Our Global Presence :

Initial Exchange Offering (IEO) 101: Everything You Need About Launching IEO

by

Daljit Singh

linkedin profile

20 MIN TO READ

March 20, 2024

Initial Exchange Offering (IEO) 101: Everything You Need About Launching IEO

by

Daljit Singh

linkedin profile

20 MIN TO READ

March 20, 2024

Table of Contents

The traditional financial market has dramatically changed with the rise of blockchain-based digital assets. Cryptocurrency, non-fungible tokens, metaverse, and other blockchain applications resulted in a varied business operation, disrupting the existing financial system. It calls for multiple investors and financial needs to explore new ways of making fortunes. 

Since cryptocurrency is decentralized, anyone with adequate technical knowledge and skills can mine their digital currency, leading to the launch of various crypto tokens. Initial coin offering (ICO) is the leading method of launching a crypto token but comes with risks. Therefore, an initial exchange offering (IEO) is the best alternative to successfully launch a digital asset into the market with minimal risk and high returns. 

Since IEO happens on credible and established crypto exchanges, it cuts off the trust issues arising from ICOs. The IEO process is a time-consuming yet effective method to step into the crypto universe with your developed tokens via crypto exchanges, such as Binance, KuCoin, OKEx IEO, and so forth. Notably, IEO is the product of the best blockchain development companies, resulting in the progress and advancement of the virtual financial landscape. 

What Is an Initial Exchange Offering (IEO)?

Initial exchange offering

Picture a mechanism investors use to raise funds and investments for a novel crypto project. You can either gather money to fund the project on your own or rely on trustworthy blockchain platforms with an established community of investors and crypto enthusiasts. A fundraising campaign for your blockchain project from an independent investor is known as an initial coin offering. 

On the other hand, an initial exchange offering (IEO) raises funds via a crypto exchange to initiate a crypto token or digital asset in the market. The key difference between the two fundraising methods is the host. However, each method comes with distinguished advantages and drawbacks. 

In July 2013, the first-ever crypto token sale or initial coin offering (ICO) took place. This sale paved the way for investors to bring their idea of digital assets into their lives. Since the lack of an intermediary resulted in various problems for investors and crypto enthusiasts, ICO exposed investors to issues. Consequently, IEO comes to the rescue, streamlining the crowdfunding process for blockchain projects. 

  • Working on Initial Exchange Offering (IEO)

Before discussing the working scheme of initial exchange offering (IEO), understanding a blockchain-based exchange is necessary. Crypto exchanges are platforms for crypto developers and miners to launch their crypto tokens for investors and traders. They are based on blockchain technology, allowing users to enjoy every related perk. 

For instance, a crypto exchange works on smart contracts. This means that an automated set of instructions regulates the crypto processes and activities without relying on a human for management. On one hand, it eases the management of digital assets without any central authority intervening in the process. At the same time, smart contracts in the blockchain ensure security and transparency, preventing malicious actors from messing up with the blocks of stored data. 

An IEO is a step-wise method, starting from leverage on a crypto exchange. A digital asset miner provides the exchange with the project and agrees on the token listing. It initiates the token sale, and the verification of the investor paves the way for token allocation. Project development leads to community engagement and regulatory compliance, offering the developed token for trade and sales to crypto buyers. 

Initial Exchange Offering (IEO) Vs. Initial Coin Offering (ICO)

Initial exchange offering vs initial coin offering

Developers can develop two types of tokens: utility tokens that users can exchange for products or services on different platforms and tradeable tokens that they can sell on crypto exchanges. Due to multiple factors, IEO crypto is more credible and reliable than initial coin offerings. 

Though ICO set the ground for developing and funding crypto projects, it attracted scams and fraud to create a disturbing ecosystem. Statista says crypto fraud has cost over 20 billion USD in about five years. ICOs, exit fraud, and security scams have traumatized the financial market, preventing investors from funding such blockchain projects. 

Contrarily, an initial exchange offering (IEO) promises secure and matchless fundraising campaigns that eliminate the risk of losing investors’ money via exit scams. As a credible exchange, it functions as a key partner in the well-regulated fundraising of IEO. For example, Binance’s launchpad is the IEO platform that helps blockchain developers launch their crypto tokens. 

Perks of Initial Exchange Offering (IEO)

perks of Initial offering exchange

IEO ensures multiple benefits to individuals and organizations looking to enhance their financial gains. With trust and integrity, an initial exchange offering (IEO) is the best way to raise funds for your crypto projects. 

1. Higher Credibility

The due diligence of crypto exchanges for the fundraising of the blockchain projects reflects trust and authenticity. Investors can rely on the security guidelines of the selected exchange. Let’s consider an explanation to understand how IEO is more trustworthy than ICO. 

Since ICO is the fundraising from an individual investor, it cuts the intermediary between the investor and the ICO issuer. The entire investment is under the issuer’s control, offering a vulnerability to scams. On the other hand, a crypto exchange is an established business, and their attempt to scam may adversely affect their entire business model. 

Thus, initial exchange offering (IEO) is a reliable investment method. Binance Launchpad is the best platform for your next big blockchain project. 

2. Improved Liquidity

Initial coin offerings do not have higher liquidity. When you invest in ICOs, chances are that the developed tokens may not be tradeable at the start. With time, utility crypto tokens may become tradeable, but time is money when it comes to investment and trading in the crypto space. 

Conversely, the initial exchange offering (IEO) enables investors and traders to enjoy higher liquidity. Since the developed token of IEO comes directly from the exchange, users can exchange it with other digital assets or hold it long-term for better outcomes. 

Due to the increased liquidity, investing in IEOs is more productive and beneficial than ICOs. Improved pricing of the newly developed tokens is another perk of IEO since the hosting exchange platform adds to the value of IEO in the financial market. 

3. Market Exposure

In ICO, the developer is the fundraiser, which lacks trust and community. Therefore, a limited fund will come as the reserve for the blockchain project. IEO is different in terms of capital and performance. 

Crypto exchanges have a large user base globally. It offers diverse market exposure to newly developed crypto assets, resulting in better sales and revenue for the token. With enhanced project visibility, IEO gets extended support from the host exchange community. 

For instance, Binance has crossed over 170 million active users globally. A blockchain project on Binance will reach more users than an individual or group of crypto developers, meaning higher investment and funds for the project. 

4. Key Drawbacks

IEO may expose users to several risks similar to ICO. In ICO, the risks revolve around individual developers, while the initial exchange offering (IEO) faces vulnerabilities due to the hosting platform. Exchange dependency may lead to losing revenue due to its weak market performance. However, it can not be the case more often as crypto exchanges maintain their reputation. 

Moreover, some exchanges may not be eligible for regulatory compliance, adversely impacting investor sentiment and participation. Therefore, you must keenly observe the market trends and exchange performance for secure investment. 

How to Launch IEO?

Launch Initial Offering exchange

Investing in IEO is the right choice if you are looking for a lucrative source of earning through investment. Individual developers and organizations can launch their IEO when they fulfill relevant requirements. Understanding key steps in launching IEO is mandatory. 

1. Assessing Crypto Market

A thorough research on the market trends will clear your mind about your competitors and market gaps. Since the initial exchange offering (IEO) demands a well-researched white paper to build trust among the community of the chosen exchange, you will feel relaxed with the rest of the steps in launching your IEO. 

The best thing about IEO is that the crypto exchange handles mundane tasks related to your new blockchain project. All you need is a clear and comprehensive white paper discussing the key functions of your ideal project. 

Furthermore, determining your marketing strategy is also necessary for the success of your project. The platform undoubtedly exposes you to millions of users, making them invest in your project is your effort. 

2. Selecting a Favorable Exchange

A credible and high-performing crypto exchange is the next step toward your success in fundraising. However, no exchange allows listing a blockchain project without a solid minimum viable product (MVP). MVP refers to a minimally functional prototype of your project. 

With a fully developed MVP or a developing project prototype, you can select a crypto exchange to host your project. Many exchanges make up the crypto market, allowing crypto miners and developers to raise capital for their next big project. 

Binance Launchpad, OKEx Jumpstart, Bittrex, Huobi Prime, KuCoin Spotlight, etc., are some of the best exchange platforms to host your blockchain project. Each of them enables users to enjoy different features and benefits. 

3. White Paper Drafting

Before you develop and host your crypto project on a hosting platform, you must provide users and investors with supporting details to encourage them to put their money into your scheme. It is when white paper comes into play. 

A well-structured white paper includes several factors. From executive summary of the project to business model and solution, tokenomics, development strategy, plans for growth, and fund distribution are some of the key elements of the best white paper for your newly developing crypto token. 

There are no hard rules for drafting a well-structured white paper, but ensure writing for the sake of helping your audience to understand your idea. 

4. Token Development and Listing

It is the most important step in the initial exchange offering (IEO) that requires technical skills. Since you must create a smart contract for your token, you can hire the best blockchain developer for effortless development. 

After creating your crypto token, the host exchange will list it on the platform, initiating a token sale. This sale will attract hundreds and thousands of users to invest their capital in the project. 

5. Post-IEO Marketing

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. 

Our Tailored Initial Exchange Offering List

Exchange Offering List

When choosing the host platform for your token launch, some of the best exchanges are as follows:

1. Binance Launchpad

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. 

It is the pioneer of all platforms that hosted many tokens after the official ban on ICO from China and South Korea in 2017. With seamless UI and multiple languages support, Binance is the best place for IEO. 

2. OKEx Jumpstart

A token sale platform from OKEx, OKEx Jumpstart is one of the best platforms for IEOs. With a keen focus on higher liquidity and an excellent community of members, this platform is an industry leader. It offers leverage to the resources and expertise of crypto enthusiasts for successful blockchain projects. 

3. KuCoin Spotlight

Another excellent crypto exchange, KuCoin, is a renowned platform for blockchain enthusiasts. With two different operation models, including a “first-come, first-serve” and lottery model, KuCoin Spotlight ensures a seamless IEO project. It has a record for a swift IEO sale, selling a MultiVac project within 7 seconds of its launch. 

Conclusion

For crypto enthusiasts, an initial exchange offering (IEO) is the best form of fundraising for new blockchain projects. It allows users to select a hosting crypto exchange for developing and launching a new digital asset in the crypto market. IEO has several benefits, including better liquidity, higher confidence, and improved market exposure. 

If you find yourself suitable for launching an IEO, we at Debut Infotech offer the necessary support to facilitate your venture. Debut Infotech is a custom blockchain development company with a vetted team of experts providing cutting-edge blockchain services and products. Whether you want to launch an IEO, ICO, dApp, or blockchain-based application, we are one click away. 

Book a free consultation with our team to begin your journey to a lucrative future with our services. Since blockchain is an industry that requires technical knowledge, reading our blog posts about the subject will broaden your understanding of advanced technologies. 

FAQs: Initial Exchange Offering (IEO)

Q. What is the difference between ICO and IEO?

A.The key difference is the host of the crypto project. In ICO, the token developer controls the entire project, while IEO hands the control to the hosting platform or crypto exchange. 

Q. What is an example of an ICO?

A. Many successful crypto tokens, including Ethereum, Solana, Polkadot, etc., came through initial coin offerings (ICO). However, many ICO projects have exposed investors to financial losses and scams. 

Q. How is IEO safer than ICO?

A. The backup of a trustworthy crypto exchange behind the initial exchange offering is the reason for making it safer than ICO. Since there is no intermediary in ICO, there is a chance of an exit scam from the project developer. 

Q. What is MVP in IEO?

A. Minimum viable product or MVP refers to a developing crypto project’s least functional prototype or plan. It is essential for an exchange to allow the listing of the blockchain projects. 

Q. What are the requirements for IEO?

A. For a crypto exchange to host the IEO of a crypto token, investor verification, white paper drafting, MVP, regulatory compliance, etc., are a few requirements of the hosting platform. 

blog-image

July 11, 2024

Leave a Comment


USA

Debut Infotech Global Services LLC

2102 Linden LN, Palatine, IL 60067

+1-703-537-5009

[email protected]

UK

Debut Infotech Pvt Ltd

7 Pound Close, Yarnton, Oxfordshire, OX51QG

+44-770-304-0079

[email protected]

Canada

Debut Infotech Pvt Ltd

326 Parkvale Drive, Kitchener, ON N2R1Y7

+1-703-537-5009

[email protected]

INDIA

Debut Infotech Pvt Ltd

C-204, Ground floor, Industrial Area Phase 8B, Mohali, PB 160055

9888402396

[email protected]