Initial Exchange Offerings (IEOs): The New Alternative to ICOs
By CryptoMedics Official on ALTCOIN MAGAZINE
Initial Exchange Offerings (IEOs) represents a more advanced phase of ICO and looks more like the future we anticipated. Following the meteoric rise of ICOs in 2017 and 2018 and the subsequent decline, there was an urgent need for different marketing models. High-risk activities related to ICOs meant that it had to be phased out and replaced with more secure alternatives such as IEOs.
What Are IEOs?
IEOs are initial token offerings just like ICOs but do not take place on the token issuer’s website but on a crypto exchange platform. There are many reasons as to why crypto exchanges are so popular and attract multitudes of people. First, they have an extensive variety of coins, multiple payment methods, and robust user protection. Popular crypto exchange platforms are compliant with AML/KYC and include a procedure for all partners to adhere to.
Listing a token at the exchange requires that the company be compliant with laws in the country of origin and meet the legal requirements of where the exchange is registered. The added security layer ensures that crypto-scams are effectively kept out.
What is the Difference or Similarities between ICO and IEO?
ICO forms the basis from which IEO has emerged. It would be impossible to have IEO without ICO. On the other hand, ICO is a blend of IPOs (initial public offerings) coupled with fundraising and crowdfunding. The similarity between ICO and IEO lies in the preparation procedures. However, with IEO, you have access to distribution channels and the user base of the exchange. Primarily, IEO offers a broader audience reach if you list in one of the reputable crypto exchanges. Also, a variety of activities such as token sale, promotions, and distribution take place in the platform.
Who is IEO for?
While ICO was widely publicized, some companies operating within or outside the crypto-sphere may have missed the opportunity or simply were not ready for the new blockchain technology or tokenization. IEOs provides a more robust alternative to raise funds and companies that join will have a more extensive network and a bigger opportunity to make a profit on the exchanges. Investors and traders will have more trading options, and the possibilities to make a profit will be higher.
How to Get Listed in an Exchange
It is daunting and time-consuming for new investors to find a suitable exchange that is willing to accept them. The high interest in IEOs means that potential slots in exchanges may already be filled early in advance. Your best chance is to work with a service provider who already knows about crypto marketing and has a partnership with these exchanges.
Legal Aspects
Compared to ICOs, IEOs are more advanced in terms of legal issues. Your token has to be a utility token in most cases with a legal opinion supporting this. Security tokens are rarely accepted.
Advantages of IEOs
IEOs have a considerable edge compared to ICOs, here are some advantages:
- Safety and security — customers’ funds are protected through compliance procedures, therefore providing a safety net.
- Quality — the high level of competition for listing projects on the exchanges ensure high performance, and only companies with quality can survive.
- Transparency — the higher level of regulation has ensured all activities remain open and under scrutiny.
- Convenience — since users can invest directly from their exchange’s account, the time taken to transfer funds and set smart contracts is effectively eliminated.
- Equality — IEOs provide a wider pool of investors by setting the investment cap at a more accessible level to more people. This prevents the emergence of the so-called ‘crypto whales.’
How to Succeed with IEOs
Your marketing strategy will play a major role in helping you build a supportive community. This will typically require a lot of effort and dedication. Just like ICOs, you also need to come up with an efficient team to showcase your best to investors. You will also need a whitepaper and unique propositions that will make investors want to partake in your company. Press releases through major crypto news media can help get the word out there. Make sure you keep communicating with your community as often as possible.
IEOs are proving to be the most active platforms for attracting investors, professionals, and other crypto users. Crypto traders make their buck from daily fluctuations and will typically spend a big chunk of their time on the exchanges. IEOs have a clearly defined compliance procedure, which makes it ideal for all crypto enthusiasts to carry on with their activities in the exchanges. Therefore, they become a hub for crypto profits.
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