Crowdfunding has been the major strategy which crypto traders expect in the global market. ICO was the popular fundraising platform till now. These Blockchain-based Initial Coin Offerings picked around $90 million as profits with just 29 ICOs in the year 2016. While in the year 2017, ICOs reached to the hype by raising more than $6.2 billion.
However, as the platform was experiencing slight downfall, several other fundraising models have emerged and taken the center stage. One such strategy is Initial Exchange Offering which came into existence to eliminate these scams in the industry.
What is IEO Initial Exchange Offering?
IEO is a new strategy is for fundraising in Blockchain projects. An Initial Exchange Offering is a token sale conducted on a cryptocurrency exchange platform. This is administered by cryptocurrency exchange on behalf of the token issuer. Similar to Initial Coin Offerings, IEOs allows the investors to buy new cryptocurrencies or tokens to raise funds for promising Crypto projects.
IEOs try to promote only legit Blockchain projects since it put exchange’s credibility at a risk. Moreover, Initial Exchange Offerings are the new crowdfunding strategy for various crypto startups with Bitcoin Trading platforms acting as an intermediator.
With the help of cryptocurrency exchanges, projects managed to get significantly more exposure, reliability & interest. After a successful IEO, the token issuers pay a significant amount of fee along with the agreed amount of tokens for using IEO platform services. Soon, the tokens get listed on the exchanges where investors can access instant liquidity.
Thus, when it comes to IEO, both the exchange and the token issuer engage in token marketing.
Should one pick out IEO over ICO?
Before getting into the discussion on IEO Vs ICO, you need to know the primary difference between both!
The difference between IEO and ICO is immediate trading. IEO enables traders with spontaneous tradability.
Here is why one should choose IEO over ICO:
- Fundraisers now can get access to the existing user database of the audience.
- Exchange listing will get more access to the audiences.
- Scams can be prevented completely since the tokens are purchased only from the exchange.
Aspects of Initial Exchange Offerings:
Just like ICOs, IEOs offer the tokens & certain amount of coins at a fixed price. Added, Initial Exchange Offerings also limits on maximum & minimum tokens available for purchase by a single trader.
Any how unlike Initial Coin Offerings, IEO Coins are mined already before the crowdsale starts. Apart from this, they hit the exchanges several weeks or days after the IEO launch which helps the investors with instant liquidity. Additionally, the IEO process takes place with an intermediary (crypto exchange platform) which is trusted to handle the funds.
How to participate in IEO?
Participating in IEO is no longer a tedious task. This step by step guide for participating in IEO will help!
- Check whether IEO will be issued
Most cryptocurrency projects chose to crowdfund with ICO’s. Therefore the initial step is to check if the project chooses Initial Exchange Offering.
- Research on which exchanges will participate
Not all the exchanges participate in all times. Here you need to research on Know Your Customers(KYC) initially.
- Sign up on the exchange
The next step is to sign up on the exchange. So, if you don’t have an account on the exchange platform, create one by signing up.
- Which currency will be accepted?
For most of the time, Initial Exchange Offering will require Ether for investments, since there are a plethora of projects launched in the Etherum platform.
- IEO Initiation
Wait for the crowdfunding to start and then proceed on buying the desired token you were looking for!
How do Exchanges will be choosing the project?
The process will be the same as the traditional ones. As we have discussed already, raising the money with ICO doesn’t guarantee future success for the project.
It is important to assess the value of the market and the project’s desire to conduct joint marketing campaigns.
Why Initial Exchange Offering will be a good choice?
If this is your question, we have an answer for you!
Projects which choose Initial Exchange Offering will have the following benefits:
Projects composed with this strategy will have increased credibility because of the exchange factor. This can lead to low phishing in the crypto field.
- Fewer Scamming
Scams cannot be completely prevented but this platform ensures high-end security which can lead to increased confidence in the project.
- Price Manipulation
This can prevent Price manipulation to a certain extent in the cryptocurrency industry.
- Increased Investor Confidence
Here investors don’t deal with the IEO team directly. Rather they deal with the exchanges which makes it more trustworthy and secure.
- Guaranteed Exchange Listing
IEO tokens are listed on the exchange platforms soon after the IEO gets over.
IEO Success Stories to watch out in 2019:
In addition to these features, there are already lengthy popular IEO Success stories in 2019.
- Matic Network by Binance Launchpad has enhanced its ROI by 804%.
With Matic Network, most of the scalability & usability issues were resolved completely. It tries to get rid of the problems through Blockchain and Consensus Algorithm. In total, $5,000,000 were raised during the token sales.
- Celer Network by Binance Launchpad has enhanced its ROI by 197%.
While Celer Network brings in off-chain network solutions to Blockchain platform. In total, $4,000,000 were raised during the token sales.
- BlockCloud by OKEx IEO has enhanced its ROI by 133%.
BlockCloud token was mainly facilitated for IoT solutions. It managed to raise around $2,500,000.
- Newton Project by Huobi Prime has enhanced its ROI by 87%
The major motto of the Newton project is to allow users to control and manage own data with cryptocurrencies. In total, $28,553,995 were raised during the token sales.
What are the Advantages of IEO?
There are great Benefits of IEO in the crypto capital. Here are a few:
- Initially, only good tokens are distributed through the exchange as it is directly or indirectly relates to the reputation of exchange. This will lead to a better token listing.
- Exchanges also benefit from this strategy. Since the cost of IEO to launch is also simple compared to ICO. IEO is stable and secure compared to ICO
- Exchanges offer better liquidity than traditional ICO’s where the tokens are listed in the exchanges after a certain amount of time.
- Added, Exchanges offer better user interaction and thanks to the user-friendly interface. This enables new users to interact with IEO and contribute to the project which they like.
Real-Time IEO Projects in 2019:
A good number of crypto trading platforms have started IEOs for them. Here are the real-time projects in the cryptocurrency industry:
- Binance Launchpad
Binance, one of the popular Bitcoin Trading platform started to give fantastic results during its initial stages itself. Bittorent was the token listed here and it managed to raise around $7.12 million in less than 15 minutes. While the second project was Fetch.AI. It overtook the former project by raising around $6million in just 10 seconds.
- Bittrex International IEO
Bittrex announced its token sale on March 15, 2019. It was said that around 2655 users purchased the tokens until the date April 30, 2019. While yet another project called Ampleforth raised around $5 Million on Bittrex platform in just 11 seconds.
- KuCoin Spotlight
Yet other popular decentralized crypto exchange called KuCoin initiated IEO on its trading platform. Around $3.5million was raised in the token sales.
Apart from these platforms, other exchanges such as BitMax (BitMax Launchpad), Huobi (Huobi Prime), OKEx (OKEx IEO) have assisted the startups to fundraise their projects.
Upcoming Initial Exchange Offerings in the crypto industry:
Here are some of the Initial Exchange Offerings which are expected in the market:
- AIVIA by ABCC.
- Bitpanda by Bitpanda.
- Blockium by Coineal, BitForex.
- Telegram Gram Token by Liquid.
- Origin by Probit.
- Moozicore by Latoken.
- Geco.one by Coineal.
- MPCX by Probit.
- Wirex Token by OKEx.
- iOWN by Latoken.
- Blabber by IDAX.
So, What is the future of IEO?
Fundraising has been the most crucial way everyone is marching towards! This approach can bring a lot number of potential customers for your business which can boost the profits. Added, it might help to make cryptocurrencies and exchanges more appealing to the global market.
With regards to, security and efficiency, IEO’s will continue to sustain the crypto space. At present, they are in inductive stages, once they are very well adopted among the investors, they will be the future of fundraising schemes without any doubts.
As IEO’s are intended to solve the problems of the investors with fundraising, they remain as the promising future of fundraising. Moreover, IEO’s are most profitable for exchange platforms as well. One present example is, Binance eliminates the trading fee for those who pay with BNB! The thing here is, they compensate for the loss of a transaction fee with gaining the users for its own token!
To put in it simply, IEO will be a future of fundraising phenomenon that would stay here for a long time. In the long run, IEO’s will change the face of crypto banking sectors to make its headway towards the right destination. For the year 2019, we can expect a great number of IEO projects to be launched.
If you Hire IEO developers you will avail the benefits such as:
- Higher security for the users.
- Increased Transparency compared to the former approaches.
- A Good system for new users and beginners.
- What more than consisting of a reliable banking system.
Why do you need to hire the IEO Development Company?
Since IEO has been the latest strategy, people need to brush up with the information to keep ahead of the race. As discussed earlier, once this scheme gets well-adopted among the investors, we can expect them to remain in the long run.
If you love our article or have views on the same, you can record them through comments below! Meanwhile, if you looking to launch IEO for your business, you can get in touch with us!
Why not contact us for a chargeless consultation?