The topic of Crowdfunding definitely grips the attention of the audience. First, we told you about the rise and fall of the ICO era. Then the STO model started to take over. And now there’s a brand-new player in the game that many startups are willing to consider.
So, without further ado, may we present you the IEO — initial exchange offering — a new and improved type of ICO.
What’s the Catch
Unlike with the ICO, the IEO suggests that an exchange will manage the token sale on behalf of the project and sell the tokens on their platform. Obviously, in order to get listed, the project has to pay a certain fee, which covers both listing and a percentage of the actual sales. Once the IEO is finished, crypto projects can get their funds, which totally eliminates smart contracts from the whole process.
Investors-to-be are required to set up accounts on the exchange, pass the KYC/AML procedures (if the exchange has ones, however, they usually all do), top up the exchange wallet with IEO cryptocurrency (depends on a particular project) and use it to purchase the tokens.
One of the IEO pioneers was Binance with their Launchpad. BitTorrent used it as a platform for their token sale and they were fully sold out during the first 15 minutes. Now if you think that’s impressive, you’re in for a bigger surprise. The crowdsale for Fetch.AI finished in 22 seconds!
Remarkable numbers inspired many other exchanges to join the hype. Bittrex, Okex, BITMAX, Kraken, Huobi, Kucoin, and many other platforms couldn’t miss the opportunity to strike it rich.