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 prioritise 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.

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
prioritise 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.

3. 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 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 script(written in js) and use web3 and other blockchain APIs to interact

4. with smart contracts. These bots look for new listings on multiple or
oneautomated 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 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.

5. 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 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.

6. 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.
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.

7. 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.