ICOs have revolutionized how entrepreneurs and businessmen viewed crowdfunding and generating capital for their projects and businesses. The growing number of ICOs denote the evolution of crowdfunding across the globe. But ICOs have created a bad reputation owing to scammers and fraudsters. Thus IEOs were introduced. In this article, we have put together a beginner’s guide to Initial Exchange Offerings and why one should approach an IEO Development Company for their crypto crowdfunding.
What is an IEO?
An Initial Exchange Offering is similar to that of an Initial Coin Offering, with a slight variation. An IEO is a crowdfunding initiative hosted by an exchange platform, that allows investors to purchase the new cryptocurrency launched by an organization to fund their project. The sale of the cryptocurrency is exclusive to the exchange and its registered members.
In simple terms, ICOs are open for public investments, while IEOs are exclusive to the exchange that hosts them.
Primary reasons why an IEO is better than an ICO
ICOs are deemed risky and unreliable owing to the lack of regulation and governance over them. ICO investors are prone to the risk of owners participating in malicious activities or leaving investors exposed to other risks post-investment.
IEOs are often regulated and are authentic in their operations. As IEOs are identifiable and offer guarantees, they offer reliability and trust to the investors. Unlike ICOs, IEOs offer investors the ability to acquire other crypto assets on their platforms apart from the new cryptocurrency that is launched.
Guaranteed Token Sale:
ICOs often fail as they don’t achieve the required soft/hard cap. Such a failure is primarily due to the lack of token sales. Although other factors such as lack of exposure, poor marketing, and utility exist, they ultimately contribute to lesser sales than expected.
Exchanges ensure that the established soft cap or hard cap is achieved when an IEO is launched. IEOs are more likely to succeed as they are hosted in a platform that promotes coin/token sales. Investors anticipate and estimate the future value of the coin/token and purchase them immediately. IEOs gain massive exposure to crypto traders, who engage in coin purchases every day.
IEOs are basically ICOs with added layers of protection and a guaranteed metric for the token sale. These translate to the success of crowdfunding to begin the development of the project. IEOs are considered effective as they are hosted by exchange platforms that support the trade of cryptocurrencies directly. Approach the best IEO development company to kick start your blockchain venture.