A Safer Way of Investing in IDOs with Priority Projects by@cryptobadger

A Safer Way of Investing in IDOs with Priority Projects

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Participating in launchpads is one of the best ways of being early to crypto projects. And being early often is key to making big profits. Of course being early also means an elevated risk - you're investing in a startup at a very early stage. Priority Projects can reduce this risk as only solid projects will meet all necessary requirements.
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Crypto Badger

Not an actual badger ;-) Dedicated to helping people learn about the world of crypto.

Crypto space can be sometimes challenging to navigate, especially for newcomers. If you’re not careful, you can easily lose money in this space. That’s why I always welcome projects which reduce the risk and provide some structure… I suppose you could say they ‘regulate’ the crypto space to some degree, which is always a bit controversial when it comes to crypto but let’s be honest – we are not going to reach mass adoption without at least some degree of regulation.


One of the most profitable types of crypto investing are IDOs – Initial Dex Offerings (if you’re not familiar with them, you can check out my previous articles here and here). But investing in an IDO is essentially investing in a startup, which of course involves a huge risk. One of launchpads – Kommunitas – came up recently with a very interesting way of reducing this risk. They’ve created something they call Priority Projects – projects that agree to and pass more stringent (than a typical IDO) criteria, the team is KYC and the funds are released 48 hours after a successful listing of the token.


Here are other Priority Project requirements:


  • The project will have to send the full amount of tokens to our vesting contract prior to TGE to lower the risk of vesting delays.
  • The funds raised will be released to the project according to the vesting schedule. For example, if a project vests 15% of the tokens every month, Kommunitas will only release an equivalent percentage of the funds to the project at least 48 hours after each vesting.
  • If the price of the token falls below the IDO/Sale price before 50% of the tokens have been vested, Kommunitas will urge the project to perform a token buyback or large marketing campaign. If it fails and the price of the token is under IDO price for 3 consecutive days, Kommunitas will provide an option for refunds for the remaining allocation to investors.
  • The project will have to provide liquidity in a 1:1 ratio in relation to its Initial Market Cap (IMC). For example, if a project has an IMC of $500k, it will need to have $250k of liquidity in USD + $250k of liquidity in the token.
  • The liquidity of the token will have to be locked with a reliable third party (e.g. DxLock). The Team’s tokens will have to be locked up according to the vesting schedule. This includes any and all tokens for marketing, advisory, etc.
  • The token’s contracts will need to be audited by a dependable audit firm, to prevent any vulnerabilities or intentional loopholes in the code.
  • The listing date of the token must be within 14 days of the IDO And Kommunitas reserves the right to provide refunds if the listing is postponed.


If the project fails to meet any of the requirements listed above, the launchpad has the right to refund all the funds raised from the community. This way Kommunitas significantly reduces the risk for anyone wanting to participate in these IDOs.


To sum it up, if you’re relatively new to crypto and especially IDOs, participating in Priority Projects might be a good place to start. And even for more experienced users, it’s still a good option as investing in these projects should be less risky.


Disclaimer

The content covered in this article is NOT to be considered investment advice. I’m NOT a financial adviser. These are only my own speculative opinions, ideas, and theories. Do NOT trade or invest based purely upon the information presented in this article.

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