Withering away all the speculations about the downfall, cryptocurrencies have managed to establish themselves as strong financial offerings giving stiff competition to the traditional payment solutions. Working on the blockchain technology, the crypto industry has evolved in heaps and bounds in recent years while pooling funds and support from the big entities, entrepreneurs, and investors from around the world. Each day marks the entry of several new projects in the digital currency market in the form of ICOs and IEOs.
IEO is the popular acronym for Initial Exchange Offering, a comparatively new trend that gained popularity after the stringent attitude forwarded by the government bodies towards cryptocurrencies. As the name suggests, an IEO is managed and operated by a cryptocurrency trading exchange platform on behalf of the startup firm that aspires to pool in funds from investors through its newly issued tokens. The token sale is conducted by the exchange, which frees the startups from dealing with the cumbersome regulatory requirements related to the issuance of tokens. The exchange sells the tokens of the startups and lists their coins after the closure of the IEO round. For these facilities, the exchange gets a listing fee as well a certain percentage of the tokens sold during the IEO.
The investors who aspire to take part in the IEO need to create an account on the concerned cryptocurrency exchange where the IEO is being channelized. They then fill in their exchange wallets and use the funds to purchase tokens of the new startup. The exchange helps the startup in gathering more and more customers by popularizing the token amongst its community members. IEOs add an extra layer of trust to the project launched by the new startup and supported by the cryptocurrency exchange. These offerings help in encouraging active participation from the experienced players of the crypto arena as well as the beginners who are willing to explore the world.
Presently, there are an array of global exchanges that help startups in conducting a successful IEO on their network. The world’s leading cryptocurrency exchange, Binance, was the first platform to launch Binance Launchpad, a platform dedicated to IEO for potential startups. Other well-known IEO platforms are Bittrex IEO, Bitmax Launchpad, OK Jumpstart, KuCoin Spotlight, and Huobi Prime.
Initial Exchange Offerings were introduced in the crypto domain as the perfect substitutes for Initial Coin Offerings. The exchange offerings have gained significant popularity in recent times as investors now prefer to put in their funds in projects which are backed by reliable sources and entities. By earning the support of renowned crypto exchanges, a particular project earns an undue advantage over others in the market. IEOs are likely to revolutionize the crypto industry in a big way by opening doors for an array of potential projects and offerings.
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