The pace of the cryptocurrency market is skyrocketing more than anyone would have ever imagined a few years back. Surprisingly, traditional investors, as well as ordinary people, are readily investing in crypto tokens with a common goal of attaining huge returns. This is resultant of the massive success of bitcoin followed by the other digital currencies.
Interestingly, the digital currency industry has changed tremendously over the past few years. Many new concepts have emerged like the ICO (Initial Coin Offering), ITO (Initial Token Offering) and IEO (Initial Exchange Offering Services). These concepts are differential methodologies of raising money for crypto-based projects.
Not in the distant past, ICOs were the most popular choice of companies wanting to raise money for their blockchain projects. However, with the increase in the fraudulent practices related to ICOs have discouraged people from investing their funds. The former is also the reason why different alternatives to ICO like STO, ITO and IEO were conceived.
IEO launch services, no wonder, is the most readily used and reliable alternative for raising crypto funds. An IEO is nothing but a token sale that is conducted via an established cryptocurrency exchange. IEOs are handled by crypto exchanges, in order to raise funds by the sale of tokens on behalf of a specific organisation.
The notion of using an IEO marketing for raising funds was pioneered by Binance, the first crypto exchange introduce and support the idea. Of all the mediums, IEO has proven itself to be worthy of raising funds in exchange of crypto tokens. The reasons being:
- As IEOs must be regulated as per the precise laws of the exchange, the possibility of fraud is practically zero.
- IEOs are administered in a controlled setting by third-party exchanges which take charge of honesty and faithfulness.
- IEOs are more reliable, as a third party handles the entire process rather than the holding company itself.
- IEOs are not accessible to the general public, and just the present members of the exchange platform can engage in it.
- The investor/contributor has to transfer payment to the exchange (escrow) account principally, who will confirm the payment and process it once the bought tokens are remitted to the purchaser.
- The method of registering an IEO with an exchange is not as simple as ICO registration. To register as an IEO, the underlying eligibility conditions of the particular exchange must be met.
- Yet another essential advantage of an IEO is that the token will definitely be listed on the exchange platform once the sale ends.
Above are a few of the reasons why crypto investors, as well as start-ups, use IEOs over other alternatives.