The IDO is portrayed as the replacement for fundraising models like ICO, STO, and IEO as it provides greater liquidity for crypto assets and more fast, transparent, and equitable trading. IDO is one of many inventive ways for raising funds. However,the Initial Coin Offering (ICO), was the first method of raising funds in the cryptocurrency industry and it caused a lot of controversy in 2017. Just about any ICO project could offer huge returns, and many did. Many ICO ventures turned out to be illusions or, worse, scams in an effort to make easy money. They also damaged the reputation of the cryptocurrency market and discouraged many potential new investors from joining. To know more about ICO read-Evaluating ICOs: Importance of Soft Cap and Hard Cap Decentralized finance (DeFi) uses several fundraising strategies to try to solve this issue. The IDO model is one such example. Crypto investors now have access to a different, more inclusive crowdfunding model due to DEXs. However, hacking assaults can cause significant financial and reputational harm during the Initial Dex Offerings (IDOs). This is why token issuers should prioritize protection against these sorts of assaults. Preventative interventions allow for the reduction of the hazards associated with these assaults. In order to understand how these hacking attacks pose a risk to an IDO's reputation, we must first understand how an IDO works. How does an IDO work? The decentralized exchange is used by an IDO to carry out the token sale. The DEX receives tokens from a cryptocurrency project, customers deposit money through the platform, and DEX handles the ultimate distribution and transfer. The blockchain's smart contracts enable this automated operation. The IDO regulations follow these standard methods. After the screening process, they approve a project to run on an IDO, and after they issue a supply of tokens for a fixed price, the users can lock their money in exchange for these tokens. To be included in the investor whitelist, you must do marketing activities, or you can provide your wallet address. The remainder of the funds are handed to the team, and some are utilized to build a liquidity pool. After the TGE(Token Generation Event), investors trade the token, and typically, the liquidity is locked for a specific amount of time. Tokens are given to users at the TGE, after which the liquidity provider is made available for trading.

1. What is an IDO? How can IDO be attacked?
The IDO is portrayed as the replacement for fundraising models like ICO, STO, and IEO as it
provides greater liquidity for crypto assets and more fast, transparent, and equitable trading.
IDO is one of many inventive ways for raising funds. However,the Initial Coin Offering (ICO),
was the first method of raising funds in the cryptocurrency industry and it caused a lot of
controversy in 2017.
Just about any ICO project could offer huge returns, and many did. Many ICO ventures turned
out to be illusions or, worse, scams in an effort to make easy money. They also damaged the
reputation of the cryptocurrency market and discouraged many potential new investors from
joining.To know more about ICO read-Evaluating ICOs: Importance of Soft Cap and Hard Cap
Decentralized finance (DeFi) uses several fundraising strategies to try to solve this issue.
The IDO model is one such example. Crypto investors now have access to a different, more
inclusive crowdfunding model due to DEXs.

2. However, hacking assaults can cause significant financial and reputational harm during the
Initial Dex Offerings (IDOs). This is why token issuers should prioritize protection against these
sorts of assaults. Preventative interventions allow for the reduction of the hazards associated
with these assaults.In order to understand how these hacking attacks pose a risk to an IDO's
reputation, we must first understand how an IDO works.
How does an IDO work?
The decentralized exchange is used by an IDO to carry out the token sale. The DEX receives
tokens from a cryptocurrency project, customers deposit money through the platform, and DEX
handles the ultimate distribution and transfer. The blockchain's smart contracts enable this
automated operation.
The IDO regulations follow these standard methods.
○ After the screening process, they approve a project to run on an IDO, and after they
issue a supply of tokens for a fixed price, the users can lock their money in exchange
for these tokens.
○ To be included in the investor whitelist, you must do marketing activities, or you can
provide your wallet address.
○ The remainder of the funds are handed to the team, and some are utilized to build a
liquidity pool. After the TGE(Token Generation Event), investors trade the token, and
typically, the liquidity is locked for a specific amount of time.
○ Tokens are given to users at the TGE, after which the liquidity provider is made
available for trading.
Types of Attacks
Smart Contract Manipulation
Given that the rules for carrying out agreements are entirely automated and hard-coded into
algorithms, smart contracts provide a creative way to promote trustless exchanges. Smart
contracts are like digital programs that can operate independently and according to a set of
instructions.
However, inadequate design or programming flaws have led to hacks of smart contracts. In
2018, hackers got direct access to an ICO launchpad, KickCoin's smart contracts. The hackers

3. acquired control of 40 accounts, which they afterward deleted and recreated with another 40
very similar ones.
When multiple victims complained, the platform owners were made aware of the hack, and an
audit later revealed that customers had lost tokens. Fortunately, the KICKICO team recover
access to its smart contract a short time after the attack and replaced the compromised private
key with the key from its cold wallet to protect the remaining funds. The site also paid out and
replaced the 40 wallets that had been the target of the hack.
Smart contract code flaws can lead to serious problems for a network from hackers. Other
issues can arise from a badly built smart contract, like missing money, duplicate tokens, and
even scripts intended to control the token creation process.
Bot attacks
A bot attack uses automated online requests to trick, deceive, or interfere with a website, app,
API, or end users. Bot assaults began as straightforward spamming operations but have now
developed into sophisticated, global criminal organizations with independent economies and
infrastructures. These assaults can be categorized into three groups. Sniping bots,
Front-running bots, and Combined attacks fall under these categories.
Using Sniping bots
If you have ever traded in Defi, you have probably witnessed coins being sniped at the very
moment of their debut and the prices inflating. These bots are scripts(written in js) and use
web3 and other blockchain APIs to interact with smart contracts. These boots look for new
listings on multiple or one automated market maker (AMM).
Simply, the algorithm essentially purchases the newly launched coins with the most gas, and
since it is an algorithm, it does this faster than any human could. Based on their respective
liquidity levels, the attacks vary. The bots have an unfair edge over the token price when they

4. respond to changes in liquidity levels. The bot now has the option to inflate the price. This
causes an oversupply in the market and a domino effect on sales.
These bots' creators may use them themselves or sell them to other people. The bots require
regular upgrades that concentrate on the appropriate measures. While a single sniper bot can
be controlled, hackers deploy hundreds of them. A centralized reaction to the attack is
necessary. Hackers start social media campaigns targeting users. The bots charge initiatives
operating via IDOs with defrauding the users. The combined result hurts the reputation of
companies.
Using Front running bots
A front-running bot checks pending transactions and pays a higher gas charge so that miners
execute its transaction first, to front-run a large deal that will have an impact on market price.
They modify the sequence of transactions within a block while paying out more money for gas
and the transactions are given priority status by the exchange when it comes to processing their
transactions.
Front-running bots are more complex to manage as compared to snipping bots. The primary
cause is the complexity of the algorithms themselves. Additionally, the operations take place
more quickly. The degree of automation is what causes these bots' natural complexity. It
enables instantaneous determination of the ideal transaction size.Front running is legal since
data is available on a digital ledger. The activity is also prohibited in the financial markets.
While enhancing security and safety is the responsibility of the projects undertaking IDOs, the
front-running bots should be the focus of these measures.
Phishing and Wallet exploitation
Over 50% of the money stolen is still lost to this kind of fraud, making it the most significant
threat during launching IDOs too. Criminals create intricate, multi-step plans using all
conceivable community influence channels. They can use various phishing techniques and

5. disguise users to steal tokens from their wallets.It's critical to remain alert at all times for any
indications of potential fraud on the non-programming side of an IDO. Not every team member
is aware of, or necessarily cares about, online safety, even though programmers and other
tech-side staff may be sensitive to cybersecurity trends and best practices.
Criminals who used banking Trojans to finance their unlawful operations are now changing
their tools to concentrate on cryptocurrency, which makes this market appealing to them. They
pose a threat to traders, cryptocurrency users, and owners in addition to IDO ventures. An IDO
needs to use an address verification service as hackers can also change the official wallet
address with their own and can steal tokens. project wallets can be stolen, and the tokens can
be moved to an unauthorized address.
Consequences of these attacks
Projects and businesses conducting IDOs can suffer reputational harm, which leads to losing
future funding opportunities and other significant operational difficulties. A company's
engagement with its customers can become worse.Hackers can manipulate the prices of tokens,
and increase gas fees which will hurt the sentiments of the issuers and investors. So, Companies
and developers should focus on removing these possible dangers for their project’s IDO to be
successful.
The blockchain industry suffers reputational harm as a result of these attacks. Millions have
been spent on safeguarding a project's IDO from these threats. The financial element of cyber
security during IDOs focuses on removing or avoiding possible danger. The parties concerned
are better protected with such a strategy.
For example, during the project's IDO on PancakeSwap, 111PG was asked to provide protection.
Recently, the security mechanisms offered by 111PG prevented sniping bot assaults.Making
basic preparations is necessary to stop these attacks. Each step should handle a certain attack
type.

6. Protective Measures
Companies use a variety of preventative and security measures to support the projects
throughout the IDOs. These strategies concentrate on identifying liquidity peaks and
responding to these alterations. Protective measures also rely on algorithms, similar to the
scripts that bots use, the timing of the response is backed by these algorithms. Avoiding damage
to the IDO is the key problem in putting these measures and solutions into action. Maintaining
the ease and speed of the transactions is crucial at the same time. Projects can identify issues
before they become major crises by doing a pre-IDO audit of smart contracts with a focus on
security and penetration testing for blockchain apps and smart contracts.
The current state of the industry presents another significant challenge: widespread awareness
of the issue. Ironically, many token project creators aren't even aware of the risks they may face
during an IDO. Knowledge is a crucial element of our total security. Therefore, it is necessary to
talk about the issue of hackers and their effects on the market more frequently. Establishing
cybersecurity in crypto as a standard practice rather than an exception will assist in enlisting
more specialists in the cybersecurity solution.
Conclusion
Any technological advancement, especially one involving the internet, is always accompanied by
an increase in fraud. And they frequently achieve success far more quickly than anyone else.
Therefore, being aware of an issue already leads to its solution.IDO is unarguably the next phase
in blockchain finance (DeFi). Still, we must wait to see how it will evolve and align when several
lessons are learned. Companies should focus to prevent these attacks from harming their
reputation and investing in the security of these IDOs.