A strong holder offering (SHO) is a fundraising mechanism where eligible investors are chosen based on their on-chain activities and other proprietary data sets.
A strong holder offering (SHO) is a fundraising mechanism where eligible investors are chosen based on their on-chain activities and other proprietary data sets. Notably, a Strong Holder Offering enables a project to attract funding from individuals who are holders of a given cryptocurrency. An SHO model targets public investments and is a product of DAO Maker
, which heavily uses it to help launch new projects in the crypto space.
An SHO can be open to people who have held a competitor coin for six months or to active liquidity providers on a decentralized exchange (DEX)
. In addition, an SHO may focus on individuals with a transactional volume of more than $5 million in the last month.
The framework generally benefits not only a crypto project but also investors who have “strong hands,” or those who can hold on to a coin for extended periods of time. DAO Maker incentivizes investors with strong hands by choosing them as participants of an SHO while also offering them protection.
However, the crowdfunding model also allows participants to seek refunds should they want to withdraw support since DAO Maker’s update on the offering. SHO has already been renamed to refundable Strong Holder Offering (rSHO). Note that the right to a refund expires if the value of the token issued by a project during the initial Strong Holder Offering increases and holds at 400% for 120 days.
Furthermore, DAO Maker subjects a project to a series of tests before opening the door to an SHO
. In doing so, only a few startups can offer the service in 12 months, which means that only projects that can stick to their roadmap would dare to apply, consequently discouraging scammers and low-quality startups.