Magic Square, a company backed by Binance Labs, has announced the launch of its new initial DEX offering (IDO) platform. This platform, built on a decentralized exchange (DEX), aims to provide retail access for Web3 investors with limited funds in a more democratic manner. Michael Landsberger, the chief operating officer of Magic Square, explains that their unique allocation strategies prioritize users with fewer funds, taking into account factors like user activity and ecosystem contributions.
To participate in investment rounds on the platform, users must first stake Magic Square (SQR) tokens to earn SQR points, which will determine their allocation size for certain projects that require participation points. Additionally, users can accumulate points by participating in the “Road-to-IDO” campaign before each project’s IDO launch. This campaign rewards users based on their activity within the new protocol’s community.
The objective of this new platform goes beyond providing financial support for emerging Web3 protocols. Landsberger emphasizes that Magic Square aims to be the first community-driven Web3 app store, addressing user acquisition and engagement challenges. Currently, the project has over 4.5 million registered users and more than 1,300 applications listed on its platform. Landsberger attributes the popularity of the protocol to its focus on organic growth and forming quality partnerships.
Magic Square is entering the rapidly growing industry of decentralized crowdfunding, joining the existing 109 IDO launchpads in the market. DAO Maker, the largest IDO launchpad, has a market cap of over $2 billion, which includes all the projects that raised funds on the platform. In terms of investor returns, Oxbull is the dominant IDO launchpad, with an average return on investment (ROI) of over ninefold. This surpasses the second-most profitable launchpad, ApeTerminal, which has an average ROI of over sevenfold, according to CryptoRank data.
IDO has become a popular fundraising method for crypto protocols. For example, MerlinSwap DEX, a Bitcoin-native protocol, raised 6,599 Bitcoin (BTC) worth $480 million during its IDO in April, attracting over 52,000 participants. The increasing popularity of IDOs is demonstrated by the significant returns that some protocols have achieved.