Why IEOs Matter: Everything You Need to Know About Initial Exchange Offering

We previously discussed the differences between ICOs, STOs and IEOs and saw how in consequence of a global change, entrepreneurs were turning to a new way of collecting funds. At the end of 2018 we saw a shift to Security Tokens Offerings, a more secure and regulated way to raise funds. Expected to be 2019’s primary choice by start-ups and investors, its adoption may be threatened. Now, Initial Exchange Offerings (IEOs) is on the table.

While the premise is still the same — a token issuer conducts an IEO to raise capital for project expansion. The difference lies in the use of a crypto exchange to directly sell the to host the token sale. IEO is everything ICO should have been. Safer, more reliable and better controlled. KYC, personal data and lucky chances aimed at gaining “exclusive” access to an ICO is off the table (Although IEOs are substantially safer than the ICO craze of 2017. Nevertheless, investors are still required to conduct their own due diligence).

IEO benefits for start ups & entrepreneurs

The IEO approach is beneficial for the start-ups as most of the developers are qualified in the blockchain code, but they are not ICO experts. Thus, it is much better for the startup to rely on the expertise of exchange to ensure the process done in a secure way to both sides. Potential investors will feel more comfortable purchasing tokens using well-known cryptocurrency exchange platforms online and depending on the size of the exchange, the project may reduce their in/outbount marketing funnels for fundraising and focues mainly on development. By having more diverse places to sell tokens, issuers will be able to reach a wider network other than their own websites or using mainly broker/dealers. While the exchange and IEO model doesn't necessarily legitimize the IEO project by default, it provides safety of the investment process.

IEO benefits for investors

For a user, an IEO is easy to participate in as they don’t need to manage on-chain transactions with different wallets on different blockchains. A potential investor only requires an account on the exchange and funds in their account to buy any traded token off of marketplace. In most cases, a higher degree of trust behind a project will give users better trust regarding these projects and will exchanges to add more IEOs that investors can easily trust.

How to participate in an IEO?

• Sign up on an Exchange: Once you have figured out which exchange will be participating in your desired IEO; in order to complete the registration, most exchanges require a KYC validation that might take a couple of hours to a few days to process.
• Find Out Which Cryptocurrency Will Be Accepted: Bitcoin and Ethereum are commonly accepted. Other alt coins are sometimes acceptable, depending on the exchange. Some exchanges might promote their own token and permit it as a tradeable currency.
• Wait for the IEO to start: Once setup is complete, use your desired cryptocurrency to trade the IEO tokens in the said exchange.

Stellerro was created to assist asset owners, funds, entrepreneurs & startups in taking part in an alternative method of fund raising. Stellerro believes that as the blockchain ecosystem matures, digital offerings will become easier to access and invest in and IEO is one of the required steps to do so. Stellerro had announced it’s public sale and are expected to issue their IEO soon. FInd out more at www.stellerro.com or contact the team for any inquiry at: info@stellerro.com.

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