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Initial Exchange Offering (IEO)

Initial Exchange Offering (IEO)

An IEO is launched and managed by an existing exchange to offer tokens to investors.

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Contents

IEO has replaced ICO (Initial Coin Offering) as it allows solving the main problem - getting rid of fraudulent money-raising schemes. If in ICO each team, including fraudulent ones, can attract investors' funds only with the help of an advertising campaign, then in IEO it is required to pass verification from the centralized exchange (CEX), which comprehensively evaluates the project. This IEO is very similar to the listing process on a regular exchange.

However, IEOs are often criticized for the extremely biased attitude of crypto exchanges towards new projects. Often they put forward the requirement to trade only on their platform, to have a sufficiently large level of funding (even before the launch of the IEO), etc., which seriously limits many projects. Therefore, IEO has recently been replaced by Initial Dex Offering (IDO) is a new way to attract investors' money to crypto projects. The main difference from ICO is that the project is listed on a decentralized exchange (DEX).

Many of the top exchanges who are Launch Initial Exchange offering ( IEOs) have different requirements that involve holding or using their own platform tokens in order to participate in the IEO. By creating this condition, exchanges create demand for their internal tokens, which increases its value.

The exchanges benefit in that they receive new interest from those people who want to invest in the IEO, but were not already on their platform. Essentially, both the exchange platform and the IEO project are promoting each other in a way that wouldn't have happened during a normal ICO.

As the name suggests, Initial Exchange Offering is performed on the platform of a cryptocurrency exchange. In IEO, a crypto exchange functions as a counterparty and seeks to raise funds on behalf of companies. Developers mint the tokens for startups and send them to exchange where investors can buy tokens.

IEOs require users/contributors to purchase the tokens by creating an account on the Exchange platform. The project team needs to meet and comply with the exchange's platform requirements to initiate token sales. The token sale is performed on the exchange platform.

Who spend IEO?

Initial Exchange Offering spend only centralised exchanges like Binance, FTX, Coinbase, Kucoin, Bybit, Phemex etc. Every CEX has its own rules. Most of them don't allow conduct next investing rounds in other places.

Useful links:
  1. Coinspeaker created a list of all lauchpads with different types of initial offering (IEO, ICO, IDO).
  2. ICOmarks is a old site with comfortable filters.
  3. In CoinCodex information constatly updation in real time.

Timeline

May 13, 2019
Bittrex canceled IEO for RAID.

1.5 billion TOP tokens were sold in full, orders took one second on average to proceed, transactions took 7 seconds, 5 seconds and 7 seconds respectively in each round to complete, about 130 thousand people worldwide participated and 3764 people purchased.

April 23, 2019
Status ICO

Status raised almost $100 million with the ICO in a day. Participants were only able to use BNB tokens for the FET sale, which generated $6 million dollars for 69 million tokens within 22 seconds.

February 2019
Bittrex IEO

Bittrex announced its first IEO in February 2019.

December 14, 2017
Binance IEO

Binance announced its 1st IEO on their website: GIFTO.

Further Resources

Title
Author
Link
Type
Date

How To Launch Initial Exchange Offering (IEO)?

Akash Takyar

https://www.leewayhertz.com/ieo-initial-exchange-offering/

Web

May 14, 2019

What Is an Initial Exchange Offering (IEO) and How It Differs From ICO?

Nikola Baldikov

https://hackernoon.com/what-is-an-initial-exchange-offering-ieo-and-how-it-differs-from-ico-e20ac0e0b7c7

Web

April 30, 2019

References

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