KEYTAKEAWAYS
- IGO offers early access to in-game assets, allowing investors to acquire game tokens and NFTs at lower prices before the game launch.
- IGO provides investment opportunities with security, as exchanges vet projects to minimize fraud and rug pull risks.
- Investors face risks such as market volatility, project uncertainties, and platform token fluctuations during IGO participation.
CONTENT
Learn what IGO (Initial Game Offering) is, its advantages, risks, and how it compares to ICO, IEO, and IDO in the GameFi sector. Learn how to invest wisely in blockchain gaming.
WHAT IS IGO?
IGO (Initial Game Offering) is a fundraising method specifically designed for blockchain gaming projects, similar to ICOs or IEOs, and primarily used within the GameFi sector.
Through IGO, game developers can raise funds by launching game-related assets on exchanges before the official game release.
This approach not only helps secure funding but also provides an opportunity to generate early exposure for the game, with some platforms even offering promotional support to boost visibility.
For investors, participating in an IGO allows them to acquire key in-game assets, such as game tokens or NFTs, at a relatively low price before the game launches.
These assets can provide a competitive edge in the game or present an opportunity for potential profit through market trading once the game goes live.
The range of assets available for pre-purchase through IGO is diverse, including mystery boxes, access passes, special characters, skins, weapon upgrades, and even rarer items.
These assets play a crucial role in enhancing the gaming experience and offering additional value to early supporters.
>>> More to read: GameFi : The Future of Gaming
IGO VS. ICO, IEO, AND IDO
While IGO focuses on fundraising through the issuance of in-game assets, the crypto space offers various other fundraising models such as ICO, IEO, and IDO, each with distinct characteristics and approaches to capital raising.
➤ ICO: Initial Coin Offering
ICO is the earliest and most common fundraising method in the crypto industry. It allows project teams to issue new tokens through smart contracts, typically by providing a whitepaper that outlines their vision and plans.
Since anyone with a smart contract and a whitepaper can launch an ICO, it offers great accessibility but comes with significant risks.
Project teams are responsible for their own marketing and promotion efforts, making them vulnerable to scams and fraudulent activities due to the lack of regulatory oversight.
>>> Learn more: What Is ICO? A Beginner’s Guide
➤ IEO: Initial Exchange Offering
IEO involves a partnership between the project team and a cryptocurrency exchange to launch and distribute tokens.
In this model, the exchange handles the marketing, fundraising, and listing of the token, allowing the project team to focus on development.
The success of an IEO largely depends on the credibility of the partnering exchange.
Reputable exchanges conduct rigorous due diligence on projects, ensuring a higher level of security and reducing the risk of scams.
As a result, IEOs are considered safer and more reliable compared to ICOs.
>>> Learn more: What is IEO in Crypto?
➤ IDO: Initial DEX Offering
IDO is a decentralized approach to fundraising, where project tokens are launched through decentralized exchanges (DEXs) rather than centralized platforms.
This method allows for immediate liquidity and eliminates the need for intermediaries, giving investors direct access to tokens upon launch.
The decentralized nature of IDOs ensures greater transparency and accessibility; however, it also comes with risks such as volatility and a lack of project vetting, which can lead to potential security concerns.
➤ IGO: Initial Game Offering
IGO, on the other hand, is specifically tailored for blockchain gaming projects.
Unlike other fundraising methods, it involves the sale of in-game assets such as tokens, NFTs, or special game items before the official game launch.
By participating in an IGO, investors can gain early access to valuable game assets like mystery boxes, access passes, skins, or exclusive in-game perks.
Some crypto exchanges also provide marketing support for IGO projects, helping to increase visibility and attract potential players and investors.
>>> More to read: What is NFT and How Does It Work?
ADVANTAGES OF PARTICIPATING IN IGO
1. Exchange Screening and Endorsement Enhance Security
One of the key advantages of participating in an IGO is the rigorous vetting process conducted by exchanges before listing a gaming project.
Since an exchange’s reputation is at stake, any issues with the project could negatively impact user trust and potentially drive investors to other platforms.
To mitigate such risks, exchanges typically have dedicated review teams that assess the project’s feasibility, technical framework, and team background.
This thorough due diligence process reduces the chances of fraud or rug pulls, offering investors greater security.
2. Acquire Game Assets at a Low Cost and Gain a Market Edge
Through IGO participation, investors have the opportunity to acquire essential in-game assets—such as game tokens, characters, and items—at a lower cost before the game’s official launch.
This early acquisition provides players with a competitive edge once the game goes live, enhancing their gaming experience and opening up potential financial gains as the value of these assets appreciates over time.
3. Profit from Arbitrage Opportunities with High Resale Potential
Another attractive benefit of IGO is the potential for arbitrage. Many gaming projects offer limited-edition assets during the IGO phase, such as mystery boxes containing rare in-game items or characters.
These exclusive assets often command high demand in secondary markets like NFT marketplaces.
Investors who successfully purchase these items early can resell them at higher prices, securing short-term profits.
Participating in an IGO not only allows investors to enter the gaming economy at a lower cost but also provides added security through exchange vetting while offering lucrative arbitrage opportunities.
This makes IGO a compelling option for blockchain gaming enthusiasts and investors looking to capitalize on the growth of the GameFi sector.
>>> More to read: Choosing the Right Cryptocurrency Exchange: CEX vs DEX
RISKS OF PARTICIPATING IN IGO
1. Too Many Projects, Difficult to Evaluate
With the rapid growth of blockchain gaming, an increasing number of projects are launching through IGO, making it challenging for investors to identify the best opportunities.
The sheer volume of available projects can dilute investor attention, potentially impacting the resale value of game assets.
Additionally, evaluating each project’s potential requires significant time and effort, and investors may risk missing high-quality opportunities or investing in projects with higher risks.
2. Uncertainty in Project Development
While exchanges conduct due diligence to verify the credibility and operational capabilities of IGO projects, it does not guarantee the success or value appreciation of the in-game assets.
Many projects are still in their early development stages, facing uncertainties such as market adoption, game quality, and user growth.
If the project team fails to execute their roadmap effectively, even initially promising game assets may lose their value over time.
3. Platform Token Price Volatility
Participating in an IGO often requires investors to lock up a specific amount of platform tokens to qualify for asset purchases.
However, these platform tokens are subject to market fluctuations, which can pose a risk.
For example, an investor may achieve a 5% gain from the IGO, but if the platform token’s value drops by 10% during the lock-up period, they could end up with an overall 5% loss.
This volatility means that even if the IGO itself is profitable, losses from the platform token could offset potential gains, making it crucial for investors to carefully assess the risks involved.
Participating in IGO offers exciting opportunities but also comes with inherent risks.
Investors should conduct thorough research, evaluate the long-term potential of the gaming project, assess the project’s development team, and monitor platform token market trends to manage their investments wisely.
>>> More to read: How to Get Crypto Passive Income Easily?
