Our focus has always been on fostering blockchain innovation around the world. As one of the world’s premier digital asset trading platforms, we have the ability to host initial exchange offerings (IEOs) for innovative projects in order to raise important funds and distribute their token to advance their blockchain technology. While we are the host of the IEO, the token team makes the final determinations on the parameters of the IEO and its token, including pricing, lock-ups and other economic terms, and we let the market and our customers decide how and whether they want to participate in an IEO. As with all trading on our platform and all purchases of tokens, there are risks to purchasing tokens in an IEO — it could result in a gain or a loss. There’s no guarantee of profits.
We wanted to shed some light on the IEO process and what our customers can expect from us in the future. If there’s one key takeaway, please know that Bittrex charges a small fee for providing the IEO service (taken out of the money raised) and does NOT dump tokens on our market.
How does Bittrex International select tokens for IEOs?
In addition to our normal token listing review process, each candidate for an IEO on Bittrex International goes through an IEO approval process to ensure that only the highest-quality most innovative token projects conduct IEOs on Bittrex International. Specifically, the additional review includes:
- Token Issuer Due Diligence: Full corporate due diligence is performed on the company that controls and issues the token.
- Token Ownership: Detailed review of historical sales, target token distribution, allocations, and vesting periods
- Use of Proceeds: How or where the project team intends to spend funds
- Timeline and Roadmap: Suitability of IEO given past project achievements and future milestones
- Strategic Partnership and Advisor Review: Requires written documentation of partners and advisors that are listed on the token team website.
- Communications Review: Social media / public communication; written authorization for the use of third-party brands or images in IEO marketing materials
This process ensures that only the highest-quality most innovative token projects conduct IEOs on Bittrex International. Token teams can start the process by submitting a listing request and requesting an IEO.
You can learn more about the selection process on our blog.
Should I do my own research?
Just as we have done our research on whether to partner with a certain coin/token on an IEO, it is critical that our customers do their own research on the IEO, the token team, and the token to determine whether they would like to participate. By participating in the IEO, you are voluntarily choosing to engage in sophisticated financial transactions that are not devoid of risk, and you should be sure to understand those risks before choosing to participate. Like any financial transaction, there is the opportunity for gains and losses. Bittrex International cannot guarantee that purchasing tokens in an IEO will be profitable, either in the short-term or the long-term.
How is a coin/token pricing determined?
Prior to an IEO, Bittrex International conducts a thorough review of the token ownership and related economics, including a detailed review of historical sales, target token distribution, allocations, and vesting periods. However, the token team sets the sale price in the IEO, has final say on all economic terms of the IEO, and controls the supply of tokens. After the IEO is completed and trading goes live, the market determines a coin/token’s value. Bittrex International has no role in a coin/token’s pricing or valuation after the token is listed and does not engage in any tactics that would affect prices, including selling tokens through the IEO or in our markets after the IEO is completed.
Additionally, we believe that a few weeks of trading should not determine the value or price of an IEO. We should be looking forward to the future of blockchain, where a token can take us and what they can accomplish.
Will you address what happened with Ocean Protocol?
We’ve heard your frustrations, we’ve read misinformation on social media, and we’re here to clear up the confusion surrounding the Ocean Protocol IEO. We recommend reading the Ocean Protocol blog for details on token distribution and their side of what happened with the IEO.
· Bittrex receives a small IEO service fee depending on the project and scope. That is our fee for providing the service. We do not charge for listing.
· Unsold Ocean Protocol tokens were returned to Ocean. Learn more: https://twitter.com/oceanprotocol/status/1124355421232300034
· Once the token contract is public and accessible, other exchanges were able to list Ocean Protocol. Neither Ocean Protocol and Bittrex International have control over other exchange listings.
· Bittrex does not and will not ever “dump” tokens on the market.
· There will be no refunds from Ocean Protocol IEO. By participating in the IEO, you agreed to the TOS that clearly outlines the risky financial transaction you are willingly participating in.
To learn more, we recommend reading the Ocean Protocol blog for details on token distribution and their side of what happened with the IEO.
Will Bittrex International conduct more IEOs?
We will continue to host additional IEOs. We truly believe in blockchain technology and we want to help token teams in developing their projects. Stay tuned and follow Bittrex International on Twitter for future IEO announcements.