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At the same time, ICOs made it clear that more reliable levels of quality assurance and second-market liquidity provisions were necessary in order to drive more sustainable methods of blockchain-based fundraising. To that end, Initial Exchange Offerings (IEOs) and Initial DEX Offerings (IDOs) were created to improve on past fundraising processes. Once these decisions are made, it is time to choose an exchange platform for the IEO. Binance Launchpad has helped dozens of projects reach their initial exchange offering investment capital needs. Some examples include BitTorrent (BTT), Band Protocol (BAND), Axie Infinity (AXS), Alpha Finance Lab (ALPHA), and WazirX (WRX).

What are the Benefits of an IEO?

It is common to trade assets on these platforms, but that typically only happens after the developers raised money to kickstart their projects. Binance launchpad, and the newly introduced launchpool, are platforms in the Binance ecosystem https://www.xcritical.com/ that helps projects bring their tokens to launch. They provide full service advisory service, from pre-launch to to post listing and marketing support.

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This integration is seen as a step towards legitimizing IEOs as a mainstream investment option. The lower frequency of IEOs has helped weed out some of the less savory projects in the cryptocurrency and blockchain space. However, no method is foolproof, but it appears that IEOs are at least on the right track.

The Rise of Initial Exchange Offerings

This evolution in user experience seems to be a natural maturation of the technology. As we shall see, exchanges have been closing token sales in minutes and sometimes in only a matter of seconds thanks to their streamlined and centralized systems. In a typical ICO that takes place on the Ethereum network, the developers create a smart contract and investors send crypto assets to the smart contract in exchange for a set number of tokens at a fixed price. In a typical IEO, developers send their tokens to the exchange, and the exchange sells them to its platform users at a fixed price. ICOs were able to raise unprecedented amounts of money at their peak, which eclipsed both traditional venture capital funding and incumbent platforms such as Kickstarter.

What Is an IEO? Complete Guide to Initial Exchange Offerings

Even many of the ICOs that legitimately tried to build real products were either not able to deliver or saw their asset prices plummet from their original ICO prices. In the summer of 2017, during the peak of the ICO craze, the amount of money raised by ICOs surpassed angel and seed VC funding for the first time. You could chalk it up to the hype around the projects, but the IEO likely plays the more influential role in supplementing such successful sales. The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other advice, and you should not treat any of the website’s content as such. Initial Exchange Offerings (IEOs) have emerged as a more secure and regulated alternative to Initial Coin Offerings (ICOs) in the cryptocurrency fundraising landscape.

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The RAID team had a major partnership that was canceled before the IEO event, so Bittrex decided to cancel the offering. OK, Jumpstart uses a subscription and allotment model that is determined before the actual sale that limits the number of sales that can be conducted. Participants are allowed to purchase more of the IEO’s tokens if they have more OKB tokens held in their accounts. 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. For example, Binance is based in Malta, where it has guarantees of protection and restricts users from certain countries such as the United States, Venezuela, and North Korea from participating.

What Is an IEO? Initial Exchange Offerings [2020 Guide]

Is this type of more restrained, orderly, curated, and serviced crowdfunding the next standard in the blockchain industry? Perhaps the idealism of the very early crypto adopters was too extreme, and the resistance to centralization is softening in order to accommodate more mainstream users, adopters, and builders. 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.

• Projects can raise funds with the help of the exchange’s customer base and launch trading for their token shortly after.
• Focus on building a community of genuine supporters who are passionate about your project.
• This comprehensive guide will walk you through everything you need to know about IEOs, including their definition, how they work, their advantages and disadvantages, and tips for a successful IEO fundraising event.
• Your project’s website is important for providing information to potential investors.
• Exchanges will commonly have a well-organized legal structure that protects them from regulatory consequences.

Lessons Learned from Unsuccessful IEOs

The IEO is an attempt to revive the success of the highly effective funding mechanism of ICO’s but with more constraint and higher standards. A digital currency that is secured by cryptography to work as a medium of exchange within a peer-to-peer (P… Opting for an IEO often can be an interesting option, assuming the developer has a plan of action and is dedicated to seeing the project’s vision delivered.

The risks and opportunities of an IEO

Similar to any other industry, there is a lot of competition trying to attract investors. Not everyone can successfully attract investment capital through traditional means. Binance Launchpad is essentially a streamlined platform and process for new projects to launch their initial token offerings and then get subsequently listed on the Binance exchange.

However, it could also be taken that this is the ecosystem maturing and offering much-needed improvements in standards and user experience. It could also be argued that the regulators and extreme market conditions had stopped the initial ICO craze too early when in reality there was still underlying demand that was simply being suppressed. The IEO projects themselves have also learned not to have such extreme or uncapped funding rounds.

For example, Binance Launchpad is one of the trading platforms that aims to deliver innovation and bring IEOs to the crypto market. The platform has helped more than a dozen blockchain projects raise capital since launch. Any blockchain project team that wants to raise funding in exchange for tokens can apply to an exchange that has an IEO platform. An IDO is a fundraising method in which a coin or token is issued via decentralized exchange (DEX). A core difference between IEOs and IDOs is that an exchange’s permission is not required to conduct an IDO.

When this article was written in 2019 we were witnessing the height of the IEO boom. But it was just another bubble and many people lost a lot of money while very few profited immensely. Although as with ICOs they are still happening, they are no longer the main focus of the crypto world. 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.

IEOs play a crucial role in the crypto ecosystem by providing investors with a more secure and regulated environment. Unlike traditional Initial Coin Offerings (ICOs), IEOs involve a cryptocurrency exchange as an intermediary, which helps to vet the projects and reduce the risk of scams. This added layer of security attracts more investors, boosting the liquidity and visibility of new crypto projects.

An IEO is different from an Initial Coin Offering (ICO) in that it’s made possible with the help of a cryptocurrency exchange like Binance. Projects can raise funds with the help of the exchange’s customer base and launch trading for their token shortly after. Considering that most ICOs failed after launch or saw their tokens drop significantly in value, this is not an overly pessimistic outlook.

The ICO format is completely permission-less for absolutely anyone to launch and participate in. This reintroduction of centralization can be seen as counter to the basic ideology that created Bitcoin and open blockchains in the first place, which was to be a completely peer-to-peer network. As a corollary, more discerning investment decisions seems to have coincided with the increasing traditional investment format into digital assets. Projects like Coda Protocol, who received seed investment, are receiving additional rounds of investment by VC firms. And the overall investment landscape is rapidly snowballing into a more mature ecosystem of traditional VCs, crypto VCs, hedge funds, asset managers, and more. Despite the emergent success of Binance’s Launchpad and the planned IEOs on exchanges such as Bittrex gathering more attention to the new token sale format, they appear eerily similar to ICOs.