The year 2021 has given rise to many IDOs spanning numerous categories and industries. Recent statistics by CryptoRank confirm two primary industries to pay attention to. Moreover, investing in an exchange token IDO is a far less lucrative option than most may think.
Overall IDO Metrics Are Promising
Many people wondered whether IDOs would ever be successful. After the shenanigans in the ICO industry, fundraising had gotten a bit of a bad reputation in the crypto and blockchain industry. Thankfully, IDOs prove to be far more legitimate than Initial Coin Offerings, even though investors still risk their money when making financial contributions. There is no guarantee of making money in this industry.
That said, the IDO industry has seen some interesting developments throughout 2021. There are now over five dozen platforms to conduct an Initial DEX Offering, which is more than respectable. Of course, some platforms will be far more popular than others, as there is always a degree of centralization in this industry. However, having more platforms providing this functionality is a good thing.
📣Review of 2021 Initial DEX Offerings
— CryptoRank Platform (@CryptoRank_io) December 28, 2021
Moreover, those platforms helped teams raise over $765 million in funding. That may seem low, but unlike ICOs, a significant share of IDOs do not seek to raise over $500.000. Of course, there will always be some exceptions on that front, but overall, IDOs are much more time-sensitive for investors looking to get in. Moreover, the projects raising millions of dollars will often opt for an Initial Exchange Offering rather than an Initial DEX Offering.
DeFi And Gaming Are Top Segments
There are a few industries worth keeping tabs on for those looking to invest in an IDO now or in the future. Both decentralized finance (DeFi) and gaming are the two primary industries to watch right now. They had 220 and 216 IDOs, respectively – per these statistics by CryptoRank – confirming all other industry segments are of less importance. However, there is still a need for blockchain services, infrastructure, marketplaces, trading solutions, etc.
More importantly, the top projects in these industries offered returns between 21x ROI and 124x ROI, which is more than respectable. However, the highest return on investment – so far- has been recorded by the Virtual Reality industry, despite only having 3 IDOs throughout 2021. There is always something outside of the norm worth paying attention to.
Even though raising $767 million is not spectacular, the tracked projects have an $18.7 billion market cap today. That is tremendous growth, indicating there is still much room for improvement and competition in the blockchain world.
Exchange Tokens Aren’t Doing Well
While there are dozens of exchanges and trading platforms to explore today, not all of them have a native token. Some projects use an IDO to issue tokens to early investors. As industry participants have seen potentially powerful exchange tokens in the past, they tend to make for a good investment on paper.
In reality, exchange token IDOs have not done too well throughout 2021. More specifically, their return on investment is rather low, with a maximum of 3.6x ROI. It is still an acceptable figure, although far less than a 50x – or better – on most other tokens. Similar to individual projects and protocols, not all exchanges will succeed in the long run. Even so, it may prove worthwhile picking up an exchange token Initial DEX Offering along the way, as one of them might pop off eventually.
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