In the IEO, exchange as a third party must ensure that the smart contract of a project is correct and all goes according to plan. Whereas in the ICO, developers do it. In other words, the IEO allows crypto projects to raise funds directly on the exchange cryptocurrency platform.
In 2017 ICO projects sprung up, which then ran aground in 2018 due to the bear market. Along with the dimming of the ICO, several other models of fundraising emerged as alternatives. What currently makes big-time investors interested is the Initial Exchange Offering.
Along with the growing maturity of the fundraising mechanism on the blockchain, and many crypto projects that choose the IEO rather than the ICO, this article is expected to help those interested in understanding the meaning of Initial Exchange Offering and the differences with ICO.
The IEO model allows crypto projects to raise funds directly on the exchange cryptocurrency platform, which may be the reason why exchange has become a byword lately.
The Initial Exchange Offering is a new strategy for crowdfunding that is still not widely known for blockchain-based projects. In the ICO, the developer must ensure that the smart contract is correct and everything goes according to plan, while in the IEO, third parties - exchange crypto - are carrying out this.
The biggest difference with ICO is that the IEO does not sell tokens that are open to the public. This means that only active exchange users can participate. Unlike ICO, anyone can buy the coin.
For those who want to follow the sale of tokens, they must have an exchange account where the tokens are sold. Users must have funds in the account, and often are required to have a native token from the exchange to be able to join the IEO.
For example, Binance which organizes Binance Launchpad, they only allow users to buy tokens using Binance Coin (BNB).
Even though ICO can make more money because tokens are sold to the general public rather than active exchange users, ICOs are often held by scammers who only want to get money quickly and easily. The large number of ICO fraud cases may be one reason why such crowdfunding models are being abandoned.
Coins obtained from the IEO can be directly traded on the exchange platform after the sale. So this eliminates investor concerns about when tokens can be listed on an exchange, because ICO usually takes months to share and listing tokens in exchange.
The main reason why ICO is a better alternative than ICO is:
Trusted
By introducing third parties in a decentralized fundraising model, the IEO provides investors with a sense of security by working with trusted exchanges that provide credibility.
Bittrex Exchange had planned to hold an IEO for the Raid project, but was canceled the night before the sale began when it was discovered that the Raid team had no collaboration with the OP.GG e-gaming analytics data provider as they say. This indicates that Bittrex prioritizes user security rather than profit. Because the Exchange will not help scammers to raise funds because it can damage their reputation.
User-friendly
It's easy to do, because you only need to have an exchange account where token sales are held, fill your wallet and buy tokens when sales start.
By organizing the IEO, it means that exchange is also the first platform to list certain tokens. That's what happened with Binance Launchpad where Fetch and BitTorrent are only available exclusively in the exchange.
Exchange also benefits from free advertising provided by IEO-related advertisements by token sellers. This kind of exposure will bring in more users because everyone who wants to participate must register in the exchange before they can take part in selling tokens.
Along with the growing maturity of the fundraising mechanism on the blockchain, and many crypto projects that choose the IEO rather than the ICO, this article is expected to help those interested in understanding the meaning of Initial Exchange Offering and the differences with ICO.
What is an IEO (Initial Exchange Offering)?
The IEO model allows crypto projects to raise funds directly on the exchange cryptocurrency platform, which may be the reason why exchange has become a byword lately.
The Initial Exchange Offering is a new strategy for crowdfunding that is still not widely known for blockchain-based projects. In the ICO, the developer must ensure that the smart contract is correct and everything goes according to plan, while in the IEO, third parties - exchange crypto - are carrying out this.
The biggest difference with ICO is that the IEO does not sell tokens that are open to the public. This means that only active exchange users can participate. Unlike ICO, anyone can buy the coin.
For those who want to follow the sale of tokens, they must have an exchange account where the tokens are sold. Users must have funds in the account, and often are required to have a native token from the exchange to be able to join the IEO.
For example, Binance which organizes Binance Launchpad, they only allow users to buy tokens using Binance Coin (BNB).
IEO Benefits
Even though ICO can make more money because tokens are sold to the general public rather than active exchange users, ICOs are often held by scammers who only want to get money quickly and easily. The large number of ICO fraud cases may be one reason why such crowdfunding models are being abandoned.
Coins obtained from the IEO can be directly traded on the exchange platform after the sale. So this eliminates investor concerns about when tokens can be listed on an exchange, because ICO usually takes months to share and listing tokens in exchange.
The main reason why ICO is a better alternative than ICO is:
Trusted
By introducing third parties in a decentralized fundraising model, the IEO provides investors with a sense of security by working with trusted exchanges that provide credibility.
Bittrex Exchange had planned to hold an IEO for the Raid project, but was canceled the night before the sale began when it was discovered that the Raid team had no collaboration with the OP.GG e-gaming analytics data provider as they say. This indicates that Bittrex prioritizes user security rather than profit. Because the Exchange will not help scammers to raise funds because it can damage their reputation.
User-friendly
It's easy to do, because you only need to have an exchange account where token sales are held, fill your wallet and buy tokens when sales start.
Benefits for Exchange
By organizing the IEO, it means that exchange is also the first platform to list certain tokens. That's what happened with Binance Launchpad where Fetch and BitTorrent are only available exclusively in the exchange.
Exchange also benefits from free advertising provided by IEO-related advertisements by token sellers. This kind of exposure will bring in more users because everyone who wants to participate must register in the exchange before they can take part in selling tokens.
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