Launchpads for IDO sales are still a key source of fundraising for small-scale and even medium-range projects. In August, several platforms showed an inflow of new projects, keeping the pace of demand.
IDO sales through launchpads have not disappeared, despite new tools to immediately launch meme tokens. The IDO model proved viable for small-scale startups and even medium-range rounds, raising funds similar to seed rounds but also securing a wider distribution of tokens.
The IDO model now makes up above 76% of all public token sales, where the ICO direct sale shrank to 2.3%. Direct exchange sales make up the remaining public sales, often linked to decentralized markets with liquidity pools. IDO sales also hinge on the availability of a platform, which has pre-screened users, saving each projects funds on separate KYC.
Based on CryptoRank data, the DAO Maker platform was the most successful, raising $2.46M for the month of August.
IDO platforms often carry risky tokens, so their final returns are relatively small on average. Yet IDO tokens often achieve significant returns, especially for hot narratives. IDO sales also pre-screen projects for potential rug pulls.
Token sales are also shifting the balance of platforms. The most recent new tokens aim for a Gate.IO, MEXC and Bybit listing, displacing previously hot exchanges. As usual, an immediate Binance listing is almost impossible to achieve, save for the most high-profile, vetted projects.
IDO remains a viable alternative, but buying slows down in August
In August, the total IDO market slowed down along with the general correction of prices and a loss of enthusiasm. In total, the platforms still drew in 70 projects, raising $19.4M. For 2024, the IDO peak happened in January, when projects raised $213M. IDO sales remained above $100M for some of the months in 2024, only slowing down in July and August.
The monthly performance may hinge on particular projects, as well as the plans of a platform to host large-scale IDOs. Over time, platforms show a varied performance for their projects, hinging on overall exposure and liquidity. Binance remains the most reliable launchpad, due to the more easily provided listings.
IDO categories are also slightly different compared to VC-backed projects. The biggest categories are still user-facing GameFi and DeFi, along with a slim share of crypto social media. NFT were the least-active category in IDO sales.
Most of the public rounds were raised for projects on Ethereum, Solana, and Binance Smart Chain (BSC). Coinlist, Fjord Foundry and Tokensoft are the most liquid platforms in historical terms, raising more than $2.7B in total. Oxbull, Ape Terminal and Bounce had the biggest ROI achievements for the past two years, and PancakeSwap was a short-term winner due to its immediately available liquidity.
In September, a total of 16 IDO projects have set up dates to launch. The target fundraising ranges between $40K and $4.15M, depending on the project’s scope. IDO platforms target more varied investors, unlike early-stage ICO that mostly collected ETH and BTC for their treasuries. IDO-based projects may also move on to secure rounds of VC funding.
Funding rounds return to crypto startups
While IDOs show some outflows, VCs are back with funding rounds. In the past 30 days, new seed rounds reached $920M, an expansion of 69.4% month-on-month. More than 115 rounds were completed in the past month, as VCs singled out more projects compared to IDO launchpads.
Rootdata points to $758M in funding rounds for August, in a total of 115 deals. Overall, funding is more targeted in 2024, and coming from some of the bigger crypto insiders. Skeptics about VC funding see it as a tool to bring new projects and tokens, aiming to extract value from the market. VC funding does not necessarily increase available liquidity, and may in fact compete for inflows from investors.
The main focus of VC funding is still AI, spilling over into blockchain-based projects. Overall VC funding outside crypto is also focused on AI applications.
Among the top rounds in the past 30 days were Chaos Labs, raising $55M. Story Protocol now has access to $80M, while SaharaAI raised $37M. Eight additional private placements and funding rounds were closed since the start of September. Accounts on VC funding differ based on disclosure and project tracking, but overall crypto funding is still breaking away from its two-year lows since 2022.
Cryptopolitan reporting by Hristina Vasileva
