An initial exchange offering commonly known as IEO is a replacement for Initial Coin Offering (ICOs) which is a fundraising event for projects running on blockchains. First of all, why do we need IEOs if we already have ICOs, as ICOs are conducted by organizations and have no regulations related to them, in the past, there were many cases of ICO scams during the boom of the crypto market, because of which ICOs lost trust and interest of investors.
To overcome the limitations of ICOs, Initial Exchange Offering(IEO) was introduced.
What is an IEO?
IEOs are fundraising methods in which, unlike ICOs, Crypto exchanges play a key role, they provide a platform for Startups and investors to build a trustworthy relationship, Crypto exchanges evaluate the startups that have applied for IEO and handle all the sales of tokens. It helps the startups to market their coin as well as crypto exchanges that have already established user bases, and also helps in listing the coins in crypto markets that can help in the long term for the development of startups' value. Crypto exchanges take some percentage as a fee for the services they provide.
Binance was the first to introduce a platform for IEOs named Binance Launchpad IEO, followed by Gate.io, Bittrex International IEO, and many more.
Benefits of IEO
IEO is considered more secure as it uses a third party here, a crypto exchange platform, to verify the credibility of the new blockchain-related startups. The platforms before accepting the proposal of the project thoroughly check the background and does a detailed analysis of the whitepaper of the project.
As these platforms already have large user bases, marketing and advertising the product becomes easier for projects and as the platform already does KYC(Know Your Customer) and invests in Anti-Money Laundering(AML) techniques it helps projects to be safe from fraudsters from accessing IEOs.
It helps both the investors and the company to build trust in each other.
How to launch an IEO?
Launching an IEO is generally divided into four parts, which are
- Preparation
- Pre-IEO
- IEO
- Post-IEO
Preparation Stage
Before launching an IEO, make a strong team and get aware of the market requirements and understand the feasibility of your idea, this step will help you raise more funds for your project
Pre-IEO Stage
In this stage, you have to choose the exchange platform you want to launch your IEO with, make sure that the exchange platform provides all of the requirements and that your projects meet all of their needs so that there is less chance of rejection.
Once you have selected the exchange platform the next step is to draft your whitepaper, which represents the proposal document for investors. Make sure that your document includes all the necessary information about your project, like different strategies, tokenomics, roadmap, etc.
Although IEO is launched on an exchange platform, it is important to have a marketing website for the project, where users can know more about the project.
Once the above-mentioned things are done, you should look forward to the development of Tokens you want to launch IEO, Tokens are exchanged in IEO for already available assets on an exchange platform for raising funds. While developing tokens, decide the proper working of the tokens and limits of tokens on and outside your platform.
IEO Stage
After completing the pre-IEO stage, the next step is to list your token on the exchange platform for which you have to pass the exchange platform’s selection criteria. After that your token will be listed on their platform on a decided date then Users of the exchange platform who are interested in your project will invest in your fundraising by buying tokens of your project.
Post-IEO stage
Once the IEO of your tokens is over and the exchange platform will list your token, now it all depends on how good your project works and improvements you apply to your project, and the interest of your target audience.
You can contact our team if you plan to launch your IEO. They can help you through different stages of IEO.
November 23, 2024 at 12:30 am
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