An independent examiner has revealed shocking details surrounding the inner workings of Celsius – a crypto lender that filed for bankruptcy in July 2022. The examiner claimed that Celsius did not operate by the business model that it presented to customers. He likened it to a Ponzi scheme, much like FTX – a company that happened to have used the same accounting software: QuickBooks. The Truth About CEL Token Per a filing from examiner Shoba Pillay on Tuesday, Celsius had…
What is an Initial Liquidity Offering (ILO)?
Initial liquidity offerings (ILOs) are a form of fundraising that combines elements of initial coin offerings (ICOs) and initial exchange offerings (IEOs). Like ICOs, ILOs involve the sale of a cryptocurrency or token to investors, but unlike ICOs, ILOs are conducted on a decentralized exchange (DEX) rather than on a proprietary platform.
ILOs are typically backed by a cryptocurrency exchange, which helps to provide liquidity and ensure the smooth functioning of the market for the newly-issued token.
Here is a step-by-step guide to conducting an ILO:
- First, develop a business plan and create a white paper outlining the details of your project, including the problem it aims to solve, the technology behind it, and the use case for your token.
- Identify a decentralized exchange that is willing to host your ILO. This may require negotiating listing fees and other terms.
- Create a smart contract for your token on the Ethereum blockchain. This will require programming knowledge and may involve hiring a developer.
- Set up a wallet to receive funds from investors. This can be a software or hardware wallet such as a Trezor or Ledger Nano.
- Promote your ILO to potential investors through social media, online communities, and other channels.
During the ILO, investors can purchase your token using Ether (ETH), Binance Coin (BNB), Stablecoins, or other cryptocurrencies. Then, the DEX will automatically execute the smart contract and distribute the tokens to investors’ wallets.
After the ILO, the tokens will be tradeable on the DEX, providing liquidity to the market. Therefore, it is important to continue promoting your project and engaging with your community to maintain interest in your token.
The Most Successful ILOs
The success of an ILO can be subjective and depend on various factors such as the size of the raise, the performance of the token in the market, and the project’s overall success.
Some examples of high-profile ILOs that have received significant attention include the following:
- The ILO for Yearn.finance, which took place on the Uniswap DEX in July 2020 and raised $7 million in just a few hours. Yearn.finance is a decentralized finance (DeFi) protocol that allows users to earn interest on their cryptocurrency holdings.
- The ILO for Mirror, a decentralized prediction market platform, took place on the UniSwap DEX in December 2020 and raised $1.5 million in just a few minutes.
- The ILO for Aave, a DeFi protocol for borrowing and lending, took place on the UniSwap DEX in November 2020 and raised $3 million in just a few hours.
The Risks of Investing in ILOs
Like initial coin offerings (ICOs) and initial exchange offerings (IEOs) or any other crypto fundraising form, ILOs can be high-risk ventures, and there is no guarantee of success.
Some of the risks are:
- Lack of regulation: The cryptocurrency market is largely unregulated, making it difficult for investors to protect their rights and seek recourse if something goes wrong.
- Lack of information: ILOs may not be subject to the same level of disclosure as traditional securities offerings, making it difficult for investors to understand an investment’s risks and potential rewards fully.
- Volatility: Cryptocurrencies are highly volatile, and the value of your investment could fluctuate significantly over time.
- Fraud: There have been instances of fraud in the ICO and IEO markets, and there is a risk that ILOs could also be used to defraud investors. It’s important to carefully research the team behind an ILO and be wary of any red flags.
- Lack of liquidity: The market for a newly-issued token may be illiquid, making it difficult to sell your investment if you need to.
- Technology risk: The success of a project may depend on the development and adoption of new technologies, which can be uncertain.
Remember to do your research and carefully consider the risks before investing in an ILO. It’s worth noting that ILOs, like ICOs, IEOs, and STOs, are high-risk ventures, and there is no guarantee of success. So do your due diligence and carefully consider the risks before participating in any ILO.
An Overview of Different Cryptocurrency Scams
Cryptocurrency scams are fraudulent schemes that are becoming increasingly common as the popularity of cryptocurrencies continues to grow. They can take many forms and are often designed to appear legitimate investment opportunities or exchanges. Unfortunately, these scams can cause significant financial losses for individuals and harm the reputation of the cryptocurrency industry as a whole. It is crucial for anyone considering investing in cryptocurrencies to be aware of the various types of scams and to take steps to protect themselves.…
What Are Crypto Data Aggregators?
Crypto data aggregators gather data from multiple sources to provide comprehensive and real-time information about the cryptocurrency market. They pull data from various exchanges, trading platforms, and other sources to centralize the information and present it in a user-friendly format. The data includes cryptocurrency prices, trading volume, market capitalization, news, and other relevant information. Crypto data aggregators use algorithms to clean, process, and normalize the data to ensure accuracy and consistency across multiple sources. The information is then presented in…
What Is CoinGecko?
CoinGecko is a cryptocurrency data aggregator and tracking platform. It provides information and insights on the cryptocurrency market, including price, volume, trading activity, developer activity, and community growth. How CoinGecko Works Data Aggregation: CoinGecko collects crypto data from various cryptocurrency exchanges, wallets, and blockchains to create a comprehensive database of cryptocurrency information. Calculation of Metrics: CoinGecko calculates several metrics, such as market capitalization, trading volume, liquidity, and community growth, to provide a comprehensive overview of the cryptocurrency market. Display of…
What Is CoinMarketCap (CMC)?
CoinMarketCap (CMC) is a website that provides information about the cryptocurrency market and tracks the capitalization of various cryptocurrencies. It was founded in 2013 and has become one of the most popular cryptocurrency data providers. CMC aggregates information about the prices, volume, and market capitalization of cryptocurrencies from various exchanges and calculates the average value. Furthermore, the website displays this information in real-time, giving users a comprehensive overview of the cryptocurrency market. CMC tracks over 22,000 cryptocurrencies, including Bitcoin, Ethereum,…
What Are Crypto Pyramid Schemes?
A crypto pyramid scheme is a fraudulent investment scheme where returns are paid to existing investors from funds contributed by new investors. It's called a "pyramid" because it typically has many new entrants at the bottom, with each layer representing fewer investors. Example: John starts a pyramid scheme and invites five friends to invest 1 Bitcoin each. John promises to return 2 Bitcoins to each participant in a month. John needs 10 Bitcoins to fulfill his promise, so he invites…
What Is a SAFE (Simple Agreements for Future Equity) in Crypto?
Simple Agreements for Future Equity (SAFE) is a financing instrument used in the crypto and start-up communities to secure early-stage funding without giving up ownership or control. A SAFE is a contract between a startup and an investor that promises the investor a certain amount of equity in the company in the future in exchange for a direct cash investment. The terms of the SAFE, including the valuation of the company and the equity to be received, are agreed upon…
What Are Crypto Institutional Investors?
Crypto institutional investors are large financial institutions that invest in cryptocurrencies, such as Bitcoin and Ethereum. They play a crucial role in providing stability and growth to the crypto market, helping to bring more mainstream recognition to cryptocurrencies as a legitimate asset class. Crypto institutional investors typically comprise large investment banks, hedge funds, pension funds, and endowments. They bring significant resources and investment expertise to the crypto market, providing the liquidity and capital required for the market to grow and…
What Is Automated Crypto Trading?
Automated Crypto Trading is a type of trading that uses software programs to automate the buying and selling of cryptocurrencies on the market. It uses algorithms to analyze market data and execute trades based on predefined strategies. The software can be programmed to scan the market and make trades based on specific conditions, such as price changes or trends. It also allows for backtesting and optimization of trading strategies. In addition, the trades are executed automatically, reducing the need for…
What is Genesis Mining in Metaverse?
Genesis mining in the metaverse refers to the initial creation and distribution of virtual assets within a virtual world or metaverse, such as virtual real estate or virtual currency. The creators or developers of the metaverse often control this process. It may involve using blockchain technology to ensure the security and integrity of virtual assets. The term "genesis mining" describes the initial creation and distribution of these assets, similar to mining for precious metals or other resources in the physical…