Editorial Team
Initial Exchange Offerings (IEOs) have drastically reduced the risks for investors while giving them the opportunity to support new projects
Initial Exchange Offerings Explained
IEOs are similar to ICOs. They are essentially crowdfunding campaigns where contributors offer funds in exchange for coins/tokens. The main difference is that the whole procedure is performed through a cryptocurrency Exchange’s token sale platform often called a Launchpad where the exchange acts as the intermediary with the agreement that the token will be listed on the exchange’s trading platform after the end of the IEO, thus making the whole procedure more reliable.
Benefits of IEOs
Potential IEO projects go through extensive scrutiny by the exchange before they are approved to be featured in their Launchpad. No exchange would risk exposing their users and subsequently damage its reputation by supporting a questionable team.
The possibilities for an IEO to be successful are higher because the token is introduced to an existing pool of potential investors who already use the exchange’s services. The exchange itself will also benefit from the listing fees so it offers extra marketing with minimal cost.
IEO Investors also have the advantage of having the token listed in exchange right after the completion of the IEO which ensures available liquidity straight away.
IEOs have demonstrated impressive ROI
IEOs have managed to reignite the interest of investors towards small start-ups in the crypto industry and even stole the spotlight from, what was thought to be up and rising, STOs.
With one of the biggest cryptocurrency exchanges, Binance, leading the way, IEOs have produced large returns. The reputability of certain exchanges creates anticipation towards their upcoming IEOs which attracts news investors and eventually drives the price up.
These investors end up buying more tokens expecting the price to rise even higher which leads to even more organic interest driven by FOMO. Once more the price rises and that’s how we get returns such as the ones we have seen recently on coins like BitTorrent, Celer and Matic.
