A New Funding Model of Crypto Exchanges Attracts the Investors
By Ece Simsekalp on ALTCOIN MAGAZINE
The new fund-raising model of the crypto exchanges, Initial Exchange Offering (IEO) has attracted the attention of investors worldwide.
Initial Exchange Offering is an unknown type of mass funding among the types of public offerings. Since 2014, different types of Initial Exchange Offering models have been applied and this model has accelerated the implementation of new projects. Blockchain-based projects sell their digital coins to investors to finance their projects with IEO model.
IEO and cryptocurrency exchanges not only sell new tokens (digital currency) but also list the tokens on the exchanges immediately after the sale ends. Most importantly, it plays a vital role in the active marketing of tokens which are sold on the exchange. Therefore, with IEO, both the exchange and projects work together to achieve greater efficiency and undertake an intermediary between new projects and investors.
It is much more beneficial for the projects to rely on the exchanges expertise to ensure that the process between entrepreneurs and investors is safer for both parties. Although most software developers work in the blockchain, they are not a stockbroker. For IEO, blockchain-based initiatives listed on several exchanges operate on a more equitable system that can support projects that are new in the sector, more transparent than previous funding models like ICO. In the system with the Blockchain technology, any action cannot be returned, modified or canceled.
Tokens will be able to reach a wider audience as they have more diverse places to sell than the companies that conduct ICO themselves. On the other hand, customers will be able to access reliable token options from the exchanges they use.
Basic steps of investment on IEO
Research on Public Offering
The use of Blockchain technology in daily life increases with new projects. IEO, which is one of the first stages of the projects developed with the technology enthusiasts blockchain, is of importance for the projects to be started in the stage of investment. IEO is one of the best ways for this process to take place in a safe environment. Although this method is rarely used by the projects, it can be seen how the project can be financed by examining the website and social media channels in order to see if the participatory projects will pass to IEO and the roadmap can be learned by reading their whitepaper.
Registration on the Exchange
According to the researches and decide on which exchanges conduct the IEO; should be considered about which cryptocurrency should be accepted. Although the currencies such as Bitcoin and Ethereum are the most widely accepted encryption passwords; some swaps can use IEOs to promote their local cards.
After that, the registration process can be completed on the exchange; During registration, KYC / AML verification is important for security, which may take several hours or several days. Therefore, you need to make sure that it is not done at the last minute.
Waiting for IEO Starts
After these steps, the cryptocurrencies are ready to be purchased in the exchange. When the purchase process is completed, the transfer to the user’s wallet as a token will be provided quickly.
Although IEO is a new approach, there is no doubt that cryptocurrencies and exchanges will make it more attractive for a wider market as it will continue to grow over time.
