Introducing Initial Liquidity Offerings
A revolutionary new way to raise funds on Ethereum.
Fundraising in the existing financial world is extremely difficult; There are huge barriers to entry for new companies wishing to list their stock on an exchange.
In 2017 that all changed when Initial Coin Offerings (ICO’s) became mainstream. Fast forward 3 years and and another invention came along — An on chain automated market maker. With this invention any asset could now be traded on Ethereum in a cheap and efficient way.
Utilizing both creations, we can create an even better way to raise funds; Initial Liquidity Offerings.
Here’s how it works. Creators of the Initial Liquidity Offering (ILO) deposit some tokens into the ILO contract and select a price at which they want to sell their tokens for. Users can send their ETH to the contract and receive tokens when the sale ends.
Okay that’s great but here’s the real innovation — After the sale ends a portion of the ETH raised will be locked as liquidity in the relevant swap exchange. Owners will be able to withdraw this liquidity after the unlock date has passed. In doing this, investors can be sure that they won’t get “rug-pulled” and creators are incentivised to uphold the value of the token for at least as long as the funds are locked in liquidity.
Matching the investors needs
By creating such a friction-less way to raise capital, investors will be greeted with a problem — Filtering out legitimate projects from illegitimate/low quality ones. This problem can be seen in the industry at large too. The amount of ERC20 tokens that gets created each day means that researching all of these coins is a full time job for investors and filtering out the good ones becomes pretty difficult.
Wouldn’t it be great if you could automatically filter the highest quality new projects (so called “gems”) and then choose from them to invest in?
Good news. We have a solution.
The fundamental problem is in removing spam. It turns out Reddit has already solved this problem. By applying the same algorithm that Reddit uses, we can filter the highest quality projects and show them to investors.
How does this work? Simple. We provide you with a “Hot”, “New” and “Top” filter option. The “Hot” option applies Reddit’s algorithm to ILO’s in order to rank them such that the amount raised in the ILO is equivalent to votes and then we deduct a time score. Simply put, the older an ILO, the lower it ranks and the higher the amount of ETH invested, the higher it ranks. We balance these two scores to get a total, and this total determines the overall ranking.
This allows us to show the “Hottest” up-and-coming coins to investors and take the burden of research off of their shoulders.
Additional Details
To cater to the needs of each individual fundraise, a variety of custom options are supported. There are different sale types, namely, Dutch Auctions and Fixed Price (in the future, more sale types will be added), custom soft caps, liquidity unlock dates, amount of liquidity to lock and more.
0.9% of all funds raised will be used to buyback IFEX tokens which will then be distributed to all IFEX holders.
