Top 5 things you should know about the Initial Exchange Offering (IEO)
IEO is an acronym for initial exchange offering, when people started losing faith in the ICO (Initial Coin Offering) IEO became their hope. It is the new form of fundraising, providing a new way for blockchain startups to raise initial funds.
IEOs are different from ICOs as it involves exchanges directly rather than inadvertent methods such as token airdrops for distributing tokens. In this model, Startups do not sell tokens directly, they collaborate with cryptocurrency exchanges that organize and execute token sales. These Exchanges are established companies and have better trust and reach.
Additionally, they can handle the promotion of sales more effectively and also secure customer accounts in a better way. IEO is gaining popularity and helping blockchain startups to raise funds but do you want to know more about IEO? If Yes, then here we are with some important information about IEO.
As ICO has lost people’s trust, IEO is currently the most efficient way to raise money, compared to ICO and STO. The IEO has many success stories about it and has been proving its credibility.
A few names on such list are BitTorrent, Celer Network, and Matic Network, and these projects have achieved success on Binance via an IEO. However, IEO also needs the support of a good presentation, robust business model, cryptocurrency, and publication. Binance provides all for IEOs.
IEOs is a safe method of exchange and many experts recommended it for bitcoin startups. However, all the benefits come at a cost, and the fees charged by exchange companies can range from $ 250,000 to $ 400,000 USD.
The difference between IEO, ICO, and STOs from an investor and fundraising point is purely about the token seller. In the case of IEO, it runs directly on the exchange and nothing else. And as we stated above exchanges run due diligence before accepting and enlisting the IEO for particular projects.
IEOs give everyone an opportunity to raise funds for their unique projects, but it is still not 100% secure, because It offers immediate utility, not future utility.
If you aim to raise funds for an existing blockchain project and have immediate utility in issuing tokens, then IEO is an option to consider for your business.
Laws and questions of jurisdiction on Cryptocurrency and blockchain are complex or unclear. The IEO’s reputation and regulation will have many consequences on performance. From an IEO perspective, any legal entity based in Switzerland or abroad can operate an IEO with a crypto exchange located in the same or any other jurisdiction.
Before Investing in any IEO, must check track record, reviews, reputation, popularity, listed currencies, Listed IEO’s condition, etc.
IEOs work great for comparatively mature blockchain-based ventures that have built a vibrant community, a definite presence on social media and PR, a team that features all the necessary skills, experience, and a higher standard of reputation.
It makes sense for products based on the strong utility of IEO tokens, especially if the company wants to develop a healthy ecosystem after listing. However many experts also believe that when governments will impose guidelines on it the STO’s significance will increase.
In the case of an ideal IEO project, everyone benefits from the project and arrangement including the project team, marketing team, investors, and also exchange companies.
Exchange companies have too much power, they can select and reject any project whether they are unique or something similar to the already listed ones.
Exchange companies mainly focus on profits. Scams can come with an IEO from two fronts: the project itself, or the hosting exchange. It should be researched what kind of insurance the exchanges have for their funds.
Additionally, Exchanges also offer some extra security features thus looking at all of them is compulsory if you are looking to invest in an IEO Coin Sale.
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