Cryptocurrencies

Binance Labs-backed Magic Square has announced the launch of its new Initial DEX platform

Binance Labs-backed Magic Square has announced the launch of its new Initial DEX (IDO).

The new crowdfunding platform is built on a decentralized exchange (DEX) and aims to democratize retail access for Web3 investors with limited funds, according to Michael Landsberger, chief operating officer at Magic Square.

Magic Launchpad achieves this through unique personalization strategies that equally favor users with less money by taking into account factors such as user activity and ecosystem contributions. Landsberger told Cointelegraph:

“This inclusive approach ensures that a greater number of community members can participate, rather than limiting opportunities to a select few, who are usually wealthier than others.”

Users who want to participate in investment rounds first need to stake Magic Square (SQR) tokens to earn SQR points, which will determine the size of their allocation to certain projects that require participation points.

Users can also accumulate points by participating in the “Road-to-IDO” campaign prior to each project’s IDO launch, which rewards users based on their activity within the new protocol’s community.

Landsberger explained that the new platform aims to provide more than just financial support for emerging Web3 protocols, such as post-IDO support and community building:

“We believe that IDO should be more than just a fundraising mechanism. If the focus is only on fundraising, the true potential of the industrial development organization will be missed. Our approach views IDO as a powerful tool for building a strong community and user base, ensuring long-term project success rather than simply securing operational funds.

Magic Square claims to be the first community-driven Web3 app store that aims to address user acquisition and engagement challenges. The project has more than 4.5 million registered users and more than 1,300 applications listed on its platform.

Landsberger attributes the protocol’s popularity to its focus on organic growth and high-quality partnerships. He said:

“We have built strong partnerships and have consistently delivered great value to both projects and users within our ecosystem. This dual approach of leveraging high-quality partnerships and delivering real value has been critical to our current growth and we will continue to drive our success moving forward.

Related: Binance is developing an “antidote” to tackle poisoning scams after a $68 million exploit

IDOs have become a popular source of funding for crypto protocols

Magic Square joins the fast-growing decentralized crowdfunding industry as the latest emerging protocol.

There are already 109 IDO launch platforms on the market, the largest of which is DAO Maker, worth more than $2 billion in summary market capitalization, which measures all projects that have raised money on the platform.

Oxbull remains the dominant launch platform for IDOs in terms of investor returns. Founded in 2021, the protocol has an average return on investment (ROI) of more than nine times, compared to the second most profitable protocol, ApeTerminal, which has an average ROI of more than seven times, according to CryptoRank data.

The Oxbull launch pad returns. Source: Cryptorank

IDOs have become a popular way for protocols to raise funds. At the beginning of April, Bitcoin’s native MerlinSwap DEX raised 6,599 bitcoins (BTC) worth $480 million during an IDO, which attracted more than 52,000 participants.

Related: Cryptocurrency Trader Turns $3K into $46M in One Month as PEPE Prices Rise

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