What’s an Initial Exchange Offering IEO In Crypto?

A crypto project’s whitepaper is its guiding document for investors and one of the best IEO sources. The whitepaper should clearly explain what the project is all about, including what problem it’s solving and what the token will be used for. Many centralized exchanges let investors join an IEO with fiat as well as a wide range of https://www.xcritical.com/ cryptocurrencies.

What Is an Initial Exchange Offering (IEO)?

IEO is a form of ICO initiated by centralized crypto exchanges on behalf of crypto start-ups. The main difference between IEO and ICO is the presence of a crypto exchange as an intermediary. A team at the centralized exchange assesses the project viability and potential before offering its coin or token to the public and listing it immediately on the ieo marketing services exchange platform. An initial exchange offering (IEO) is when a new cryptocurrency lists on an exchange and becomes available to buy for the first time. Unlike ICOs (initial coin offerings), IEOs are conducted through centralized cryptocurrency exchanges.

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For example, holders of Travala tokens can purchase airline tickets and book hotel rooms online on the Travala website. One of the biggest reasons that many crypto projects use ICOs is that they make a new token available to any investors. There’s no exchange acting as a middleman, so investors don’t need to be members of a specific exchange or own a specific token already. On top of that, centralized exchanges don’t require investors to have their own self-hosted crypto wallet. The IEO provider keeps track of the tokens an investor buys during an IEO and ensures they’re safe.

Simplified Access to New Tokens

Although it has taken ICO several years to gain popularity, this method quickly lost its appeal to the public. The ICO model has drastically declined since its incubation in 2017, as most ICOs belonged to scammers and fraudulent projects. Investors can also look at IEO hedge funds, which are funds that primarily invest in IEOs. These can be a useful source of information about which exchanges and sub-industries are hot right now. Either way, you can safely invest in both ICOs and IEOs provided you carry out your due diligence and are aware that, like with any investment, there’s no guarantee of profit.

ICO, IEO, and IDO: What are they, and how are they different

The exchange platform also carries out due diligence on the project before allowing it to conduct an Initial Exchange Offerings. This involves examining the project’s whitepaper, the team behind it, the technology it’s built on, and other factors that contribute to its potential success. By participating in an IEO, investors benefit from the added security and credibility provided by the exchange.

In most cases, the IEO proposal is rigorously reviewed by the participating exchange. In some ways, the exchanges put their reputation on the line for every IEO they decide to offer. The platforms’ vetting procedures, at best, allow new projects that they believe are a good fit for the platform. That doesn’t mean they make for a good investment or a better one than an ICO. Before investing in a new token, you should make sure to do your own research.

One reason for this is its association with “input/output” (I/O) in computer science. Its technical connotation aligns well with the goals of many modern tech companies. As of 2021, there are more than 1,500 TLDs in the Internet Assigned Numbers Authority (IANA) root database, showing the wide variety of options available. The .io domain extension, in particular, is becoming popular in the tech industry. If you’re familiar with stocks, you’ll know that an IPO is an Initial Public Offering. That’s when professional investors, independent speculators, and supporters can buy shares in a company.

An IEO is often conducted when a new crypto project wants to launch its cryptocurrency or blockchain product but requires significant investment capital to do so. Yet IEOs aren’t necessarily more secure than ICOs – at worst, they can be considered centralized gatekeepers about the types of projects that proliferate. Projects must also pay to get listed on a centralized exchange, meaning that only somewhat established projects can earn a spot. And they might have to sign exclusivity agreements that prevent them from listing tokens on rival exchanges.

Using a .io domain is very popular among tech startups and companies because it fits with industry norms and trends. The term IO itself stands for “Input/Output,” which immediately signals that you are part of the tech world. This makes it a great branding choice that is cost-effective but highly impactful. As of March 2023, there were 1,089,147 registered .io domains, with a 32% year-over-year growth.

First, if you are setting up a hosting account, you get one free domain name. You will then be guided through the hosting and domain registration process. A domain that signifies a specific country can make customers feel more connected to the business. For businesses targeting local or regional markets, using country-specific TLDs like .us, .uk, or .de is often more effective. Just like a project can have an ICO and a subsequent IEO, a listing on a DEX may already have an IEO and ICO.

At that time, investors will receive an invitation to buy tokens at the IEO price using the funds they have already deposited with the exchange. Many scammy crypto projects have brief whitepapers that leave a lot of vague details. Well thought-out projects, on the other hand, will cover everything from the project’s tokenomics to the target audience. These can be valuable for finding hidden gems and projects that have flown under the radar. Investors can also use reviews and ratings to do their own research on IEO cryptos so that they’re not fully reliant on crypto exchanges’ due diligence.

Another important aspect to consider is that .io domains tend to be more expensive and less recognized than traditional domains like .com or .net. This might not be a worthwhile investment for non-tech businesses that do not benefit from the tech-savvy perception that .io domains offer. But, these offerings are usually limited to organizations like investment groups. Alternatively, availability and circulation may have been limited by the organization behind the project. For example, a coin may have already been minable but was then only available to miners.

The first major exchange to offer the IEO and popularize the practice was Binance through their IEO platform called Binance Launchpad. However, even Binance’s founder, Changpeng Zhao (aka CZ), admits that they did not invent the concept or the term and were inspired by “centralized ICO” websites that were popular in 2017. The crypto market is generally optimistic about the future of IEOs, foreseeing continued growth and evolution. This integration is seen as a step towards legitimizing IEOs as a mainstream investment option. Remember that investing in IEOs, like any investment in the cryptocurrency space, carries risks.

• During an IDO, the DEX’s community is responsible for approving a new listing.
• There are thousands of cryptocurrency and blockchain projects in existence or under development.
• Projects can raise funds with the help of the exchange’s customer base and launch trading for their token shortly after.
• There are several reasons why investors like IEOs and look to them to find new tokens.
• IEOs play a crucial role in the crypto ecosystem by providing investors with a more secure and regulated environment.
• There’s no exchange acting as a middleman, so investors don’t need to be members of a specific exchange or own a specific token already.

So, instead of the exchange buying coins from sellers and selling coins to buyers, the buyers and sellers just do business with one another. Because being verified by an exchange takes time, some projects may have an ICO and then have an IEO later down the road. However, because crypto projects are more discoverable and are more likely to be successful on an exchange, a project might not have its own ICO and instead wait to “go public” on an exchange. An example of an IEO is when crypto project Akropolis listed its $AKT token on Huobi.

Please note that the availability of the products and services on the Crypto.com App is subject to jurisdictional limitations. Crypto.com may not offer certain products, features and/or services on the Crypto.com App in certain jurisdictions due to potential or actual regulatory restrictions. This means that if you’re not quick, you may end up buying the coin for a higher price than you could have. If you invest at the ICO stage, you can lock in tokens at a low price and then look to sell them if the price rises following the IEO.

IEO’s allow for startups to participate in large scale investments opportunities with the introduction of their business to a large investment ecosystem. Overlooking this step can lead to legal issues over copyright and potentially cost you a lot of money. Always make sure your domain is unique and distinct to protect your brand. Crypto exchanges have a verification process, so crypto projects that make it onto exchanges are usually more reliable. Plus, when you buy from an exchange, you’re not giving up any payment information to the individual projects you invest in through the exchange. Once investors have found an IEO, they can sign up on the waitlist to invest when the IEO occurs.

For example, many investors that bought in the 2017 ICO hype were eventually burned by low-quality projects or assets that were deemed unlicensed securities. This challenging set of demands eventually gave rise to Initial Exchange Offerings (IEOs). For example, Binance Launchpad is one of the trading platforms that aims to deliver innovation and bring IEOs to the crypto market. The platform has helped more than a dozen blockchain projects raise capital since launch. Having the initial listing on a trusted site lends a sense of validity to the new token, which may lead to people believing the exchange has vetted the project and ensured its legitimacy.

Not all projects can rely on donations or contributions from generous asset holders. This small, but significant difference between ICOs and IEOs means that exchanges act as inspectors, curators, and gatekeepers for projects that want to sell their tokens to the public. Having an exchange serve as a mediator between the token buyer and token seller should, ideally, cut down on the rampant fraud and scams that plagued ICOs in the past. Even as blockchain technology is rapidly developing in myriad fields, it has already radically transformed the way businesses and organizations can raise capital and fund projects.

Also, make sure you aren’t unintentionally infringing on someone’s copyright. This due diligence helps protect your brand and ensures a clean start for your website. It allows you to conduct outreach without risking spam penalties to your main domain. Make sure you are listed as the “Admin Email” in the whois record for your domain, as you’ll need to authorize the transfer once initiated. For businesses outside the tech industry, using a .io domain can create confusion or misalign with the brand’s identity.