Initial Exchange Offerings (IEOs)represents the next generation of ICOs and their more advanced development phase.
2017 and 2018 were years of the highest ICO peak followed by a gradual decline. The need for new marketing models and alternatives started to reveal itself in 2018 already.
Consider 2019 the post-ICO phase. ICOs have proven to be high-risk activities for many, so they had to go. Crypto exchanges came up with a viable alternative to ICOs – the Initial Exchange Offerings (IEOs).
IEOs are a form of initial token offerings. They are quite similar to ICOs, but they take place primarily on crypto exchanges. In other words, the crypto exchange serves as an issuer platform and the main venue for the token offering.
The reason why crypto-exchanges attract so many people is the variety of coins, payment methods and user protection. Almost any reputable crypto exchange has an AML/KYC procedure both for individual customers and for companies that it partners with.
To list a token on an exchange, a company has to comply with the legal requirements both in the country where it’s registered and in the country from which the exchange operates. In most cases, some sort of due diligence or legal opinion has to be provided. That’s another security layer that will ensure your participation in the IEO from unwanted surprises. Crypto-scams simply can’t make it to major exchanges.
ICO Vs. IEO Comparison
Without ICO, there would be no IEO. The ICO is a hybrid that evolved from Initial Public Offerings (IPOs) blended with crowdfunding and fundraising.
The preparation steps for ICO and IEO are very similar. The core difference is that with an IEO, you get access to the exchange’s user base and distribution channels. The token sale, distribution and some of the accompanying promotions take place on the exchange itself. By listing on one of the major crypto exchanges, you will significantly expand your audience reach.
Who Needs An IEO?
Many prospective projects operating both in and outside the crypto industry missed the ICO hype or weren’t ready to embrace innovative technologies like blockchain and tokenization. IEOs are their second chance to step into the crypto-sphere and raise funds. It’s also a prime opportunity to embrace a new curve of development if a company operates in the crypto-sphere already.
From an investor’s or a trader’s side you have more possibilities to make profits on exchanges through IEOs. You’ll have way more investment and trading options to consider.
How To Start And Where To Launch?
Navigating the exchange landscape is difficult and time-consuming. With most exchanges, it is not easy to get listed for an IEO. Because of the significant interest, their potential slots are often filled well in advance. It is often easier to work with a service provider who specializes in crypto marketing, as these companies have partnerships with exchanges already. We at CryptoCoin.News offer this service – get in touch if you are interested.
IEOs represent a more mature model compared to ICOs. To launch an IEO, your token has to be a utility token in the majority of cases, and often you will need a legal opinion backing this up. There are only a handful of exchanges accepting security tokens at this point.
Pros of IEOs
Despite being a recent invention, IEOs have significant advantages over ICOs and
other types of token offerings:
● Safety: crypto exchanges serve as a safety net. They pay particular attention to the protection of customer’s funds by setting compliance procedures.
● Quality: a careful selection of the listed projects creates a high level of competition
between those who want to launch an IEO. That also sets higher performance and
quality standards for others.
● Transparency: by now, the industry is much more regulated than it was 3 years ago, and
that brings more transparency.
● Convenience: exchange users can invest directly from their accounts’ on the exchange.
That spares them a lot of time and effort retrieving their funds from elsewhere and
setting up smart contracts manually.
● Equality: many IEOs are setting a moderate investment cap to allow more people to take
advantage of the offering avoiding the dissemination of the crypto-whales.
What You Need To Succeed
Same as it worked with ICOs, you will need to put sufficient energy and budget into building a community of supporters through marketing. Nurturing your community is the first and foremost.
Like with ICOs, you will need a whitepaper, credible team and showcase the most value-charged and unique traits of your company that are likely to hook investors.
Major crypto news media can be of great assistance in spreading the word about your
campaign. Your community needs to hear from you as often as possible, so plan for regular announcements, publications, interviews and press releases.
Why Do IEOs Matter?