Initial Farm Offering (IFO) helps DeFi projects raise capital through the farming feature offered by decentralized exchanges.
Investors can participate in a pre-sale event that is hosted by the DEX, raising the capital necessary for available projects by investing in native tokens. DEX teams usually prepare a proposed list of the most lucrative projects to launch in the farming event. However, it is worth considering that the tokens acquired via IFO have no clear advantage over those raised through other fundraising models. Despite proper scrutiny by the DEX teams, the value of the token can be affected by the market sentiments.
There are two common types of IFO events:
To be part of an IFO, the first step is to set up an account on any of the DEXs that support this feature. Users then stake CAKE or BNB tokens (according to the participation terms) to take part in the IFO. They must provide liquidity for the farming process. By the end of the process, those users are rewarded with such tokens.
The following are some benefits that could be enjoyed by IFO users:
Elimination of the middle-man. Peer-to-peer transactions are stimulated on the IFO platform, allowing users to save money in the long run even if they are novices in the world of crypto.
IFO maximizes the benefits of trading on DEXs, especially for those who are new to crypto.
Project fundraising is safe via IFO platforms because of the dual-margin intention.
The decentralization keeps all the transactions and activity transparent for users and investors.
Like all other fundraising events, it is better that each user research the one that suits them the best. However, do your own research properly before investing in any token and keep the factor of volatility in mind. The preceding fundraising models, especially ICO, were heavily reliant on VCs, which meant greater time consumption and unreliable gains. However, being relatively new in comparison to ICO and IEO, some users might not be confident about opting for IFO — but the trend of DeFi may tilt the focus of the market towards IFOs.
Join the thousands already learning crypto!