What is IEO and How Does It Work?
Blockchain-related topics are very hot these days and the IEO list is one of the newest and hottest ones to discuss. Initial Exchange Offers (IEO) is an initial investment fundraising event hosted by a cryptocurrency exchange. The IEO team does not launch or host a fundraising platform but undergoes financial and legal due diligence on an exchange. If the test is passed, the website launches a token sale and it goes to the IEO crypto list. This approach allows us to solve the main problem of ICO — a large number of scam projects.
What Is IEO?
What is IEO, you may ask? IEO (Initial Exchange Offerings) is a new way to attract investments for different companies. All the basic information about the token sale is agreed upon with the exchange and fixed in the contract. The agreement may also include a campaign fee, a percentage of sales, and advisory services.
IEO is much easier, more convenient, and more reliable than traditional ICOs. But the most important thing is that you can make very good and fast money due to IEO.
The Main Advantages of IEO over ICO
The investment method we are are talking about has many features, which are at the same time benefits:
Investors get a high protection level. The project passes a serious test for reliability and prospects.
The new token gets listed on the exchange much faster.
Fundraising speed. The initial distribution of tokens during ICO almost always takes several days. When starting an IEO, the set number of coins finds their owners in just a few minutes (or even seconds).
The investor almost at once starts to earn. This is something that no classic ICO and no cryptocurrency can give. If the project is successful, then this or that coin already has popularity. Thus, when a coin appears in the IEO crypto list, it is already worth more than when it was first offered.
Traders don't have to set up a wallet. Wallets are created automatically when a particular project is launched.
If the tokens added to the IEO token list perform well, the platforms will receive an influx of new users, and this will naturally lead to an increase in income. In general, everyone remains in the pluses: the organizers, the owners of exchanges, and investors.
Separately, it is worth highlighting one more difference between ICO and IEO. It concerns the time of issue of tokens. With ICO, tokens are usually issued after the end of funding. IEO projects immediately generate currency and send it to the IEO list of exchanges. This largely determines the efficiency of distribution and increased confidence in the startup.
Disadvantages of IEO
Despite the large list of advantages, projects from the IEO crypto list have some disadvantages:
IEOs are relatively rare. In the spring of 2019, the popularity of IEOs has grown significantly. Many large exchanges have created their own platforms for such token sales. But IEOs are still inferior in popularity. In the IEO crypto list, there are not so many high-quality projects.
Participation in IEO is becoming difficult. Many exchanges from the IEO crypto list have switched to a lottery model, where the advantage is given to those users who hold a larger number of native internal exchange tokens.
When checking the IEO list, you will see that IEOs are associated with legal uncertainty.
Participation in IEO does not remove all investment risks.
To participate in projects from the crypto IEO list, traders need to go through identity verification.
The procedure for conducting IEOs and the speed with which tokens are being sold have repeatedly raised the issue of the dishonesty of exchanges.