Its Not Always Profitable to Participate in an IDO or Presale
It is usually considered that its a good idea to participate in an IDO or presale in order to take good profit from a project. As the IDO or presale participants get the tokens at discount prices. IDO participants get profit when the trading goes live as the listing prices are usually higher than the IDO or presale price.
While in fact the concept of taking profit through an IDO participation is not true sometimes. Even some projects run whitelist campaigns to give more discount or guaranteed allocation in the IDO. And it sometimes becomes tough to get the whitelist.
Recently a Sui based project named Suia run its IDO and gave few whitelist spots to early users. Everyone was allowed to participate in the IDO but allocation was not guaranteed while whitelisted users were guaranteed allocation worth $300 in Suia token.
The suia ido price was fixed as $0.36 per token. IDO allocation was based on overflow method. A user who commited $700 was allocated $50 suia allocation while whitelisted users were guaranteed $300 allocation.
After the ido ended, the suia token was listed in different exchanges with less price from its IDO price. It was around $0.22 when trading started. Rumors started to flow. IDO participants were very angry especially the whitelisted users. It was because no 9ne could make profit through this IDO.
Sui team raised a lot of funds but failed to manage the price of its token. An IDO is considered successful when the launch price is higher than the IDO price. But Suia team failed to maintain the price above the ido price. Now after few days passed the price of suia token is still down more than 80% from the IDO price.
What i wanted to say is that participation in an ido doesn't guarantee profit. You need to understand this before participating in an ido or presale.
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@coolguy222 is a crypto trader and content creator on hive blockchain. He also runs a small business of Mobile accessories and Wrist watches. He loves to make new friends.