IEO

What Is An Initial Exchange Offering?

An Initial exchange offering, or IEO, is a fundraising exercise that occurs on cryptocurrency exchanges. In recent years, Initial coin offerings (ICOs) have lost their appeal in recent years and many crypto projects have begun raising funds via an initial exchange offering. An Initial exchange offering in the decentralized crypto world is equivalent to a stock launch or Initial public offering (IPO) in traditional finance.

In contrast to an ICO, where the project team conducts the fundraising themselves, in an Initial Exchange Offering, the fundraising is done on a popular exchange’s fundraising platform. An example can be the Binance Launchpad.

Exchanges act as intermediaries between investors and the startup, profiting from fees generated by services rendered during the due diligence process and funding phase. Though, there are various similarities between IEOs and ICOs, the former can be seen as an evolution of ICO because of legal influence and greater financial regulations within the cryptocurrency market.

The initial use of an IEO by a leading exchange was in January 2019, with the launch of Binance Launchpad. The platform’s first and foremost use was with BitTorrent Tokens (BTT), which raised an amount worth $7.1 million in fewer than 18 minutes. An example can be the Binance Launchpad. Binance has so far launched 63 projects. Binance’s venture into the IEO space further invited additional exchanges to offer similar services.

Advantages Of Initial Exchange Offering (IEO):

IEO’s facilitate startup companies to participate in large-scale fundraising via a trusted intermediary that verifies transactions and manages the funds raised during the capital generation process. Unlike an ICO, the startup does not require to organize and conduct the fundraising process. The duties are governed by the exchange, which can complete transactions, manage currency wallets, and transfer funds from various blockchains to customer wallets.

Users can easily participate in IEO as they don’t require to manage on-chain transactions with various wallets on distinct blockchains. Users only require an account and some funds in their account on the exchange and can participate fully via the trusted website’s interface.

Furthermore, the exchange stakes its reputation by backing the projects on its platform, offering a high degree of confidence behind the project.

How To Launch an IEO?

• Establish a reputable team
• Have an MVP or Prototype
• Tie up with top exchanges
• Read legal requirements carefully
• Design a detailed white paper
• Invest in token development
• Create a clear funding goal
• List your tokens
• Finally, find different ways to market your IEO project

Also Read: Top Upcoming IEOs

Trending

ASTER token symbol with upward graph showing strong price growth in crypto market.

ASTER Leads Perp DEX Volumes Despite $4.8M Wintermute Transfers

SEC to review XRP ETFs Between October 18–25.

SEC to Decide on Six Spot XRP ETF Applications in October

Ethereum coins symbolizing price drop and market volatility trends.

Ethereum Exchange Supply Drops 52% as $3,700 Liquidation Risk Grows

About author
Disclaimer

Priyanka likes writing research-based, informative articles for investors, especially those who are new in the market. She holds MBA and is currently dwelling into the financial market.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

Share on

Follow on Twitter

Share on

Follow on Twitter