What Is an IEO? Complete Guide to Initial Exchange Offerings

A strong and supportive community can greatly contribute to the success of your IEO. Focus on building a community of genuine supporters who are passionate about your project. Engage with them through social media, forums, and community events to foster loyalty and advocacy. Utilize various marketing channels, such as social media, press releases, and blogging, to create awareness and generate interest in your project. Next, the https://www.xcritical.com/ project must submit a white paper, which serves as an informative document detailing the technical aspects of the product, its architecture, and the problem it aims to solve. This was followed by similar restrictions enforced by India’s central bank, the Reserve Bank of India (RBI), in April 2018.

How do you participate in an IEO?

A look at the pros and cons of free, large-scale crypto distributions for both projects and consumers. Other popular IEO launchpads are Huobi Prime, OKEx Jumpstart, Probit Launchpad, Coinbene and more. Many investors tend to find IEO platforms more appealing because there’s a greater level what is an ieo of due diligence than what’s seen with an ICO. But, most of it has to do with different kinds of cryptocurrencies—because they’re not all made equal.

What Is an Initial Exchange Offering (IEO)? A Comprehensive Guide

The objective of ICOs and IEOs are essentially the same, which is to offer tokens to a large group of investors. An IEO is basically an ICO except that it is launched and managed by an existing exchange instead of the organization that created the token. IEOs are ostensibly agreements between project developers and exchanges for initial placement of the token on the exchange. Rather than the more surreptitious nature of ICO listing on exchanges and the questionable dynamic between projects, rankings sites, and exchanges; IEOs are supposed to be the more reliable token offering. Consider factors such as the platform’s reputation, user base, security measures, and listing requirements.

The ICO: An Evolution of Crowdfunding

• Hire community managers who understand the specific needs and preferences of different regions.
• The vast majority of value generated by ICOs has been built on the Ethereum network.
• We review the top IEO platforms including Binance, Huobi, OKEx and more, and show you how to get started.
• Ki Chong first discovered Bitcoin in 2013 and has been hooked on the decentralized dream ever since.
• As always, you should do your own research before deciding to purchase any tokens.

To showcase the due diligence and review process of the IEO system, Bittrex actively removed one of its IEO projects right before it was scheduled to take place. The RAID team had a major partnership that was canceled before the IEO event, so Bittrex decided to cancel the offering. Though IEOs are more restricted than ICOs, it does not mean that they are safe from regulators completely. If anything, they may be more vulnerable, but exchanges and projects have also learned their lessons.

How to Participate in an IEO: A Guide for Investors

That’s where a nascent crypto project sells coins for its new blockchain or tokens to run on another one like Ethereum or BNB Chain. Securities and Exchange Commission chased after issuers for securities violations. Lots of ICOs were scams, too, with developers abandoning their projects after raising funds, never to be seen again. Additionally, in most cases an organization looking to fundraise via an IEO has to offer financial compensation to the participating exchange.

Blockchain and Fundraising Before IEOs

The breakneck speed of investing where initial offerings are selling millions of dollars of tokens in minutes or even seconds is something we have seen before. The first Bittrex offering was with VeriBlock (VBK), and since Bittrex does not have its own native token, Bitcoin was the only accepted crypto asset in which you could buy VBK tokens. Another thing that makes this IEO unique is its settlement and vesting schedule, where 50% of VBK tokens are held in escrow by Bittrex for a certain time period.

Roles and Responsibilities of the Exchange and the Project Team

These mainstream crowdfunding platforms are also focused on supporting products, projects, and causes, but do not offer the ability to purchase a share of an organization or network. STOs involve the sale of security tokens, which are regulated financial securities. These tokens represent ownership in an underlying asset, such as shares in a company or real estate. STOs offer more regulatory compliance and investor protection compared to ICOs and IEOs.

For example, many investors that bought in the 2017 ICO hype were eventually burned by low-quality projects or assets that were deemed unlicensed securities. This challenging set of demands eventually gave rise to Initial Exchange Offerings (IEOs). Binance launchpad, and the newly introduced launchpool, are platforms in the Binance ecosystem that helps projects bring their tokens to launch. They provide full service advisory service, from pre-launch to to post listing and marketing support.

And the overall investment landscape is rapidly snowballing into a more mature ecosystem of traditional VCs, crypto VCs, hedge funds, asset managers, and more. However, investors are once again left with the short end of the stick as they face the most risk in the IEO scenario. For exchanges, the primary advantages are that they get a listing fee and can attract more users to their platform who want to participate in the IEO.

Essentially, both the exchange platform and the IEO project are promoting each other in a way that wouldn’t have happened during a normal ICO. Many of the top exchanges who are hosting IEOs have different requirements that involve holding or using their own platform tokens in order to participate in the IEO. By creating this condition, exchanges create demand for their internal tokens, which increases its value. Unfortunately, the ease and obscurity of raising funds amid the altcoin mania of late 2017 led to nearly 80 percent of ICOs being identified as scams in that same year. As a result, regulators took notice and, although they have been painfully slow in rolling out guidelines, finally unveiled some decisive outlines on tokens and their legal status. With proper planning, a solid project, and effective marketing, an IEO can be a valuable fundraising tool for blockchain projects.

Highlight the unique selling points of your project and keep the website updated with the latest developments. IEOs often implement Know Your Customer (KYC) and Anti-Money Laundering (AML) measures to protect investors and prevent fraud. Overall, IEOs aim to restore trust and credibility in the cryptocurrency fundraising landscape. Cryptopedia does not guarantee the reliability of the Site content and shall not be held liable for any errors, omissions, or inaccuracies.

These users may even become long-term users of the exchange, whether because they are impressed with the trading experience or are just there solely for the IEOs. Similar ICO sale parameters like fixed pricing, supply to be distributed, and hard/soft caps are also determined for the IEO. At its core, the IEO is basically an ICO but run through an exchange (or ‘launchpad’) as the intermediary conducting the sale.

The energy and speed in which new IEOs (IEO list here) are being launched and closed could signify that this is just an outlet for the demand that had been simmering beneath the surface this entire time. Less than a month later, Binance Launchpad concluded its sale of the Fetch.AI (FET) tokens. Participants were only able to use BNB tokens for the FET sale, which generated $6 million dollars for 69 million tokens within 22 seconds. In general, if you believe that an exchange is trustworthy, there is a reason to believe that it will select projects that have some degree of trustworthiness or credibility.

In some ways, the exchanges put their reputation on the line for every IEO they decide to offer. Peter has been covering the cryptocurrency and blockchain space since 2017, when he first discovered Bitcoin and Ethereum. Peter’s main crypto interests are censorship-resistance, privacy and zero-knowledge tech, although he covers a broad range of crypto-related topics. He is also interested in NFTs as a unique digital medium, especially in the context of generative art.

Although blockchain technology is relatively new, there are thousands of crypto startups and companies out there. Many of which are competing to acquire potential investors through ICO or IEO events. An IEO is often conducted when a new crypto project wants to launch its cryptocurrency or blockchain product but requires significant investment capital to do so. As always, you should do your own research before deciding to purchase any tokens.

The crypto market is generally optimistic about the future of IEOs, foreseeing continued growth and evolution. As global crypto adoption increases, IEOs could become more integrated with traditional financial systems, potentially leading to a more standardized approach across different regions and regulatory frameworks. This integration is seen as a step towards legitimizing IEOs as a mainstream investment option. Even as blockchain technology is rapidly developing in myriad fields, it has already radically transformed the way businesses and organizations can raise capital and fund projects.

A soft cap sets an initial goal to be reached but allows for more investments to trickle in afterward. We rarely run ads, but sometimes earn a small commission when you purchase a product or service via a link on our site. We were right to caution that it may just be another crypto fad without real substance as that is indeed how it has turned out. Will such a fad every come back again, i am sure it will as the crypto space has a short term memory when big money is to be made.