Crypto Dictionary

All You Need to Know About SHO (Strong Holder Offering)

Learn the most important things about Strong Holder Offering, the eligibility criteria for SHOs, as well as the refundable SHO (rSHO) model and what makes SHO special.

The popularity of cryptocurrencies is rising day by day. Alongside the rising adoption and global recognition, a number of cryptocurrency projects are coming up every day.
 
However, it is not easy to raise funds for these projects. There are numerous ways to raise funds, and each one has different criteria. One such method is SHO, or strong holder offering.
 
Due to its significance and relevance in the industry, fundraising is one of the unique activities in the cryptocurrency space that cannot be ignored. There are many platforms for fundraising that were developed primarily to support business growth while assisting them in raising money to prevent financial setbacks. The WHO, SHO, IEO, IGO, IFO, and IDO fundraising models are among the most well-liked ones.

Key Takeaways

  • SHO (Strong Holder Offering) is a fundraising mechanism that has certain criteria for the eligibility of investors.
  • In SHO, prospective buyers are chosen based on their on-chain activity and other private data sets.
  • The SHO model is a product of DAO Maker which is heavily used to help roll out new projects in the cryptocurrency space.
  • SHO also enables participants to request refunds if they wish to withdraw their support after DAO Maker's offering update.
  • Projects must pass a number of tests before DAO Maker lets an SHO in, ensuring only quality projects apply.

SHO in a nutshell

An SHO is a fundraising mechanism that has certain criteria for the eligibility of investors. Let's take a deeper look at what a strong holder offering is and how it works.

In Strong Holder Offerings (SHOs), a type of crowdfunding, prospective buyers are chosen based on their on-chain activity and other private data sets. A "Strong Holder Offering," specifically, enables a project to raise money from people who own a particular cryptocurrency. An SHO model is a product of DAO Maker that is heavily used to help roll out new projects in the cryptocurrency space.
 
SHO investigates the on-chain activities of every KYC-ed user who owns more than a certain amount of any token. It is a funding method for cryptocurrencies that enables startups to create custom communities based on desired characteristics.

Eligibility criteria for an SH0

SHOs are available to individuals who have owned rival cryptocurrencies for six months or who have been active liquidity providers on a decentralized exchange. An SHO may also target people who have transacted more than $1-5 million in the previous month.
 
The framework typically helps cryptocurrency projects as well as "strong hands" investors, or those who can hold onto a coin for a long time. By selecting them as members of an SHO and providing them with protection, the DAO maker rewards investors with strong hands.

  • Holding a particular rival token for a predetermined amount of time, typically 3-6 months;
  • Holding a token worth at least $10,000 for a period of one year;
  • Being a frequent liquidity provider on a decentralized exchange (DEX)
  • A minimum of $1–5 million in transactions in the last 30 days.

The list above is simply a cluster of examples. Projects can select other criteria as they see fit, focusing on candidates who have demonstrated a history of showing an interest in related products, exhibit positive holding, or LP, behaviors, and have a history of attending project-related events.

What is rSHO?

This crowdfunding model also enables participants to request refunds if they wish to withdraw their support after DAO Maker's offering update. SHO is already known as a refundable Strong Holder Offering (rSHO).
 
Up until now, an SHO had the opportunity to locate and bring on board high-quality retail by placing all the advantages on the project's side. High-quality retail, however, does not receive much in return.
 
Refunds as a stipulation in a Strong Holder Offering ensures that only quality projects even care to apply because underwhelming teams or performers would ultimately have to give a refund. DAO Maker is prepared to provide a more dependable SHO pipeline with this update to the SHO model.
 
Refunds are canceled if a project maintains its value at 400% of the token's price at the initial SHO token sale price for more than four months after the initial SHO sale.

What makes SHO special?

A project must pass a number of tests before DAO Maker lets an SHO in. By doing this, only a few startups are able to provide the service in a year. This ensures that only initiatives that can follow one‘s roadmap will attempt to apply, discouraging con artists and subpar startups.
 
Strong Holders Offering employs a novel model that allows investors to withdraw support for a specific project if certain conditions are met. More specifically, it gives participants the right to a refund.
 
By bridging the gap between startups and established businesses, these crowdfunding technologies help businesses raise money using blockchain and decentralized finance in order to fund further expansion.

FAQs

Who is typically eligible to participate in a SHO?

Investors typically eligible to participate in a SHO include venture capital firms, private equity firms, hedge funds, and high-net-worth individuals.

Are there any risks associated with SHO?

The risks include market risk, liquidity risk, and the risk that the token or coin may not achieve its intended purpose. It is important to do your own research and understand the risks before investing. 

What are the terms of SHO?

Terms of SHO vary depending on the offering. Generally, SHO offers a discount to long-term holders of a token or coin, in exchange for committing to hold the token or coin for a certain period of time. The discount is usually larger for those who hold the token or coin for a longer period of time. 

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