Among crypto investors, the concept of Initial Game Offering (IGO) has been gaining popularity with the rise of GameFi. By participating in an IGO, investors are allowed to pre-purchase NFTs or tokens for a blockchain game in its early development stage.
Launchpad platforms are commonly utilized for organizing IGOs. Generally, investors are required to lock the platform’s native token for a specific duration when investing through launchpads. By participating, investors can gain early access to the game’s tokens or NFTs based on the project. In certain instances, tokens and NFTs obtained from IGOs can be traded on decentralized exchanges and NFT marketplaces outside of the gaming ecosystem.
How Does an IGO Work?
To raise capital, blockchain gaming projects have started using IGO, a similar method to Initial Coin Offering (ICO) that provides early access to in-game assets. These assets include characters, skins, weapons, and accessories, and are often NFTs that players need to access or play the game.
Several IGO launchpads are available, such as TrustSwap and EnjinStarter, each with different requirements for participation. Participants must lock the required tokens in a pool for a specific period before receiving the project's token or NFTs. The IGO Platform uses a subscription mechanism to select reward winners, ensuring equal opportunities for all participants to receive the NFT assets from the IGO. In some cases, participants must hold or stake the purchased gaming token or NFTs for a period before they can trade them on the market.
Differences Between IGO, ICO, IEO, and IDO
Crowdfunding has become a popular fundraising method in the crypto world, with various options available. ICO, IEO, and IDO are three commonly used methods.
Initial Coin Offering (ICO)
ICO was the first method used to raise funds through the use of cryptocurrencies. Projects in their early development stages could gain financial support through ICO events. Although it was popular until early 2018, the ICO method has certain differences in the way they operate.
Initial Exchange Offering (IEO)
IEO, on the other hand, is not hosted by the project team directly but within a cryptocurrency exchange, which helps to increase the reach of the project team. The Binance Launchpad is a popular IEO platform that hosts projects after rigorous review.
Initial Dex Offering (IDO)
IDO is similar to ICO, but it is hosted on a decentralized exchange (DEX). IDOs can provide immediate token liquidity and lower costs for projects to get listed compared to IEOs. However, due to the lack of a rigorous due diligence process, IDOs are considered riskier than other options. It's essential to be careful with rug pulls, as many IDOs have turned out to be scam projects that run away with investors' funds.
The use of IGOs has brought about fresh prospects for game developers looking to finance their projects using blockchain technology. Although IGOs offer an opportunity for early-stage funding, they also pose significant financial risks for investors. To mitigate these risks, it is essential to exercise caution and perform thorough due diligence before committing any funds to an IGO. It is also recommended to check whether any well-known investors or partners are supporting the project, which can provide an additional layer of reassurance.