One of the lines delivered by Snoop Dogg in the movie “Starsky and Hutch” says, “Why to go to the starting line when you can go straight to the finish?” Although it may feel a bit too cinematic, it does hold good in some of the most practical applications of life, and especially in the realm of crypto investments. For a long time, crypto investments were confined to initial coin offerings or ICOs as they are commonly abbreviated. Although they have democratized the entire realm of investments for crypto projects, they did have a downside. In essence, the highly unregulated nature of ICOs meant that the possibility of frauds and scams was extremely high. Security token offerings do exist, but they are a bit too rigid, and they require a lot of paperwork, including, but not limited to, the validation of the asset and working out the tokenomics. Is there a possibility of an investment option that is as open as an ICO but still, controlled and moderately regulated, so scams do not damage the reputation of the fundraising process?
The answer lies in Initial Exchange Offerings or IEOs.
Let us digress a bit to look at the way ICOs work. All that a company launching an ICO needs is a white paper, tokens — their utility and distribution, crowdsale dates, project’s funding goals, and so on. It does cost a considerable chunk of money to market your ICO in the right areas and among the right investors.
Once the side of the token is complete, users can employ those tokens for the utility they provide – it may be to access the premium section of the product or for some quantity of the finished product. However, it does not translate into anything tangible outside the ecosystem.
The ICO issuers had to approach exchanges to request them to list their tokens for trading purposes. The exchanges might opt to do it for a considerable sum of money or even ignore the token completely. Thus, the ‘utility ‘ of the token does not move outside the product/project’s ecosystem.
The greatest challenge in the ICO system is in the uncertainty of whether or not the exchanges would accept the token. In the IEO, the token is offered on behalf of the project or the entrepreneur by the exchange itself! It means that the uncertainty associated with the acceptance of the token by a crypto exchange is eliminated – the exchange has already endorsed it even before it goes out on the sale.
Most IEOs are listed on secondary exchanges. Reputed exchanges like Binance have ‘Launchpad,’ an exclusive platform for IEOs. The fact that IEOs is backed by names like Binance talks a lot about how promising and advantageous IEOs are.
The advantages don’t stand only for the companies that issue IEOs. Even for the users, there is quite some hope for lesser fraud.
With all these advantages, it is not a thing of wonder that crypto companies would like to launch their own IEO. There have been success-stories that speak volumes about IEOs and their success – BitTorrent raised $7.2 million in 15 minutes through their IEO. If you thought that was fast, VeriBlock raised $7.2 million in just 10 seconds of its launch!
The launching of IEO is almost as simple as launching an ICO, but it gets cumbersome in a few places, which we will address later. For launching an IEO, you will need:
All of this information should be presented in a white paper, and it functions as an essential document of your IEO.
All the above-said processes are under the control of the company, but it is essential to shape your IEO in a way that a reputed exchange like Binance will accept.
Each exchange will have its own application form. These forms are quite likely to be lengthy and cumbersome, and it might require quite a lot of detail. Although the requirements are lavish, all these things are needed because this alone can help validate your project, and that is where the reputation of the exchange also lies.
Once the submission is made, an expert team from the exchange will review your project based on factors like the development stage, the token readiness, the scope, the team, and the possibilities of you, your project, and your token finding success.
Once the verification is complete, they will list your token on the exchange. The exchange will charge an upfront fee for listing the token or coin on their platform, and there is also a possibility that they might work on recurring profits and commissions. However, considering the fact that you are going to gain potential customers right from the first day, it might not seem like a huge expense but rather a meaningful investment.
IEOs are quite likely to be the fine point of crypto fundraising – they avoid unnecessary interventions from regulatory bodies like the SEC, but at the same time, they also ensure considerable safety for your token and the investors.
If you would like to create your IEO, you can get in touch with IEO development companies. They will understand your requirements and craft your IEOs in such a way that it is quite likely to be accepted by reputed exchanges.
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I’m a business strategist and a passionate blogger who writes about cryptocurrencies and blockchain technology. I’m a big crypto enthusiast and I love learning new business opportunities and discussing them with fellow businessmen in the cryptosphere. I’m also a blockchain expert with ample research experience and I can give you suitable solutions for your blockchain based business.
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