I have been searching for information in the Algorand Ecosystem on the processes need to launch a successful ASA Token sale and project. I can only find information about the developer aspects of this process which I am well acquainted with, i.e, using SDKs and/or goal cli, they are perfectly done on the developer docs. However, I am struggling with figuring out how I would for example, do an IDO on Yieldly, AlgoDEX, or on any other platform on Algorand in order to get liquidity for an already issued ASA, and what I would need to do that. Also, how would the infrastructure for a successful ASA token sale look like? Also, is it possible if tokenomics was also a topic in the Algorand discussions, both tokenomics on ALGOs and on other ASAs if possible? Thank you.
I wrote a short post on Liquidity Pools, which may be helpful. I think you are asking great questions, but they are incredibly complex to answer because they are very fact dependent. Moreover, the way you are thinking about these technologies appears to be problematic from both a cost-efficiency and risk-benefit perspective.
Generally, you would likely be better from a business standpoint to stay away from an IDO or a token sale and instead pursue a liquidity pool on TinyMan or work with a centralized exchange. It is good practice to stay away from strategies associated with terms like IDO and token sale because they come with regulatory and legal scrutiny. These types of financial technologies and instruments are also highly susceptible to fraud. There are many other considerations you must take account of and validate as well, some of which I wrote about in my Essay, Cryptosecurity.
That said, I am really excited about the TinyMan launch and I do think it will create a great deal of value for both ASAs and the Algorand Network more broadly.
Hello @bhaney44, how would the mechanics of the price discovery process for an ASA work with a liquidity pool on an exchange like Tinyman? And is it ideal to use a DEX even if you don’t want to list the ASA on an exchange?
Good day bhaney44
So sorry for bringing up this old topic, I am so glad I stumbled on this thread. I agree with your points 100%. I have a question for you though: At this time and date, do you still believe we are better off launching by Liquidity Pools than ICOs and IDOs?
Currently i am aware of 4 AMM pools and 1 orderbook onchain trading platforms on algorand in mainnet.
Pact.Fi - No commission for them, Variable liquidity fee (0,01%, 0,1%, 0,3%, 1%), advanced smart contracts (they use the inner txs to calculate other swap side)
- TinyMan - 0,3% they take 1/6 of the liquidity pool profits
- AlgoFi - 0,3% fee, i dont know how much they take
- Humble swap - just started, strong representation from reach.sh
AlgoDex - AlgoVsAsa only, does not work in the US
I guess you want to launch as ICOs if you can find investors. I started the vote coin as IDO (initial dex offering (on tinyman, algodex, later on pactfi)) and i lack the investors engagement there…
Thanks for responding.
I know all these AMMs and studied their fees and takes. I perceive you are trying to be careful with your answers here. I can understand.
For example one of your points is, finding investors. I have been wondering the same because, from my research, it seems a little challenging to garner investors for your new project at the current level of the Algorand ecosystem development. This might change as the ecosystem develops.
I believe too, even though you did not say it directly or explicitly, a Liquidity pool listing as a project launch is more advisable.
Thanks a bunch. Appreciate it.
No, actually i am trying to say just opposite…
From my experience it is better to get the VCs funding before the token launch. I have launched the vote coin token prior VC search, and I lack there the investors interest…
There are projects on algo ecosystem that might help find the VCs… For example the https://verdex.finance/ … i think you find more in algorand directory or try to go to a conference where algo is present and speak to them directly how to proceed and they might introduce u to some investors
Oh, sorry I misunderstood you. It’s clear now. Thank you for the time you have given. Have a great day.
Thank you for the exmaple.
Yes. Launching liquidity pools is always better than ICOs and IDOs. Generally, ICOs and IDOs are bad news for projects and subject to high regulatory scrutiny. They also usually end up hurting project tokenomics.
You will be better off building a product with a use case for your ASA. You do not want to attempt to attract investors, especially in the United States because it is a big red flag for regulators. A better option is to focus on building utility for the asset.
This is incorrect, I believe. I think the best thing to do for a new project is to focus on building a use case and earning revenue. VCs create a host of problems and obligations for projects and there is really no need in this space. Bootstrapping a project is the way to go because you focus on building and earning revenue, rather than burning cash from a VCs.
yes, i agree that building the product is the most important thing… and for VCs the most important thing should be when they will get the invested money back with interest…
but what I say is correct… i say that VC search should be done before you do the IDO/ICOs
i know that the Vote Coin earning potential is quite low, but still the snapshot has received $4 million in seed round… the vote coin is support system for my other projects like DREM for example, where the earning potential is very high…
I don’t think so. If you are searching for VCs you will always lose - time and money. I also don’t think you should do ICOs or IDOs or call what you did with Vote Coin an IDO - creating a liquidity pool is better than an IDO. Focus on earning revenue rather than raising capital as an investment. Raising $4M in capital only matters if you have an effective way to allocate that capital to earn more capital. Maybe that’s a good thing for some projects, but typically that won’t be the case for ASAs - IMO. If you stay away from VC, you’re forced to find ways to do more with less and you’ll have higher profit margins.
I call creating AMM pool and listing at AlgoDex IDO… AMMs are also DEXes … no?
Algodex has advantage over pools in lower fees and if person needs to do big order that would move the AMM pool a lot, he can negotiate it using the orderbook… $vote is listed at TinyMan (0,3% fees) and PactFi (0,01% fees)… It was first listed on TinyMan after their bugfix, later on Algodex with mainnet launch, and later at PactFi… People are motivated to have liquidity at AMMs with 50% pa earnings each hour…
And mainly they support the best voting solution in the world - onchain voting system which allows encrypted voting, knowledge based delegation of voting power, and multiple forms of voting result calculations… When do you plan to start to use our standard at choice?
That’s fine you can call it an IDO, but it hurts your project. Maybe only AlgoDex can be considered an IDO because it is an OrderBook, either way it has a negative impact on your asset.
If you want to make a PR on the Choice Coin GitHub with your standard, I’m happy to take a look.
sorry, choice coin white paper is not compatible with the vote coin standard… i think it is ok that two decentralized voting system live in algo ecosystem so that DAOs can choose the better one…
if they want to have cost effeciency, security, quadratic voting, ability of delegations and more they will probably choose vote… if they want to have onchain voting result calculation, they will choose the choice coin
regarding the IDO… i dont get it… any launch to AMM or orderbook trading where the price of the token is evaluated should be considered as dex launch… i dont get it why pactfi launch should not be considered as IDO
You can find our security audit on GitHub. In my opinion, Quadratic voting solves a false paradox, it’s a boring attempt at solutionism. Still, we can adapt Choice Coin to facilitate quadratic voting according to demand in the market. Definitely great to have more than one voting platform on Algorand and I wish you luck.
On the IDO, it has to do mostly with ensuring compliance with U.S. law, you can view the Choice Coin Compliance AI on GitHub. But, it’s also important because the original phrase IPO is used to refer to public stock and security offerings by companies. Digital assets are usually not stocks or securities, so it’s a good thing to get away from using old language like
initial offering because we need new words to reflect new ideas. I think more relevant however is the fact that IDOs and ICOs are laced with fraud and failure, so it’s not a good thing to associate with that form business activity.
I really apologize for replying now. I have had a very hectic and packed and full plate of deadlines for programming projects.
I really appreciate you for taking the time to reply me. Thank you for clarifying. I have also come to agree with this, after seeing some of my clients whom I developed their websites and some utility for. Liquidity pools have a lot of advantages.