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    What is Initial Farm Offerings (IFO)? How Does It Works?

    Cryptory.net - IFO is a brand new type of fundraising that uses farming events to raise funds for participating projects.

    Since the advent of cryptocurrency more than 13 years ago, significant developments have changed the types of fundraising events that have been used, such as before ICO projects relied heavily on backing venture capitalist (VC), this is a slow and complicated process. The ICO stage has revolutionized the way funds are raised, cutting short the process of attracting venture capitalists (VCs). The initial system for acquiring VC’s has proven to be a lengthy process for blockchain-based projects.

    To solve this problem, exchanges have stepped in to help projects raise funds in a safe and transparent way, one of which is the Binance exchange.

    Recently, the wave has turned to the decentralized finance (De-Fi) sector of the cryptocurrency market. The most prominently used Dapp platforms are DEX platforms like PancakeSwap and StreetSwap, which introduced an innovative token issuance service called IFO.

    What is Initial Farm Offerings (IFO)?

    IFO is a brand new type of fundraising that uses farming events to raise funds for participating projects. Users will need to provide liquidity to the BNB-CAKE pool to receive the corresponding LP token, and then participate in the IFO with this LP token.

    With the help of IFO, users can participate in a “pre-sale” held through a DEX to receive tokens prior to listing on their respective exchanges. Usually, DEXs will thoroughly vet projects before holding an IFO. Although the vetting process has passed, this does not guarantee the success or integrity of the token, as users should always consider scrutiny beyond BSCNews when making their investment decisions. The IFO process benefits both new projects, PancakeSwap, and its users. The IFO distributes farming rewards to PancakeSwap users while also providing new projects with an incentive liquidity pool on PancakeSwap. This system allows to generate sustainable profits for PancakeSwap users and it creates initial liquidity for the respective token. On top of that, half of the funds raised will be burned in CAKE if the sale is completed.

    IFOs have similar characteristics and are different from the two popular forms of fundraising today, IEO and ICO. All three of these methods are ways to raise funds for crypto projects. These methods of issuing tokens are usually done on an exchange, sometimes on project websites or other “pre-sale” methods are used.

    How to join IFO on PancakeSwap

    Step 1: Visit https://PancakeSwap.finance/profile, to complete the basic information before joining the IFO

    Step 2: Stake CAKE and BNB into the liquidity pool to get LP tokens

    Step 3: While the IFO is happening, users can use their LP tokens to buy tokens that are on sale. The project recommends that users join the Basic Sale first.

    Step 4: After the IFO ends, the user can receive the purchased tokens and, the unused CAKE-BNB LP tokens will be returned to the user’s wallet.

    Difference between Basic Sale and Unlimited Sale

    In the Basic Sale pool, users can deposit up to about 100 USD in CAKE-BNB LP tokens. PancakeSwap will calculate the maximum amount of LP about 30 minutes before each IFO. Basic Sale does not require a participation fee.

    Unlimited Sale has no limit on the amount of CAKE-BNB LP Token a user can deposit. However, users will have to pay a certain fee if they want to participate. Participation fee will start at 1%, and this fee will probably decrease based on the amount of CAKE-BNB LP tokens users deposit.

    Conclude

    PancakeSwap has continued to innovate on their platform with the launch of the IFO feature. This system rewards both new projects and PancakeSwap users as the process creates liquidity for new projects and burns CAKE tokens. In general, IFOs are used to raise funds for new decentralized protocols on BSC. This system provides a seamless way for new projects to launch into the DeFi space.

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