Ask the Orb: What is an Initial Farm Offering (IFO)?

3 min readJan 25, 2022

Initial Farm Offering (IFO) helps DeFi projects raise capital through the farming feature offered by decentralized exchanges.

Initial Farm Offering (IFO) is a fundraising model that assists new DeFi projects in raising funds by participating in pre-sales events hosted by decentralized exchanges after rigorous project vetting.

The initial coin offering (IFO) is a forerunner of the initial coin offering (ICO), a crowdsourcing mechanism used by cryptocurrency ventures to generate funding in the early stages.

Investors can join in a DEX-hosted pre-sale event to raise funds for available projects by investing in native tokens. DEX teams normally compile a list of the most profitable projects to launch during the farming event. However, it is worth noting that the tokens obtained through IFO have no evident advantage over those obtained through other fundraising methods. Despite thorough examination by the DEX experts, the token’s value might be influenced by market perceptions.

PancakeSwap is the most common IFO platform, and its members can benefit directly from the fundraiser. These users are eligible for incentives, while owners of new projects can benefit from the platform’s liquidity pool. The majority of these tokens are community-driven, with little to no central authority supervision.

Also Read: How to: Set up a basic cryptocurrency wallet

IFO incidents are classified into two types:

Unlimited Sale: For a set amount, the customer can stake as many BNB and CAKE tokens as they like.

Basic Sale: A predetermined number of tokens can be staked, with no participation fee charged to users.

The first step in becoming a member of an IFO is to open an account on any of the DEXs that allow this capability. Users then stake CAKE or BNB tokens (depending on the rules of participation) to participate in the IFO. They must provide financial support for the farming process. Those users are awarded such tokens at the end of the process.

The following are some of the advantages that IFO users enjoy:

  • The removal of the middleman. On the IFO platform, peer-to-peer transactions are encouraged, allowing users to save money in the long term even if they are new to the world of cryptocurrency.
  • IFO increases the benefits of trading on DEXs, particularly for individuals new to cryptocurrency.
  • Due to the dual-margin intention, project financing via IFO platforms is risk-free.
  • Decentralization ensures that all transactions and activity are transparent to users and investors.
  • Users can expect long-term gains as well as immediate liquidity.

As with any other fundraising event, it is ideal if each user researches the one that best suits them. IFO is ideal if you are new to cryptocurrency and want to make quick money. If you are just starting out with your portfolio or trying to make the most of your spare BNB tokens (as in the case of PancakeSwap), IFO is the greatest way to produce extra money. However, before investing in any coin, conduct thorough research and keep volatility in mind.

Previous fundraising strategies, particularly ICO, were primarily reliant on VCs, resulting in increased time consumption and unpredictable rewards. However, because IFO is still relatively new in comparison to ICO and IEO, some users may be hesitant to use it. However, the DeFi trend may shift the market’s focus to IFOs.

Also Read: Let’s Talk About DEX: AMA Recap

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