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Blockchain related topics are very hot these days and IEO is one of the newest and hottest topics for discussion. The problem is that not everyone fully understands what an Initial Exchange Offer or IEO is. And in this article, we are going to tell you in a simple way what IEO is . It is very important to have a good understanding of what can completely change someone's life over the next few years: to make it easier, more meaningful, and more successful.

What is IEO and how does it work?

In order to understand what is an IEO, it is necessary to understand what is an ICO

ICO is an acronym for Initial Coin Offering . It is an alternative fundraising mechanism where blockchain startups issue their own crypto tokens and sell them for BTC and ETH . Users, in turn, can either spend digital tokens on the platform, or later sell them on exchanges at a price of X3-X100. Tokens are basically like coupons that you can exchange for goods or services on a particular platform. And in 2017 and 2018, ICOs brought huge benefits to the world of the crypto industry. But the truth today is that people are starting to move towards a new strategy called Initial Exchange Offering, or IEO.

An IEO is an ICO that goes through an exchange that is a broker that sells tokens . These exchanges gained notoriety in the media after their first few sales, most notably IEO selling BitTorrent tokens on Binance Launchpad . Unlike Initial Coin Offerings (ICOs), IEOs are run by an exchange on behalf of a startup trying to raise funds with their tokens.

The main advantages of IEO compared to ICO

As interest in ICOs fades, and the number of private placements (i.e. initial investments) has increased, exchanges are making efforts to create launch pads to deliver project tokens directly to their client bases in a more standardized format. An ICO is a lesser known crowdfunding strategy for ICOs. With an ICO, everything depends on the developer, who must ensure that everything goes according to plan. With an IEO, these obligations are borne by the exchange or exchange platform.

Thus, in order for investors to participate in the IEO, they need to create an account on the exchange. Instead of depositing bitcoin, ether, or other cryptocurrencies into a seed currency that offers a smart contract, investors must send the coins to their coin account. The moment the IEO starts, the investors will buy tokens from the exchange platform.

These IEO tokens are generated or "minted" by the developers before the initial exchange offering and sent to the exchange. Each project organizes different conditions and arrangements. The agreements and terms are price per transaction, service fee, cost offer, and various other terms. Be that as it may, investing in a project can reduce some of its marketing, organizational or security costs and ultimately prove beneficial to the investor.

Most of the "rules" of ICOs are applicable to IEOs, but also terms and deals between projects are often different from each other. Projects may require tokens to be sold at a fixed price throughout the IEO process, and may require a cap of tokens per investor to prevent price gouging. Exchanges require developers to limit their projects to get the best result of the initial exchange offer. And if too many coins are sold, the token economy is doomed from the start.

Platforms and exchanges that conduct new IEOs

IEO exchanges benefit greatly from the initial exchange offering. And although exchanges rarely venture into launching IEO projects, they mostly benefit from crowdfunding method. The exchanges listed below are benefiting greatly from increased volume through trading fees on upcoming IEOs. The newly listed token brings more volume and users to the exchange, which they benefit from. The exchange receives new deposits from investors, which is a new influx of users.

• Binance

Binance is a global cryptocurrency exchange that allows you to trade more than 100 cryptocurrencies. Since the beginning of 2018, the Binance IEO has been ranked as the largest cryptocurrency trading platform in the world by volume.

• EXMO IEO

EXMO IEO is a cryptocurrency exchange based in the United Kingdom. It charges a 0.2% fee on all trades and allows customers to buy and sell Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and a host of other popular cryptocurrencies.

• BitForex

BitForex is a digital asset exchange that was launched in June 2018. A review of the BitForex IEO shows that it is a company registered in Seychelles and headquartered in Singapore, a popular destination for blockchain projects.

• Yobit

Yobit is a cryptocurrency exchange platform that brings together the major players in the market. Yobit.net always supports cooperation with the most popular cryptocurrencies in the world, and provides an opportunity to make a profit when exchanging electronic money.

How to participate in IEO

Participating in an IEO is much easier than participating in an ICO. Here's what you should do:

1. Check if an IEO will be issued: Most cryptocurrencies opt for crowdfunding with an ICO, so the first step is to check if the project actually meets the initial exchange offer.
2. Find Exchanges That Will Participate: Sometimes only one exchange participates in an IEO. Registration may take some time, so this is the main drawback of initial exchange offers.
3. Registration in the stock exchange: This is the next step. As we said above, the registration procedure is not convenient for investors as it takes time. If you did not have an account on the exchange the day before, the chances of checking you the next day are not great.
4. Which Cryptocurrency Will Be Accepted: Initial exchange offerings require Ether as there are a large number of projects running on the Ethereum network. But this is not always the case, so you need to know the cryptocurrency in question before proceeding.
5. Initial IEO: Wait for the crowdfunding event to start, then proceed with purchasing the required token.

IEOs List 2020

Below we will publish a list of upcoming IEOs. If you need more information about recent IEOs, you can view an updated table with all upcoming exchange offerings.

Advantages and disadvantages of IEO

Knowing that most projects choose ICOs for their distinct economy, what benefits do projects get when choosing IEOs? Let's focus on the pros and cons.

IEO . Advantages

1. Exchange List: Listing your project on an exchange is one of the hardest steps to building a healthy token economy. But if the venture can negotiate the right deal, listing on this stock exchange should be easy. Some exchanges have very strict listing procedures that can take months. Others require large fees for Bitcoin or Ethereum in addition to strict listing procedures. Therefore, if an exchange participates in the IEO of the project, it will help with the listing, given that the project has already passed the requirements.
2. Exchange user base. Choosing an exchange for an IEO means that the project will use the exchange's users for its clients. This reduces marketing costs, which are the highest costs. This can turn out to be a great long-term investment and a great return on investment. Major exchanges have a much larger user base than most cryptocurrency marketers.
3. Credibility: Projects issuing IEOs have increased their credibility due to the exchange. With initial exchange offerings, exchanges help developers make sure that everything goes well. This way you can be sure that the exchange will not allow fraudulent activities, low security or phishing attempts.
4. Less fraud: Fraud cannot be completely prevented, but with IEO, you can be sure that the exchange will be able to provide secure transactions.
5. Price manipulation. The initial exchange offer can, to some extent, prevent price gouging.

IEO . defects

For example, buyers must bear the costs associated with the exchange, i.e. exchange fees and other related fees. In addition, the IEO must pay the exact amount of the listing fee in order to bear all costs incurred by the exchange.

Another disadvantage is that the marketing costs have to be borne by token issuers, which greatly increases the overall costs. The estimated figure indicates that the fee for listing the token should be at least 20 BTC, while the marketing cost can range from 80 thousand to 150 thousand US dollars, regardless of the popularity or quality of the exchange.

conclusion

The world of cryptocurrency is constantly changing, and new opportunities appear regularly. IEO is by far one of the most attractive options, despite some drawbacks. In any case, there are always things to look for in an IEO, whether you are looking for an investor or a developer.