With the rise of the GameFi ecosystem, Web3 gaming platforms have created their own fundraising event, known as an Initial Game Offering (IGO).
Every new project needs funding to get off the ground. More often than not, these monies are arranged through some sort of fundraising event. For instance, when a private company goes public, it will host an Initial Public Offering (IPO), wherein it sells its shares to the public to raise money.
Similarly, a new cryptocurrency will depend on an Initial Coin Offering (ICO), wherein a limited amount of its native cryptocurrency is sold to the public to raise the funds needed for development. And now, with the rise of the GameFi ecosystem, Web3 gaming platforms have created their own fundraising event, known as an Initial Game Offering (IGO). Tag along as we unpack all the important need-to-know information about IGOs and how they function.
How does an IGO work?
An IGO allows interested audiences to invest in an upcoming gaming project during its early days. It aims to push a project from its initial stages into the developmental phase and all the way to completion.
The advantage of funding gaming projects through an IGO is that the stakeholders need not convince venture capitalists to fund the project. Instead, they can source the money straight from the interested stratum of the general public.
The main difference between an ICO and IGO is that in the case of the latter, investors gain access to in-game assets over and above the native token. Buyers are incentivised to pump money into IGOs through lucrative offerings like mystery boxes, rare in-game collectables, limited edition skins and accessories, special weapons, etc.
These items are invariably NFTs that can be used to access the game early on; a reward for being one of the first supporters of the new project. Moreover, the tokens earned in the process are cryptocurrencies that can be sold or traded over an exchange.
If the game does well, the NFTs and crypto received through the IGO will appreciate over time and leave the investor with substantial gains. On the other hand, the funds received from the IGO will help the development team take the project to the next stage.
How to participate in an IGO:
An IGO is hosted through a ‘launchpad,’ which is nothing but a support platform that handles the entire fundraising process. The method is very similar to an IPO, wherein you need to subscribe, sign up or register for the IGO in advance. If you are shortlisted for the IGO event, you’ll need to create a crypto wallet and link it to the launchpad.
From there on, each launchpad will have a slightly different process, and they should guide you through the final few steps. Some popular IGO platforms are Binance NFT, Seedify Fund, GameFi, Trust Pad, Enjinstarter, etc.
Things to remember before investing in an IGO:
· Research the IGO launchpad beforehand. Ensure that it is a well-functioning and well-established platform with past successes to back its claims. The launchpad should make available all crucial information regarding its previous IGOs and the current project, such as the time taken to obtain full funding and the total funds raised for different projects in the past.
· The project’s leadership and development team should have valid credentials to lead the project to completion. If they have executed such projects in the past, it is not only a feather in their cap but also an assurance to potential investors.
· In many cases, a community of crypto enthusiasts also root for the project and discuss its potential post-completion. Check if such a fraternity of like-minded folks share the same views about the project as yours.
· Further, if the early investors in the projects have previously funded other such successful projects, it instils more confidence in the masses.
· Finally, it would help if you also looked into the whitepaper of the GameFi project. Ensure it has a well-explained working model and a detailed section on the project’s tokenomics. Also, look for a smart contract audit to ensure the platform has been vetted and has no hidden backdoors for developers to drain investor funds and disappear.
IGOs are a great way for project devs to source funds for their gaming platforms. If the project takes off, they also create wealth for investors. Therefore, IGOs are a win-win. Just make sure you research the project and the launchpad before putting your hard-earned money on the line.