As stocks tumble and inflation rises, crypto seems to follow suit, as it currently faces a bear market. While volatile, crypto’s sustained decline over the last six months – Bitcoin is down nearly -50% in 2022 – coupled with its evolving correlation with the larger market as a whole, has contributed to its current market standing. These factors have created a looming call for increased regulations to tighten IDO investment protocols as the crypto industry continues to define its place in the financial world.
In an economic downturn, the world looks to industry leaders for insight into how best to approach the moment. For crypto, and specifically in the GameFi sector, companies like GamesPad are raising their IDO standards to strengthen investment quality, hoping to mitigate risks and give projects and investors a solid platform to continue reaching their goals.
Here, we will look at some of the current critical problems in the IDO investment space and, subsequently, how raising the standards of protocols around the IDO process can help strengthen the crypto industry and all of the current projects and investors for the better.
Key Problems with the IDO Space
In decentralized structures, problems within the IDO space can lead to inconsistency and uncertainty within the crypto industry, which does not bode well in bear markets.
Below are some highlighted issues that require further examination in an effort to make improvements for a more successful IDO space.
- Software Errors
Project owners may encounter various problems while attempting to collect funds due to the mistakes of their developers or because of 3rd party API services. These problems can result in site crashes and data loss, instant changes in token sales due to price volatility, theft of funds, or even software overloading.
- Token or Exchange-Based Errors
Without the proper internal regulations by a launchpad, projects are subject to fund and token-related errors that they might miss because of a lack of regulations. These issues include failing to adhere to disclosed token distributions, raising funds outside the supply-demand balance, inflation due to stock exchange agreements, and fake volume and price applications.
- Project Accountability Issues
In a decentralized landscape without a guiding system of checks and balances, there is more room for human error, malicious or not, to take advantage of others. Some of these issues will result from project owners acting out to sway advantage or overselling users with many coins or tokens.
Why a Bear Market Requires New Regulations
With the federal reserve tightening economic measures due to the increasing cost of money and global uncertainty, crypto enthusiasts have less room to invest in budding markets.
In some ways, this bear market is good because it will clear away the people and projects who were there for the wrong reasons. The hype and the massive price rally caused people to focus on speculation rather than building products. The goal is to put the focus back on the projects building up the industry. And those projects are being asked to raise the bar to keep expectations high and any new IDO regulations effective.
A refocus on strengthening regulations will help move the needle away from crypto’s longstanding perceived skepticism and over towards a confident curiosity. A shift that helps prove how even in a bear market, the companies that built themselves to be pillars of the industry can lead markets back on the upswing towards a brighter future.
GamesPad New IDO Policy Will Redefine the Future of Crypto Fundraising
As a holistic gaming ecosystem, GamesPad‘s goal has always been to bring only top-quality IDOs to the crypto community’s attention. Therefore, GamesPad’s new IDO regulations aim to secure user investments and ensure the successful launch of all IDO projects on the platform.
In this bear market, it is increasingly important that a more thorough due diligence is placed on all projects coming to the market. GamesPad has always been at the top of the industry with proper vetting that considers various aspects, including regulatory, legal, financial, technological, and business capabilities.
GamesPad is applying new IDO investment rules based on over 2-months of research, extensive launch experience, and community feedback. These regulations benefit both investor and project as a comprehensive guide to ensure all avenues of IDO success. In addition, the selected project will receive extensive support in marketing, tokenomics, advisory, launch strategies, and more from GamesPad’s highly knowledgeable team of experts.
GamesPad’s new IDO regulations include:
- They are not accepting projects with unreasonable valuations (FDV) or where multiples between the seed and the public rounds are more than 5x.
- They are not participating in project launches if more than 4–5 launchpads are participating in the project public launch.
- They are limiting projects launching on the platform to around $1M in public raises unless there are exceptional reasons to justify a larger raise.
- They are enforcing that all projects will verify the distribution times of all parties.
To view the complete list of IDO regulations, click here.
While still decentralized, the process of self-regulation amongst launchpads is a way to continue to uplift the industry while curtailing pitfalls. GamesPad’s high standards and evolving regulations set a new precedent in the community. Utility tokens, such as GamesPad $GMPD, continue to be popular with consumers and developers. These tokens have seen significant growth in the last several months, even as the market fluctuates.
In conclusion, the bear market means a tighter squeeze for investors and projects but also leads to an excellent opportunity for leaders in the industry to redefine their regulations and best practice protocols. In taking this time to comprehensively establish an IDO investment process that enhances the experience of the investor and the project while also mitigating any problems that arise, the future and the crypto industry can come out from this bear market more robust than ever before.