What Are WHO, SHO, IEO, IGO, IFO, IDO Fundraising Models?

Fundraising is one of the exclusive activities in the crypto space that cannot be neglected due to its importance and relevance in the industry. There are lots of fundraising platforms created with the primary purpose of facilitating the expansion of businesses while helping them raise funds to curb financial setbacks. Amongst the most popular fundraising models are WHO, SHO, IEO, IGO, IFO, and IDO. In this guide, we will be exploring each of them to help crypto enthusiasts understand the industry better while making good business and investment decisions.

Wallet Holder Offering (WHO)

Wallet Holder Offering (WHO) is a decentralized project that facilitates an efficient and accurate airdrop process via its secure, friendly, and easy-to-use user interface. It is a young airdrop infrastructure built with the primary purpose of eliminating and correcting the inefficiencies that come with traditional reward distribution campaigns.

WHO in its unique design performs in a way that makes it serve as a connection between wallet users and blockchain projects. In other words, it connects wallet users with blockchain projects for better airdrop efficiencies. As such, it provides exclusive functionalities for both wallet users and blockchain projects.

Wallet Holder Offering (WHO) enhances the effective growth of the user base, real engagement in product usage, and feedback for blockchain projects. As a result, it helps them build a strong social community with large active members.

WHO in its unique design performs in a way that makes it serve as a connection between wallet users and blockchain projects. In other words, it connects wallet users with blockchain projects for better airdrop efficiencies as well as provides blockchain projects with a large and active user base to obtain important community feedback. Users can leverage the WHO to earn rewards safely and fairly in the following ways:

• Learn and earn. By actively participating in the learning process, users can get rewarded with the fair mechanism provided by SafePal.
• Simple and easy. Users also get rewarded for using the product with no complexities involved. The user’s SafePal Wallet gets the rewarded tokens via the airdropping system
• Secure and fair. Users of the SafePal App are provided with a secure platform to participate in airdrops without concerns or ugly experiences of encountering scammers in the space.

The first wallet to initiate the airdrop mechanism is Safepal. As of late 2021, the platform had reportedly hosted about 3 WHOs on its platform.

For users to be eligible for this innovation, their Safepal Wallet must have an SFP token with the circumstances of the offering determining the amount of SFP tokens required. Examples of such circumstances include tasks, reward allocation and timeline.

Strong Holders Offering (SHO)

Another popular fundraising project is Strong Holders Offering (SHO), a fundraising infrastructure that chooses qualified and eligible investors via a criterion of on-chain activities and other proprietary data sets.

With Strong Holders Offering, new projects can raise funds from holders of a particular cryptocurrency. It is much available to investors who have held a competitor coin for six months or to active liquidity providers on a decentralized exchange (DEX). Strong Holders Offering is a product of DAO Maker.

As implied by the name, Strong Holders Offering has its focuses mainly on investors with “strong hands”, or those who can hold crypto assets for extended periods.

SHO helps the eligible participants by selecting them as members of an SHO and providing them with protection. Terms of SHO vary based on the offering. SHO generally offers long-term holders of a token or coin a discount in exchange for committing to hold the token or coin over a defined time scope. The discount is usually larger for those who hold the token or coin for a longer time.

It is also worth mentioning rSHO, refundable Strong Holders Offering. This term describes the model deployed by Strong Holders Offering that gives room for investors to withdraw support for a particular project under certain criteria and therefore seek a refund. However, this right may become invalid after the value of the token issued by a project during the initial Strong Holder Offering increases and holds at 400% for 120 days.

With this crowdfunding mechanism, investors with strong hands enjoy exclusive benefits as the DAO Maker incentivizes them by making them eligible to become participants of an SHO while also offering them protection.

Moreso, this mechanism guarantees investors due safety and protection as noted earlier. It compels proposing projects to a series of tests before giving room for an SHO. This helps to discourage and get rid of low-quality startups and fraudulent manipulators.

On the flip side of the benefits are the risks associated with the SHO mechanism. This includes market risk, liquidity risk, and the risk of the token or coin failing to achieve its predefined goal. It is important to do your research and understand the risks before investing.

Initial Exchange Offering (IEO)

Initial Exchange Offering (IEO) is a type of fundraising mechanism that allows crypto start-ups to raise funds via listing on an exchange or trading platform. This is one of the most common and most adopted fundraising models among crypto projects. The exchange plays the role of an intermediary between investors and startups and receives profit from fees due from services provided in the due diligence process and stages of funding. One of the first few IEO platforms to be recognized in the industry is Binance.

Companies that are building on launching crypto tokens conduct Initial Exchange Offerings on crypto exchanges to help attract the attention of new investors. However, the contributions from interested investors are sent through the platform that hosts the IEO.

Following the fundraising model, these start-ups are thereby charged a fee. Moreover, a certain proportion of the tokens are sold, to fundraise on the exchange. Upon the completion of the IEO event, the tokens then become listed on the exchanges. This activity helps to boost the profile of the concerned companies while attracting the interest of investors towards the tokens.

The IEO mechanism benefits both startups and investors by providing startups with the platform to raise capital through listing on an exchange or trading platform and reducing risks for investors by initiating a due diligence and vetting process.

However, listing fees for prospecting startups can be high, especially on reputed exchange platforms. In some cases, startups may also have to provide a commission to the exchange from token sales. Besides, exchanges vary in regulations and overall quality, therefore, some IEOs may be less effective in security levels. There is also the risk of the pump-and-dump scams where scammers generate fake hype around a crypto to grow interest and pump the prices so they can later sell all shares and abandon the startup.

Initial Game Offering (IGO)

The increase in gaming projects in the blockchain industry brought about the invention of Initial Game Offering (IGO). Initial Game Offering is a type of fundraising mechanism that deals with non-fungible tokens (NFTs) or token-based gaming projects while providing interested investors with the opportunity to invest in these gaming projects at an early stage.

It strictly exposes investors to gaming projects that have the potential to offer huge returns after their launch. It ensures that the gaming projects leverage tokens or NFTs as their in-game currency and rewards.

This crowdfunding mechanism operates in a way that allows investors to contribute their funds to gaming projects from the IGO launchpads. An IGO launchpad is a platform where blockchain gaming projects in their early stages are hosted. Investors buy the token native to the IGO launchpad and fund contributions to the chosen IGOs with the acquired token. The investors either have to stake their tokens or have them locked in a pool to invest in the project. Then they receive in-game tokens or NFTs required to play the game.

Notably, every IGO launchpad has its distinct process of participation but the basic process involves first connecting a wallet to the launchpad, after which the investor is required to choose a tier that reflects the value of the investment and thereafter, identify an IGO to invest in. Examples of Initial Game Offering (IGO) launchpads that have surfaced since the invention of blockchain gaming projects include GameFi (GAFI), Enjinstarter (ENJINSTARTER), Gamestarter (GAME), and Seedify.fund (SFUND), among others.

Initial Farm Offering (IFO)

Initial Farm Offering (IFO) is one of the fundraising models that helps newly innovated DeFi projects to raise funds by participating in pre-sales events hosted after stern project vetting by decentralized exchanges. In other words, projects can raise capital while utilizing this model via the farming feature offered by decentralized exchanges.

This model allows interested investors to participate in the presale events of native tokens hosted by the DEX. The model features two common types of fundraising events, namely Basic Sale and Unlimited Sale. The former requires users to pay a predetermined fee, thereby allowing them to stake as many BNB and CAKE tokens as possible, while the latter only allows for the staking of a defined number of tokens without charging users any participation fee. PancakeSwap is one of the common launchpads for IFO.

Notably, an IFO eliminates the need for a middle-man by enabling Peer-to-peer (P2P) transactions which allow users to save money. It also provides users with the benefits of trading and investing on a DEX platform, where users and investors are ensured to have an environment for transparent transactions.

Initial DEX Offering (IDO)

Initial DEX Offering (IDO) is a permissionless crowdfunding mechanism that features a new style of fundraising event. It allows young projects to launch their tokens through a decentralized liquidity exchange.

Decentralized Liquidity Exchange on the other hand is a type of crypto asset exchange that has its reliance on liquidity pools where traders are allowed to swap tokens, which includes crypto coins and stablecoins. For instance, Bitcoin (BTC) can be swapped for Tether (USDT) on decentralized liquidity exchanges.

IDO affords projects the means to raise funds without paying high exchange fees or waiting for the exchange approval before the project is listed. Instead of waiting for approval from an exchange, projects and tokens are vetted by vocal community members, and this provides ease of entry for small projects and as well as facilitates large collaborations. The features of Initial DEX Offering (IDO) provide investors with the opportunity to enjoy better and immediate liquidity at every price level. IDO helps the desires of new projects to raise and access immediate funds.

Some examples of previously conducted Initial DEX Offering that came out successful in the crypto space include Raven Protocol IDO, Universal Market Access Protocol IDO, SushiSwap IDO, and others.

Conclusion

The above-mentioned infrastructures can be referred to as emerging fundraising models that cryptocurrency projects use to raise funds in their early stages. The public has adopted these fundraising models as the exclusive benefits they offer to baby projects and investors are significant.

Projects with insufficient capital can raise funds through any of these models, hence addressing their financial problems at their early stages. These crowdfunding technologies aid companies in raising funds using blockchain and decentralized finance while bridging the gap between startups and big companies to find more funds for further expansion.