How to conduct your IDO on Mesa

9 min readAug 20, 2020



Initial DEX Offerings (IDO) are a new form of capital formation and token distribution. Some projects (UMA, bZrx) listed on exchanges that are automated market makers like Uniswap or Balancer, while others (like MTA, DIA) conducted their IDO on Mesa, which is built on top of the Gnosis Protocol. The document below provides all the information you need to conduct your IDO on Mesa.

What is Gnosis Protocol?

Gnosis Protocol is a fully permissionless DEX (decentralized exchange) facilitating batch auctions that occur consecutively every five minutes. In each batch auction, Gnosis Protocol settles trades with uniform clearing prices, which eliminates front running and enables fair and equal opportunity of participation.

Gnosis Protocol also enables ring trades to maximize liquidity. Ring trades are order settlements which share liquidity across all trading pairs, rather than a single trading pair. Ring trades are achieved by aggregating all orders into a single order book, in practice allowing trades from and to any token, consequently improving liquidity.

Read more about Gnosis Protocol here or get into the details in the Developer Portal.

What is Mesa?


Mesa is the first dapp built on Gnosis Protocol. Mesa is a general trading interface that supports simple market making strategies for stablecoins. Mesa is maintained, owned, and hosted by DXdao, an organization leading the evolution toward a more “de”-centralized DeFi.

The website is hosted on IPFS under an ENS domain (mesa.eth) owned by the DXdao. New releases require a passed proposal from the DXdao which makes it more secure and less prone to various hacks like domain hijacking.

What is the DXdao?

The DXdao is a decentralized organization initialized in May of 2019 with over 400 unique stakeholder addresses. The DXdao is owned and operated by the community, which develops, governs, and grows DeFi protocols and products. The DXdao splits voting power (REP or reputation) from financial value (DXD token). This unique structure enables the DXdao to scale its governance and membership.

A good place for getting involved is the main DXdao chatroom.

What are the main advantages of an IDO over the custom ICO model or an IEO (Initial Exchange Offering on centralized services)?

  • The sale strategy (including price, sale period, and volume) can be tailored to the issuer’s needs.
  • The sale strategy is easy to set up, and is fully customizable.
  • No smart contract coding is required.
  • The token issuer is in full control, maintaining custody of funds throughout the self-organized process.
  • DEXs usually enable permissionless participation for users, which means that no approval from an operator is necessary.

What are the advantages of using Gnosis Protocol for an IDO over other options in the market?

  • The IDO issuer is not required to supply buy side liquidity, whereas on DEXs like Uniswap, supplying ETH is required for liquidity.
  • Price finding within one batch eliminates initial price guessing and prevents losses from too low price estimations. (More information on this is available here.)
  • The issuer can post the sell orders in advance and with a specified activation date. This makes the process more transparent and allows buyers to place their orders in advance.
  • Buyers can use many different tokens to participate in the sale, leveraging the liquidity enhancing ring trade functionality of Gnosis Protocol.
  • Front-running resistance prevents efforts by speedy bots or miners (“gas wars”) to get ahead of other users to fill orders. The best orders will be settled regardless of their attached gas price.
  • The same clearing price is guaranteed for all orders within the same batch auction. This means there is no arbitrage across trading pairs and fair pricing for participants in the same batch.
  • Gnosis Protocol is fully permissionless, which means there are no admin keys, and tokens cannot be delisted.
  • The trading fee is only 0.1%. (The trading fee is included in the limit price when placing an order, enabling a smooth user experience.)
  • In contrast to Dutch auctions, the sale will never execute below the predefined limit price.

While any token can be listed on Gnosis Protocol, listing on the Mesa interface requires going through a listing process. What are the advantages of being listed on the Mesa dapp?

By reaching out to the DXdao, the issuer’s token becomes available as a token on the Mesa UI. This means it is easily accessible to traders on the DEX (e.g., with ~2k unique participants of previous IDOs) and accessible to traders who may not have been previously exposed to your token.

For IDO participants, this eliminates the need to manually add the token using the contract address, which can be prone to errors and could create an opportunity for scammers.

Additionally, a deeper partnership with the DXdao is possible and can include:

  • Marketing support from the DXdao community for the listing of your project.
  • DXdao is one of the most active communities in Ethereum. You will have long term strategic alignment with DXdao’s initiatives and future product offerings. This partnership would provide valuable exposure and feedback from experienced and well-versed builders in the Ethereum community.
  • Governance As A Service (GaaS): the DXdao can participate in the project governance, bringing its knowledge and experience in governance of DAOs and DeFi products.

Why not just list on an AMM DEX (Uniswap, Balancer, etc.)?

Traditional AMM DEXs are great for bootstrapping liquidity, but they suffer from a few problems when it comes to price finding and fair participation.

Gnosis Protocol’s batch auction mechanism resists front-running and enables anyone to submit their bid. Each batch settles with uniform clearing prices, meaning all participants in a single batch will buy at the same price across all token pairs.

What are the typical steps adopted by projects for conducting an IDO on Mesa?

  • List the token on Gnosis Protocol (Tutorial)
  • List the token on Mesa by adding it to a TCR controlled by the DXdao (Tutorial)
  • Form a sale strategy to best fit your needs (A strategy explainer is in the works)
  • Write a script to deploy the strategy. The script is basically submitting a list of orders to Gnosis Protocol according to the sale strategy. An example strategy script and deployment tutorial is available here.
    It is strongly advised to test order placement on the rinkeby testnet and/or deploy the orders in advance for the public to verify their correctness.

How is a bonding curve defined on Mesa?

A bonding curve, or generally any IDO strategy will be represented as a set of limit orders on Gnosis Protocol. Those orders can be submitted through Mesa but usually will be defined using a script like the CMM script.

What token users should use to participate in the sale?

A sale can be designed to raise funds in one or multiple tokens, popular ones are USDC, DAI, and WETH.

The concept of ring trades enables users to use any listed token to buy into the sale regardless of the token the sale is designed to raise. Gnosis Protocol’s functionality will facilitate the required conversion in order to complete the trade. (This concept is explained in detail here).

It is important to note that all the required conversions will be made using the existing liquidity on GP at the time, and that some tokens may differ and not have a lot of liquidity at the moment of the sale.Sticking to the popular tokens can therefore be helpful.

Please make sure users use tokens that have sufficient liquidity on GP. Alternatively users can be guided to use only the tokens which the sale is designed to raise (for example, USDC).

Is there a start and end time for public sale on Mesa?

Yes, the start and end of a sale are relatively customisable. The sale starts when the team decides and can be controlled by setting a valid_from parameter for the orders, or by depositing the tokens (and the orders) only when the sale starts.

The sale ends either when 1) all tokens have been bought or 2) at a predefined time at which proceeds will be withdrawn, and/or defined by the valid_until parameter of an order.

Is there a hard cap for a sale on Mesa?

The total amount of tokens for sale is controlled by the team through the sale strategy. The settlement price for the tokens will be influenced by demand from participants. Technically, participants can bid arbitrarily high prices. This means the amount raised is uncapped on a technical level, but is ultimately controlled by the amount of tokens offered for sale.

Does the team have to provide the issuance tokens and funds for liquidity in Mesa? Or just the tokens?

Both options are possible, and it is absolutely up to the sale strategy that is chosen by the team. Usually, only the issuer’s tokens will be initially deposited into the sale strategy.

How does Mesa facilitate price discovery?

On Gnosis Protocol, a centralized operator is replaced by an open, incentivized competition to which anyone can submit order settlement solutions to the recurring batch auctions. Those who submit order settlement solutions are referred to as “solvers.” Solvers are economically incentivized to submit order settlement solutions that maximize trader welfare*. In summary, instead of settling orders exactly at their limit price, on Gnosis Protocol solvers determine prices by computing the intersection of the supply and demand curves. This means that every order can be settled at its limit price or with a better price, according to supply and demand dynamics at the time of settlement.
*Detailed documentation about this process is available here.

In some situations, orders can be “forced” to settle at their limit price and not at the fair price. Thus it’s important to set the limit price at a reasonable valuation and not to 0, in which case it will represent a pure market order.

How to make sure liquidity is sufficient also after the sale ends?

The Custom Market Maker strategy enables anyone to add liquidity to any token pair listed on Gnosis Protocol. The CMM is a passive strategy, meaning there is very little maintenance needed after it is deployed, and liquidity is automatically adjusted according to price movements. In summary, the strategy is very similar to providing liquidity in Uniswap pools, but allows users greater customization features, such as higher capital efficiency, providing unequal amounts of tokens, and more. A detailed explanation of the strategy is available here, and there’s a tutorial for deploying the strategy using a script.

What strategies did previous IDOs on Gnosis Protocol use?

DMG, MTA, and DIA are just a few of the IDOs launched on Mesa and the Gnosis Protocol.

In DMM sale, demand increased gradually, so token allocation completely sold out in 48 hours. There was, however, enough room for participants to participate in those 48 hours.

In contrast, the MTA sale was oversubscribed from the beginning, so all tokens were sold after 30 minutes, allowing 130 participants to take part in the sale.

The DIA IDO achieved much broader participation with more than 1500 participants. It used a bonding curve for better price discovery as participants can buy and sell during the sale. DIA ensured the sale would last for two weeks by choosing a price curve that increases slowly at the beginning and then sharply increases (sigmoid), ensuring supply is always available for participants that would like to buy the token. If the price trends downward during the sale, a portion of the proceeds is used to buy back their own token. In this way, the team ensures that there is no price crash, and the prices are distributed in a fairer manner.

Are there any risks involved with market orders on Gnosis Protocol?

There’s a possible way to take advantage of market orders on Gnosis Protocol documented here.

ELI5: Someone could compose a specific solution for trade settlement that is contradicting the protocol’s design goal of fair prices. In this scenario, they will be able to settle orders exactly at the limit price and not at the fair price. This will enable him to extract some value from other participants, and thereby be ahead of them in an auction.

This will not compromise security of deposited funds or enable fulfillment of orders below their limit price. Every limit price (of the project and their user) is always kept when trades are executed!

Why do users need to wrap their ETH?

Gnosis Protocol works only with ERC-20 compliant tokens. Hence, ETH needs to be wrapped into WETH before depositing it to Gnosis Protocol. This can be done on Mesa under the Balances section.




The DXdao is a decentralized organization, owned and operated by the community. It develops, governs, and grows DeFi protocols and products.