What is Initial Exchange Offering and what extras does it give?
Last year, appearing as an alternative of the well-known Initial Coin Offering (ICO), a new promising crowdfunding mechanism arrived, called Initial Exchange Offering (IEO).
The following article can be seen as a dissection of it along with its pros and differences to the ICO. Read on.
IEO in a nutshell
With Initial Exchange Offering, the project X counts on an exchange (or an array of exchanges) to play as the counter-party. In other terms, the exchange is the one that performs the crowdfunding, the smart contract and most of the marketing strategies.
Here actually comes the first difference to the ICO where the developer is the counter-party.
When it comes to Initial Exchange Offering, the tokens are minted by the project’s developer and sent to the exchange chosen. It will then sell the tokens to individual contributors for Ether.
It’s surely a win-win situation for all the three parties:
The project is being backed by an authoritative exchange, which has to carry its own due diligence on it. Also, there is a significant marketing costs reduction thanks to the solid base of potential IEO contributors from a broad number of exchange users.
The contributors can be hardly scammed as they can only buy tokens from the exchange. Moreover, IEO prevents eventual price manipulation, which is a BIG FAT PLUS compared to the Initial Coin Offering.
The exchange benefits from the listing fees or the particular conditions set with every project.
Besides, the conditions, including soft and hard capping the contribution per person and fixing the price per token, which are commonly seen in an ICO, can be set in an IEO as well.
However, each project can arrange different deals, terms, and conditions with the exchange(s), such as a flat fee, marketing costs, and more.
A step-by-step guide on how to participate in an IEO
Another differentiation between IEO and ICO comes with the level of complexity of the participation process.
As a matter of fact, participating in an Initial Exchange Offering is quite simpler, arriving in 4 easy steps:
- Discover which exchange is hosting the IEO. Keep in mind it could be more than onе.
- Sign up for an account on the exchange by being guided by its whitelisting and KYC (Know Your Customer) procedures.
- Find out what cryptocurrencies will be allowed during the IEO and fund your account properly.
- Start to purchase your tokens once the IEO commences.
End of the line
After all, the popular crowdfunding mechanisms are still a work in progress towards completeness. However, the Initial Exchange Offering is proof of a tricky industry ultimately maturing and returning its integrity.
Unquestionably, this crypto development is one worth examining by investors and entrepreneurs alike.
CURES Token, the futuristic blockchain-based healthcare platform, will be soon launching its Initial Exchange Offering. More exciting news are about to come.
Meanwhile, read what David Bonev, Co-founder & CFO of CURES Token, shares about the blockchain technology’s impact over the healthcare industry: here.
