Memo for XPort Hub Launchpad Partners

Community Projects
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ito
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Why Launching Token Sales on Exchanges Simultaneously with ITO is Not Recommended

Key Risks of Simultaneous ITO and Exchange Trading

  1. Demand Dilution
  • Users may opt for a more advantageous purchase channel (e.g., if the exchange price is lower due to speculation).
  • This reduces interest in the ITO and negatively impacts its results.
  1. Price Arbitrage Risks
  • If the token price on the exchange drops below the ITO price, participants will prefer to buy on the exchange.
  • This undermines the value of the ITO process and could result in losses for early investors.
    3. Reputational Damage
  • Conducting an ITO while simultaneously listing tokens on an exchange can appear as a lack of strategy or an attempt to “cash in” on the project.
  • This erodes investor trust and raises doubts about the project’s long-term vision.
  1. Liquidity Management Challenges
  • Maintaining liquidity on an exchange requires significant resources.
  • This may distract the team from executing a successful ITO and addressing other key project goals.

When Simultaneous ITO and Listing Could Be Justified

Such a strategy may be justified in rare cases, such as:

  • Strong Community Support: The project already has an active and loyal audience ready to sustain the token price on the exchange.
  • Exclusive ITO Benefits: Participants in the ITO receive additional advantages, unavailable to exchange buyers (e.g., bonuses, exclusive features, or rights).

Recommendations for a Successful ITO

  1. Sequential Approach
  • Conduct the ITO first, providing participants with clear conditions and benefits.
  • After the ITO concludes, organize the token listing on an exchange to ensure liquidity.
  1. Value Creation
  • Ensure the token has real utility (e.g., use within the platform, staking, etc.).
  • This fosters long-term interest in the project and price stability.
  1. Transparent Communication
  • Inform the community and partners about your ITO and listing strategy in advance.
  • This builds trust and aligns expectations with stakeholders.

XPort Hub’s Position

The XPort Hub team reserves the right to suspend token listings under the following circumstances:
• If token trading on an exchange is launched simultaneously with the ITO, disrupting the harmonious fundraising process.
• If the ITO is conducted across multiple launchpads with differing sales conditions, creating price inconsistencies and eroding participant trust.

Conclusion: Simultaneous ITO and exchange sales or conducting ITOs on multiple launchpads with varying terms introduces unnecessary risks and undermines the campaign’s effectiveness. Best practices involve conducting ITOs with unified, transparent conditions, followed by exchange listing to attract new participants and develop the ecosystem further.

Thank you for your understanding and support!
XPort Hub Team

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