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1. Beginner Course

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  1. 1. What are these cryptocurrencies?
  2. 2. Bitcoin - the story of a technological revolution
  3. 3. Satoshi Nakamoto, who is the creator of Bitcoin?
  4. 4. Vitaly Buterin – the creator of Ethereum
  5. 5. What is Blockchain, and how does it work?
  6. 6. What is an NFT token?
  7. 7. What is money?
  8. 8. Cryptocurrencies vs fiat money, which will win?
  9. 9. What is DeFi (Decentralized Finance)?
  10. 10. DeFi: opportunities, advantages and disadvantages of decentralized finance
  11. 11. What is an altcoin?
  12. 12. Stablecoins - What are they?
  13. 13. Cryptocurrency wallet - what is it?
  14. 14. Why do we talk about bull and bear markets?
  15. 15. Security in the crypto market - what rules are worth following?
  16. 16. What is the seed phrase in cryptocurrencies?
  17. 17. Dogecoin and memecoin - what are they?
  18. 18. What is a Ponzi scheme?
  19. 19. What is a Soft and Hard Fork?
  20. 20. Blockchain - examples of use
  21. 21. Is blockchain safe?
  22. 22. Smart Contracts - what are they?
  23. 23. What is Ethereum? 
  24. 24. Liquidity in the cryptocurrency market
  25. 25. What is cryptocurrency mining?
  26. 26. What is the mining difficulty?
  27. 27. Inflation and its effects on financial markets
  28. 28. What is compound interest, and how does it work?
  29. 29. Cryptocurrency wallet diversification
  30. 30. Blockchain and NFT games - how to make money on them?
  31. 31. Decentralized Apps – what are they?
  32. 32. What is Proof of Work (PoW) and what is Proof of Stake (PoS)?
  33. 33. What is Proof of Burn (PoB)?
  34. 34. What is the Proof of Authority (PoA) consensus mechanism?
  35. 35. What Are Privacy Coins and Are They Legal?
  36. 36. What is CBDC - central bank digital money?
  37. 37. What is Cryptocurrency Airdrop all about?
  38. 38. What are the types of blockchain networks?
  39. 39. Key differences between ICO, IEO and STO
  40. 40. What is IoT - the Internet of Things?
  41. 41. What is the difference between Circulating Supply and Total Supply?
  42. 42. Everything you need to know about gas fees in Ethereum!
  43. 43. The most important cryptocurrency acronyms/slang you need to know!
  44. 44. Halving Bitcoin - what is it, and how does it affect the price?
  45. 45. What is the Fear and Greed index for cryptocurrencies?
  46. 46. APR versus APY: what is the difference?
  47. 47. Snapshot from the world of cryptocurrencies - what is it?
  48. 48. Know your customer (KYC) and Anti-money laundering (AML) what are they in the cryptocurrency industry?
  49. 49. What is a whitepaper? What is its purpose, and how do you write it?
  50. 50. How do you transfer cryptocurrencies?
  51. 51. What is EURT? How does it work?
  52. 52. What is an Initial Farming Offer (IFO)?
  53. 53. What is Regenerative Finance (ReFi)?
  54. 54. Bitcoin Pizza Day
  55. 55. What Is Stagflation and Why Does It Have a Negative Impact on the Market?
  56. 56. What are decentralized DAO organizations, and how do they work? What are DAO tokens?
  57. 57. CyberPunks - the story of the most popular NFT collection in the crypto industry!
  58. 58. Michael Saylor, Self-Proclaimed Bitcoin Maximalist
  59. 59. AI blockchain - a new look into the future?
  60. 60. The Bored Ape Yacht Club (BAYC) - the story of the popular NFT collection!
  61. 61. Who is Changpeng Zhao, CEO of Binance?
  62. 62. What is blockchain network congestion, and how does it work?
  63. 63. Azuki NFT collection guide: everything you need to know about it!
  64. 64. Who Is Craig Wright, the Alleged Creator of Bitcoin?
  65. 65. What Is Bitcoin (BTC.D) Dominance?
  66. 66. What is WorldCoin? Everything you need to know about this cryptocurrency!
  67. 67. Who is Brian Armstrong - CEO of Coinbase?
  68. 68. The 10 most expensive non-fungible tokens (NFTs) ever!
  69. 69. Web3's most popular social media platforms! Will they replace the platforms we know?
  70. 70. Cryptocurrency wallets: Hot Wallet vs. Cold Wallet - key differences!
  71. 71. Gavin Wood: Blockchain Visionary and Co-Founder of Ethereum
  72. 72. The memecoin story: madness or great investment?
  73. 73. Blockchain versus databases: key differences!
  74. 74. NFT Art: The digital art revolution - history and examples!
  75. 75. Who is Galy Gensler and the SEC? How does the Securities and Exchange Commission (SEC) affect the cryptocurrency market?
  76. 76. On-chain analysis in the cryptocurrency world: Everything you need to know about It
  77. 77. What are utility tokens and what use do they have in the cryptocurrency sector?
  78. 78. Can you pass on your cryptocurrencies after death? How do you pass on a cryptocurrency inheritance?
  79. 79. What is the Howey test? What application does it have in cryptocurrencies?
Lesson 52 of 79
In Progress

52. What is an Initial Farming Offer (IFO)?

If you search the depths of the Internet for interesting topics related to cryptocurrencies, you have surely seen the acronym IFO. It sounds similar to an ICO, doesn’t it? No wonder – Initial Farming Offer is an evolution of the ICO we know from previous lessons.

Both IFOs and ICOs are used to raise capital for early-stage cryptocurrency projects. The difference, however, is that an IFO uses DeFi and yield-farming platforms for this purpose to prepare presentations of projects seeking capital.

In this way, IFO maintains decentralization while allowing potential investors to earn rewards for the capital they put into IFO.

You can read about how the whole system works in the following sections!

How does the Initial Farming Offer (IFO) work?

As we mentioned earlier, how an Initial Farming Offer works depends largely on the DeFi and Yield Farming platforms on which the capital raising in question is currently taking place. Simply put, it is a fundraising model for decentralized finance projects (DeFi) that uses farming. How it works. The person responsible for the project in question asks the platform to put them on a list of people willing to host an IFO. The people responsible for the platform then receive all the necessary project data and carry out an initial analysis of the project. What is the purpose of this analysis? The platform checks whether a project can arouse the interest of the DeFi Platform community.

Once the project has passed the first stage, the preliminary project review, the DeFi platform responsible for the IFO asks for tokenomics and other necessary things about the project to be developed. Once this is all done, the stage of listing the project and the corresponding IFO begins.

At this point, all you have to do is prepare your portfolio and decide how much you want to invest in the project. Investors attend these pre-sales events and raise capital for the project by investing in its native tokens. Remember that the teams at DEX carefully screen all potential participants and then introduce them to investors. At this point, however, we have an important tidbit for those in charge of farming: We are talking about a concept called spillover.

What is the idea behind this concept? The inventors of a certain project can raise as much money as they want to be able to fully develop it. Let us say this amount is USD 3 million. Once this ceiling is reached, the smart contract responsible for controlling the Yeld farming pool starts to allocate an appropriate percentage of the IFO tokens to those responsible for farming, taking into account, of course, the amount raised during the campaign.

Such a model helps to maintain decentralization of the future project as well as capital control. Moreover, it serves to initiate the entire market needed for the development of the project’s tokenomics, as the liquidity of the Yeld farming pool will foster this development.

Tokens raised through an IFO campaign are not particularly more advantageous than those raised through other fundraising models. Although exchange platforms carefully and thoroughly audit a project, the value of these tokens depends on market conditions.

Platforms implementing the Initial Farming Offer model include:

  • PancakeSwap.
  • Binance Smart Chain.
  • Sushi Swap.
  • Polkastarter

Interesting fact: The majority of Initial Farming Offers are conducted on PancakeSwap. Users of this platform receive rewards from fundraising campaigns. In addition, project owners can benefit from the liquidity pool on this platform. Also, remember that the vast majority of tokens presented during IFOs are community-driven and fully decentralized.

Types of IFO campaigns

  1. Basic sales, where investors can bet a limited number of tokens without paying a participation fee.
  1. Unlimited sales, where investors pay a set fee upfront and can bet as many tokens as they can.

If you want to participate in an IFO campaign, you first have to register on the DEX platform, which runs such projects. Then, as already mentioned, you place your tokens and participate in the IFO! As such, you as an investor are responsible for providing liquidity for the entire process, but you will be rewarded with tokens at the end.

Safety when participating in an IFO – what should you look out for?

  1. If a project proves uninteresting to the platform users, it will not take off.
  2. If a project is re-evaluated, the investments and shares will be reduced. This more or less means that your profits will drop drastically, or…you will lose everything.
  3. For IFOs, you should use a dedicated browser to interact with smart contracts. Preferably protected with a suitable antivirus program.
  4. Before interacting with IFOs – get to know the project and the network. This will help you avoid losing money due to faulty transmissions between networks.
  5. It would be good if you had a separate wallet for each project. This way you have more control over the coins and can manage access to the portfolio funds through the IFO smart contracts.
  6. Get to know the project before you invest in it. Pay special attention to the people in charge, the community and any other relevant data.
  7. With an IFO, there are no intermediaries involved in the whole process. The transactions are based on a Peer-to-Peer model, which saves time and money.
  8. IFO helps users maximize the benefits of using a particular DEX platform, so to speak.
  9. Thank you to decentralization, every IFO transaction is transparent.
  10. Initial Farming Offering campaigns are popular with new members of the cryptocurrency community who are looking for ways to make a quick profit.
  11. However, IFO tokens are also a great way to build a crypto portfolio and generate additional income.

Summary

ICO or other fundraising models mainly rely on investments from venture capital. In the case of the Initial Farming Offer, it’s a bit different, as we explained in today’s lesson. Of course, with IFO, the funding is much longer and the returns themselves are not particularly reliably defined. However, given the growing popularity of DeFi projects and the increasing number of them being submitted for this type of funding, IFO may become increasingly popular.

Complete your knowledge!

What is DeFi?

What is a smart contract?