IEO — the rebirth of ICO
ICOs (Initial Coin Offering) was born in 2016, had a golden age in 2017 and almost died in 2018 when a majority of companies in late 2018 were unable to raise a single Bitcoin in their token sale.
But now they are back, upgraded to a new level. Welcome the ICO 2.0, also know as IEO (Initial Exchange Offering).
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At basics, IEO is the same as ICO, but it utilizes the crypto infrastructure, specifically exchanges, the way ICOs did not, making it more appealing to the investors.
Here’s how IEO significantly differs from ICO
Unlike ICOs, IEOs are conducted by exchanges. There are a lot of exchanges, starting from small scammy ones which no one uses, to huge with volumes of up to a $ billion per day.
1. Picking the exchange
Evidently the exchange you chose to organize your IEO on the matter. A lot. Of course the bigger the exchange the harder and more expensive it will be to do an IEO there, but the importance of a good exchange cannot be emphasized enough. If you can’t get on any of the big exchanges, then you should not do IEO at all, as it will be a waste of your time and money. Rather spend that energy on building a better product, so that you can eventually get accepted on the top exchanges.
The marketing is done by the exchange where IEO will be held. Or actually, there’s not much marketing done at all, as it’s not needed. Crypto investors are looking at those top exchanges to see what IEOs are coming. Thus community hype and promoting on ICO listing sites are not needed. Finally, their era has finished.
3. Due Diligence
When in ICO era, every investor had to do their due diligence by himself, which was hard, and therefore many did not do them, with IEOs, the exchange does due diligence itself and you can be assured that if there’s an IEO sale going on on one of the top exchanges, it’s valid. The exchanges will not want to risk their reputation by running a scammy IEO, and they have enough money so that low life criminals cannot bribe them.
4. No room for ICO pools
Remember those installations called ICO pools? They were supposed to get better deals for small investors, but in reality, they just got paid by ICOs to promote their shitty token sale and sometimes just took the money and ran. Well, luckily they are not needed either. The exchanges are the new ICO pools and ICO platforms at the same time.
Obviously, since the token sale happens on the exchange care of KYC. And since the users of exchange have already passed KYC when they registered, there’s no need for another KYC for every IEO.
As you can see the free market solved the problem that was born on the free market by itself. It was not the government. In fact, all the regulations that came during 2018 did absolutely no good. The government just has no ability to solve any problems, it only creates new ones.
With IEOs and the bull market, the crypto economics is more promising today than it was in 2017. Token sales evolved from the wild west market of ICOs to institutionalized professional sales of IEOs. And I’m very confident that the future has only good things to bring.
IEO — the rebirth of ICO was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.