and initial exchange offering models, original purpose behind this model was to tackle the shortcomings of both ICO and IEO fund generating models. If the crypto project goes forward with the initial Dex offering, then they can significantly decrease the hosting fees which they would have to pay in terms of ICO and or initial exchange offerings.
Another great advantage of going with an initial Dex offering is that both the project officials and people who have invested their money into the project token can get abrupt token liquidity which means that as soon as an initial tax offering is complete, you can list your tokens to any crypto exchange that you prefer and get money for those. Whereas in the case of ICO or other multiple fund generating systems, the user would have to stake their tokens for a dedicated period of time before they are able to do anything with them, such as liquidating these or chipping these in for a handsome return on investment.
You would be amazed to know that the new crypto projects in town are trying their best to get their hands on an initial Dex offering because of the fact that there is no rigorous due diligence process at hand because these are already going to be listed on decentralized exchanges. Unlike initial coin offering systems and initial exchange offerings, where rigorous reviews are taken into account before allowing a project to be hosted directly on the crypto exchange, the initial Dex offering systems don’t have to go through a similar screening making the procurement of an initial Dex offering easier and more subtle in the long run.
Just when it seems that the initial Dex offering is the ultimate thing to go for, there comes a few shortcomings that might blow you up for good. Because there is no due diligence or rigorous screening in question, the final initial Dex offering projects might have below substantial quality or questionable reputation. These might come out as illegitimate tokens that are not allowed to be listed on any exchange or traded actively among crypto users because of the project coming out to be an elaborative scam scheme and the original developers running away with the funds of the investors.
However, this type of news is hard to come by, but it still puts a question mark on the overall idea of going with an initial Dex offering. If you come across a crypto project that is hosting an initial Dex offering rather than going with an initial coin offering system or even an initial exchange offering, then you must get a bit speculative and try to understand if the project in itself is legit or not.
How to Participate in IGOs?
Just like any other security and crypto-token in question, the initial game offering tokens doesn’t have any guarantee that these will become a profitable endeavor in the long run. That is why before committing yourself to such a project, you must do your own research and calculate the potential risks associated with the whole thing. There are a few things that you can do, such as checking out the website and or social media of the gaming project in question to see if there is a proper and concise plan and or development road map that you can consult with to understand just how much time it would take for the project to get before the public.
You can also investigate if the project has any reputable investors or partners that are backing the whole thing up, and if you don’t find anything leading to strengthening your belief within the project, then it is suggested that you look for some other initial game offering project that might be worth your time.
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