What Is an Initial Exchange Offering IEO?

However, because crypto projects are more discoverable and are more likely to be successful on an exchange, a project might not have its own ICO and instead wait to “go public” on an exchange. The trend towards broader investment by traditional firms seems https://www.xcritical.com/ poised to accelerate as 2019 continues. As for IEOs, they present more flexible buy-in options for investors (i.e., with fiat and altcoins) and better/assured initial liquidity, but still, come with similar risks as ICOs.

Create Your Free Token Metrics Account

The first thing investors need to do is to create what does ieo mean in crypto an account with the exchange that will list the token they want to invest in. Since it can be hard to predict which exchange each token will list with, it can be a good idea for investors to have accounts at multiple crypto exchanges. Of course, monitoring social media requires that investors already have a shortlist of crypto projects they’re watching. Investors can build that shortlist using ICOBench, then follow up on social media. On top of that, centralized exchanges don’t require investors to have their own self-hosted crypto wallet.

What Is an Initial Exchange Offering (IEO)? A Comprehensive Guide

Some traders do consider IEOs less risky than ICOs, particularly when they’re held on leading exchanges. This is because IEO projects are put through a rigorous vetting process before they’re accepted by exchanges. It’s not uncommon for hyped cryptocurrencies to see big price increases very quickly after listing on an exchange. This means that unless you buy the coin quickly upon listing, you could end up paying a higher price than you would’ve previously.

Lessons Learned from Unsuccessful IEOs

With Cryptomus it’s all possible — sign up and manage your cryptocurrency funds with our handy tools. There are still other ways for cryptocurrencies to get into people’s hands. But, most of it has to do with different kinds of cryptocurrencies—because they’re not all made equal. After an ICO, anyone can buy crypto in support of a project directly from the organization hosting the project. Now that we have learned “What is IEO in cryptocurrency?”, let’s find out how to participate in Initial Exchange Offerings. Next, the project must submit a white paper, which serves as an informative document detailing the technical aspects of the product, its architecture, and the problem it aims to solve.

Why Investing in an ICO Can Be Better Than an IEO

Most crypto exchanges will require new investors to go through the KYC process. This includes uploading a copy of the investor’s ID, taking a photo with their webcam, and verifying their phone number and email address. First, our calendar tool shows all upcoming coin listings including ICOs and IEOs. Investors can find projects on the horizon with Tier 1 and other highly trusted exchanges. While IEOs have some benefits, many crypto projects choose to make their tokens available to investors through an ICO instead. ICOs have several important advantages over IEOs that make them the distribution mechanism of choice for new cryptos.

• Of the highest funded crowdfunding projects in history, ICOs dominate; occupying 17 of the top 20 positions including the three highest-funded projects.
• Tokenomics will determine how many tokens are available during an IEO, whether a cryptocurrency is inflationary or deflationary, and whether there will be liquidity for trading a token after its launch.
• These mechanisms are similar to an ICO – token sales of new crypto projects.
• They require a thorough verification process and the submission of a white paper to ensure the legitimacy and viability of the project.
• When an IEO starts, people can buy the new coins directly from the exchange’s platform.
• While IEOs have some benefits, many crypto projects choose to make their tokens available to investors through an ICO instead.

What Is an IEO or IDO in Crypto?

Once the sale is over, you can freely trade your newly acquired tokens on the same exchange. Investors had to send bitcoin or ether to a smart contract or a website and hope they would receive tokens. Anyone with some basic smart contract knowledge and web development skills could put together a shiny website with a promising-looking roadmap and start raising money. It was a far cry from ideal and carried tremendous risk for anyone investing in ICOs. An IEO can be useful because it caters to existing cryptocurrency holders. Given how the participating exchange helps lend some credibility to the project raising funds, there is some degree of trust.

What is the difference between an ICO and IEO?

Additionally, IEO helps projects cut down their marketing cost since trading platforms already have a loyal customer base. Once the IEO begins, investors can purchase the project’s tokens directly from their exchange wallets. The exchange platform facilitates the token sale and ensures transparency by providing updates on the project’s progress to investors.

Crypto Launches Explained: ICO vs. IDO vs. IEO

A crypto whitepaper will also typically cover the project’s development roadmap. This includes details about when the IEO will be held, whether there will be additional token releases, and when new features will be released to the community. Project roadmaps may be optimistic in their timing, but they should still be realistic about how long things will take. While exchanges perform some due diligence on IEOs, there’s no guarantee that they filter out all scammy projects. There’s also no guarantee that a token will rise in value just because it held an IEO on a major exchange.

1. A Step-By-Step Guide to Participate in IEOs

That means that IEOs are only open to individuals who reside in countries where the exchange operates and that investors must pass a Know Your Customer (KYC) check. In this guide, we’ll explain everything crypto investors need to know about IEOs, including how to find top IEOs as well as how to invest in them. Unlike its predecessors, the IEO introduces a new paradigm, blending the excitement of crypto investments with enhanced security and credibility. Altcoin Sherpa also says he’s not currently accumulating FET, the native token of the Artificial Superintelligence Alliance, an artificial intelligence (AI)-focused project.

With proper due diligence and a cautious approach, participating in IEOs can be a worthwhile venture for those looking to diversify their investment portfolios in the crypto space. A recent example of a successful IEO was Sui (SUI) via KuCoin Spotlight in April-May 2023. A much-anticipated project, its IEO garnered significant interest within the crypto community, with participation from nearly 250,000 users on the KuCoin Spotlight token sale platform. Matic Network, a blockchain-powered scaling solution that helps blockchains grow bigger, got $5 million in April 2019 by selling their tokens in an IEO on Binance in a short span of time.

The vetting process varies from one IEO provider to another, so investors still need to do their own research. But the approval process for an IEO can help weed out scams, rug pulls, and poorly developed projects that might not be suitable for public investors. During an IEO, researchers at a centralized exchange talk with the project team, scrutinize the project’s tokenomics, and come to a decision about whether to list the token. One of the most important differences between IEOs and ICOs for new crypto projects is the cost of each type of public sale. In addition, most IEO providers require investors to complete KYC requirements in order to join.

The vast majority of value generated by ICOs has been built on the Ethereum network. 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. This was followed by similar restrictions enforced by India’s central bank, the Reserve Bank of India (RBI), in April 2018. Bolivia’s Financial System Supervision Authority (ASFI) issued a resolution in July 2018 that prohibited the use of cryptocurrencies, including ICOs, in the country.

In the US, it’s important to note that the SEC considers IEOs to be securities offerings. Altcoin Sherpa also notes that he accumulated IO, the native token of the decentralized computing network IO.NET, at $1.76. The trader shares a chart suggesting that IO has flipped a former resistance level into support.

For projects looking to raise money with the help of an exchange, an IEO is a reliable option. Most Initial Exchange Offerings sell out very quickly, depending on the project’s vision and use cases. The project token will also be listed on the exchange after the sale ends. Although blockchain technology is relatively new, there are thousands of crypto startups and companies out there. Many of which are competing to acquire potential investors through ICO or IEO events.

For example, Binance requires users to use the Binance coin (BNB) and Huobi requires users to use Huobi Token (HT) in order to purchase tokens during an IEO. Even though every IEO is vetted by the participating exchange, no investment is without risk. It is possible that the project raising funds will not be able to realize its vision. This can and often will impact the token price, regardless of its value during the IEO.

IEOs are either another hot crypto fad or a sign that the ecosystem is maturing. Let’s hope that it’s the latter, and the industry is developing desperately needed improvements in standards and user experience that will bring on a new wave of investor and consumer interest. A look at the pros and cons of free, large-scale crypto distributions for both projects and consumers. Initial Exchange Offerings and Initial DEX Offerings are blockchain-enabled fundraising models with unique improvements as compared to ICOs and IPOs. Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. The main difference between IEOs and IDOs lies in the listing approval process.

Audits are a small but very important step that projects can take to show they’re serious about investor safety. Top IEO projects make their audit results publicly available for prospective investors to review. Another important difference is that IDOs are open to anyone, much like ICOs.

It’s a bit different because you can also bet on their prices without really owning them. It’s a place where cool projects start their journey, and people join the fun. When projects want to work with crypto exchanges, there are a few important things they should think about. This partnership helps the project sell special tokens to interested people. Primarily, people who like the project can easily get the token, and the project gets more attention because the exchange has a loyal support base.

An IEO (Initial Exchange Offering) is an investment method with many significant advantages for investors, developers and crypto exchanges. Unlike ICOs, which a holding company organizes on its own platform, IEOs are conducted by exchange platforms on behalf of the project raising funds. This shift from ICOs to IEOs has occurred due to the loss of trust and confidence in ICOs caused by numerous cases of fraud and scams. All exchanges that are offering IEOs require you to register or create an account on their platform. Exchanges also will require users to complete Know-Your-Customer (KYC) account verification before participating in an IEO. Finally, many exchanges require you to use their own native tokens in order to participate.