- Polkadot IDOs have continued the grand cryptocurrency tradition of influencers dumping on exchange buyers
- Polkastarter has helped launch several tokens onto Uniswap after token sales, with the same hype-pump-dump cycle taking place again
- What started with ICOs in 2017 has continued into 2021, with Polkadot IDOs seeming to be the new vehicle
First we had blockchain ICOs, then we had exchange IEOs, and then we had DeFi meme coins. And now it seems the new breed of hype, pump and dump token sales are upon us, in the shape of Polkadot IDOs (Initial DEX Offering). Polkadot IDOs have been running for a few weeks, and it seems that each one is simply exacerbating the pattern that has been playing out since 2017, where influencers get in cheap and latecomers pay the price.
Polkadot IDOs Keep The Spirit of 2017 Alive
Token sale events in the crypto space in general have been about one thing for buyers – turn a quick profit on the exchange listing and get out. Technically speaking there is nothing wrong with this, but the moral implications have been discussed in many forums on many occasions, with influencers openly boasting of their pride for dumping on newcomers.
The fever started in 2017 with ICOs and continued with IEOs, and then last year DeFi token launches became the new way for influencers to make a fortune by hyping up a project and dumping on buyers. The pattern for all these projects was the same – get into the private sale (or get the tokens free in exchange for promoting the project), hype up the project, sell on the first pump, and watch the token price (and usually the project) die along with the profits of latecomers. This resulted in a chart that looked typically like this:
This morally reprehensible activity has been denounced left right and center but of course it makes no difference – charlatans have always seen the crypto space as rich pickings. We can see how the Polkadot IDOs are perpetuating this philosophy by taking a look at four of the most recent projects and how they have fared after hitting exchanges:
Just like practically any ICO ever created, there is an initial pump as private sale and ICO buyers ride the new listing hype wave and then dump on exchange buyers, with the token price grinding inexorably lower.
This isn’t of course to say that these Polkadot IDOs might not regain their value, but it is clear that the same cycle is happening once again, with influencers once more heading the queue. In recent days you couldn’t move on crypto Twitter without someone shilling the NORD IDO, with the result that it sold out in seconds, generated a whole load of hype, listed on Uniswap, made a fat stack for those same influencers, and then dumped 78%.
Our Advice – Wait
Unless you are one of the said influencers then our advice is to steer clear of these Polkadot IDOs, at least until the hype has died down, unless you’re happy taking the risk of selling your ICO tokens at the right time. As we can see, like many ICOs before them, Polkadot IDOs often return to their listing price and sometimes their ICO price once all the selling is done, by which time you can get a much better gauge of the quality of the project itself.
When the token price has bottomed out and if the project is still looking like a genuine player in the crypto space then you can consider investing knowing that the downside risk is minimal compared to the IDO.