IFO: Not the Opposite of UFO

The cryptoverse is ever-changing and what's new today may be a technology of the ancient world tomorrow. It just feels like yesterday when we read about ICOs, IEOs, and IDOs, and today I am bringing you another entity under this growing family tree, IFO.

What is IFO?

IFO stands for Initial Farm Offering, as I said earlier it comes from the family of the previous initial offerings. I guess by now, you have an idea about the initial offerings work. If not, you can revisit my article for a refresher: Initial Offerings: ICO, IEO or IDO?

Go ahead, don't be shy, click on it, and I'll wait for you right here.

Done?

Good.

If you are like me, who's too lazy to even open up another tab for another article, let me give you a TL:DR version of it. Initial offerings are fundraising events that are done by project owners so they can collect the funds they need to push a project forward. These projects of course come with their own tokens or coins. They will offer a portion of the coin's supply to early investors.

The main difference in this version of initial offering is that there isn't really a direct sale of the new tokens offered by the owners. Instead, users or prospect investors will have to add a liquidity pool first before they can get the token new tokens.

In the case of PancakeSwap, they are requiring users to add a liquidity in the pair of BNB and CAKE. The users will then have a BNB-CAKE LP token which they can then use to take part in the IFO.

After the event, the CAKE will be burned, the BNB collected, and the participants will get their share of the new tokens.

At least that's how I understand it. But I will clarify it again once I delved deeper into it, and maybe try it while at it. It sounds interesting to me because as they promise, IFO could yield good profits even to newbies in crypto. Aside from giving positive yield to newbie investors, IFO also gives an advantage to the project owners as well.

Even before their tokens are listed to any exchange or DEX, the token will have liquidity already, which means, instant liquidity for all holders of the token. They could already liquidate their assets even without waiting for them to be listed on any exchange. Isn't that just perfect?

So... that begs the question, what's the best type of initial offering when it comes to cryptocurrency?

Hmmm, so that's quite an excellent question, it's simple but it warrants a very complicated answer. I guess the short answer is: it depends. It depends on a lot of things and factors, as they say, case to case basis. It may also depend on which side you are on.

I mean, if you're a project owner, and you are looking for a quick score and planning to scam people, ICO will be the best option for you. You have control of all the assets collected and you can run away anytime you would like to.

If you are a newbie who isn't used to rugpulls and all those things, I think that IFO gives you a bit more sense of security. Because in that case, you aren't really holding the new token itself, you are still holding a BNB-CAKE LP token that you can pull out and break off anytime you would like.

So again, you really have to do your own extensive research before you decide to participate in any Initial offering, as you know, every project may take flight as much as they could deep dive down into the ground.

This is just me, and not at all a financial advice, I think that I would like to try this IFO thing when I get that chance, but as I checked earlier, PCS has no active IFO at the moment. And even if they do, I still don't have any significant amount of money that could garner a significant share of the liquidity pool. Maybe next time.

Hi!!!

Another day and another learning it is. I don't know why I wasn't able to include this one in the previous article but I think that this one's still fairly new so... yeah.

Also, I would like to thank you for visiting me again and I really appreciate every time you drop by.

That's it from me today until we read again...

Cheers!!!

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Series    : All About Crypto
Title     : IFO
Published : 07-Mar-2022
Author :  © RB

References:

C. (2021, October 21). Initial Farm Offering (IFO). CoinMarketCap Alexandria. Retrieved March 4, 2022, from https://coinmarketcap.com/alexandria/glossary/initial-farm-offering-ifo

What are Initial Farm Offerings. (n.d.). BSCNews. Retrieved March 4, 2022, from https://www.bsc.news/post/cryptonomics-initial-farm-offerings-explanied