Content
In IDOs, projects list their tokens directly on a decentralized exchange. Binance launchpad, and the newly introduced launchpool, are platforms in the Binance ecosystem that helps projects bring their tokens to launch. They provide full service advisory service, from pre-launch to to post listing and marketing Blockchain support. They aim to allow project teams to focus on product development and building, while they provide the initial marketing exposure and user base.
Crypto Social Media Marketing: What to Know + Strategies
This makes it easier for both investors and startups to build a trust in the relationship, rather than pondering upon ways to be sure about the authenticity of each other. In the midst of this, if you are an Entrepreneur wondering how to launch an initial exchange offering (IEO) that brings higher revenue to your blockchain business, you are at the right place. Being a Blockchain app development agency that has been involved in the ideation, development, and launch process of both ICO and IEO, our loyalties are also https://www.xcritical.com/ now getting inclined towards IEO. For the benefits that the crowdfunding model is offering are genuinely incomparable that what has been seen in the industry before. The biggest problems with ICO is the fact that it is very difficult for investors to know who the organizers are behind the Blockchain project. Meaning, there are greater chances of them becoming a victim to hacks and scams.
What Is an IEO or IDO in Crypto?
With that said, IEOs can present favorable investment ieo exchange possibilities as well. Being able to buy upcoming tokens early while knowing that they are to be listed on markets with good liquidity can create some opportunities. Investors send money through exchange wallets, rather than sending it to the project directly. Dishonest projects or teams with little business sense will not be able to conduct a successful IEO either, due to the very strict requirements. For projects looking to raise money with the help of an exchange, an IEO is a reliable option.
What is an IEO (Initial Exchange Offering)?
Binance is the leading name in the crypto market by trading volume, user-friendly mechanism, etc. Its Initial exchange offering (IEO) platform, Binance Launchpad, is the most trusted exchange for your next crypto project. After launching and listing the token on the platform, a robust marketing campaign will guarantee the success of your project. Social media platforms, distributing press releases, guest posting, use of influencers, and so forth are a few steps to guarantee the success of your project. Binance Launchpad, OKEx Jumpstart, Bittrex, Huobi Prime, KuCoin Spotlight, etc., are some of the best exchange platforms to host your blockchain project.
Why blockchain projects do an IEO
- Though ICO set the ground for developing and funding crypto projects, it attracted scams and fraud to create a disturbing ecosystem.
- IEOs are similar to ICOs in that they are the first digital asset (tokens or coins) distributed to the general public to finance a new project.
- Yet even today legitimate blockchain infrastructure initiatives continue to launch periodic ICO rounds to expand capabilities for their live ecosystems.
- The major advantage of IDO over IEO is that there is no need to pay exchange fee, which is getting higher and higher, and it doesn’t require authorization from anyone.
- A maker fee applies when a user places orders that are not immediately filled, adding liquidity to a trading platform’s order book.
- Understanding what is initial exchange offering and how does IEO work compared to ICOs is crucial.
A hard cap ensures that no more than a certain amount of money can be invested. A soft cap sets an initial goal to be reached but allows for more investments to trickle in afterward. Because an IEO is facilitated by an exchange, the startups opting for this route have to be serious about their plan of action. In most cases, the IEO proposal is rigorously reviewed by the participating exchange. In some ways, the exchanges put their reputation on the line for every IEO they decide to offer.
The coins’ listings are done just a couple of days after the campaign ends. This shift marked a significant development in how crypto projects raised funds, offering a safer investment environment. An Initial Exchange Offering, or IEO, is a modern fundraising method where a cryptocurrency startup sells its tokens through a cryptocurrency exchange rather than directly to investors. This approach leverages the exchange’s platform to reach a wider audience and gain instant market credibility.
Investors must be a member of the listing exchange and meet requirements like owning a certain volume of the exchange’s own token. A project’s tokenomics should be covered in its whitepaper, but it’s worth discussing this aspect in more detail. 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. Legitimate projects fight back against this by doxxing their developers—that is, revealing their identities.
This was to investigate interest in the project and to assess potential risks and concerns before releasing a final version of the whitepaper. Initial Coin Offerings, or ICOs for short, used to be the industry standard for raising money. A startup company seeking investment needs merely to deliver a white paper outlining the planned system’s operation.
The time and probability, which in case of ICOs are fairly slim – at least in comparison to IEOs. Once you have both the above-mentioned points covered, the step of differentiation before launching the IEO will come – the part which distinguishes ICO from IEO blockchain. Next comes the development of your cryptocoin to set the base of the whole Offering part of Initial Exchange Offering. Let us find an answer to the prevalent question together, by comparing both models against each other and see if ICO investment model has been replaced. The term ICO did not exist back then, so it was simply called a crowdsale. An ether that can cost thousands of dollars today was only worth 31 cents during the crowdsale.
This innovation allowed them to perform their fundraising with no fear of the law or the authorities. Rollups-as-a-Service (RaaS) allows builders to build and launch their own rollups quickly. Usually, during the Private Sale, tokens with 50% or more discounts are bought. In Pre Sale, 30-50% discount tokens are bought and the Main Sale only 20-30% off is up for grabs. With that established, let us move on to the next part of our IEO vs ICO discussion.
The convenience of IEOs for consumers lies in the fact that they don’t need users to handle on-chain transactions using multiple wallets on blockchains. A user’s participation in the IEO through the online interface is limited only by the user’s ability to open an account on the exchange and maintain a positive balance in the account. After you’ve found your IEO of choice, you need to find which exchanges are hosting the crowd sale. Drafting a white paper is also one of the prominent stages of the IEO launch process. Another step to implement when it comes to how to launch an IEO model is to connect with the right exchange.
Additionally, an IEO has lower risks and more flexibility compared to ICOs. For investors, this makes it easier to exit their position, should they feel the need to do so. 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.
Presently, regulatory bodies such as the Securities and Exchange Commission (SEC) are analysing current legislation that is supposed to “protect” the average investor. The Howey Test is a methodology to determine whether a venture constitutes an investment contract. Digital currencies such as Bitcoin that are decentralised are difficult to categorise as securities according to the Howey Test, meaning vast implications for cryptocurrencies. Project owners can raise a lot of money for project development through these 3 types of capital calls.
