Why Initial Exchange Offering is Fast Dominating the Blockchain Industry
Since its inception in 2013, Initial Coin Offerings (ICOs) have come a long way. With half a decade of catching up with the blockchain evolution, there’s a good chance you are already familiar with ICO. But the question today is, have you ever heard of its counterpart – the Initial Exchange Offering (IEO)? Today, IEO is fast becoming a new friend for startup enthusiasts.
Initial Exchange Offering: An Overview
Initial Coin Offering (ICO) and Initial Exchange Offering (IEO) share the same primary goal of raising funds. The main difference, however, is that ICOs are typically launched by a startup on a specific platform. IEOs, on the other hand, are a distribution of tokens offered by an exchange for the token issuer.
IEO is gaining a solid reputation for helping startups by simplifying the fundraising process. Issuing tokes and finding the investors to distribute them properly within the legal framework is a complicated and lengthy process. IEO eliminates these cumbersome processes. All that’s left for you to do is relax and watch the funds go in.
Perhaps the most appealing advantage of IEO for startups is its ability to introduce and expose them to established markets and other noteworthy resources. Another significant advantage of the IEO is that the token is already listed on exchange right from the start. However, it depends on the size of the exchange. Most of the major crypto exchanges today offer very healthy liquidity as well.
Recently, ICOs are experiencing complicated setbacks due to the constantly emerging regulatory requirements. Established exchanges are already equipped with tamed distribution systems and the investors with liquidity. It is a new trend today wherein startups partners with exchanges in the effort to fulfill their obligations without wasting substantial amounts of time.
When compared to ICO, IEO is considerably much efficient – especially to those people who need to raise funds immediately. The IEO platform serves as the bridge between investors and issuers. This is because it provides a secure space for the investor while making the token issuers life much easier.
What are the Necessary Procedures?
While IEO sounds to be extremely helpful, it is also best to remember that establishing a partnership with a reputable exchange is no simple task. The exchanges require stringent verification processes, and the reputation of the project and the team must be top-notch. It is worth noting that the verification process is a must for exchanges to protect their reputations from the fraudulent token issuers.
Everything begins with the authorization process. Once done, the tokens will then be listed by the exchange. The exchanges typically require a listing fee for the token listing. Some reputable exchanges are known to charge a staggering amount of fee for listing unknown coins. However, the listing fee payments happened once, and you may negotiate to pay from the succeeding of the token sale.
The most critical indicators for the successful IEO are its reputation, popularity, and the size of the exchange. Simply put, larger exchanges attract more participants to the token sale. After the listing, the exchange works on promoting the tokens to their users and audience.
Are IEOs a Stable Option for Startup Entrepreneurs?
At the time of this writing, IEOs are enjoying immense popularity. Investors can easily decide on providing funds because they have the guarantees of a reputable exchange. Startup entrepreneurs can effectively cut on costs and relieve themselves of the toxic workloads by assigning the crucial tasks to the exchange.
To sum up, IEOs provide excellent opportunities for everyone involved. The system is proof of the dynamism and never-ceasing improvement of blockchain, a kind of technology that can put smart users ahead of most people in present times.