Initial Exchange Offering(IEO) – Top Fundraising Scheme In Crypto

Posted by John Kammy on January 6th, 2021

Are you wondering what IEO is all about? Is this similar to ICO? How does it work? And many more questions might be striking your mind right now!!  

Well, keep your eyes glued to the screen!!

On due diligence, I have gathered detailed information on IEO. Let’s get started…

Is this approach a good idea for traders? Well, a huge crowd in the crypto-world see the potential in this system and encourage others to get on-board.

What is IEO?

An Initial Exchange Offering ( IEO) is the crowdfunding strategy that enables crypto projects to fundraise directly on exchanges. IEO’s are similar to Initial Coin Offerings (ICOs), and are administered by a crypto exchange instead of the startup that seeks to raise funds with its newly issued tokens.

Basically, it is a new way of crypto-banking that is steadily attracting the interest of ICOs and traders across the globe. This approach contributes to a unique type of exchange where the exchange acts as middlemen between contributors and projects.

How Does An Initial Exchange Offering (IEO) Work?

Step 1: When a token sale is announced, instead of submitting contributions to a smart contract, IEO participants create an account on the respective exchange platform.

Step 2: They fund their coin exchange wallets and hire those funds to purchase the tokens of the start-up of the fundraising blockchain.

Step 3: In return, a listing fee and a percentage of the tokens are sold during the IEO.

Step 4: This whole mechanism is regulated by crypto exchange, along with the marketing process.

How To Participate In An IEO?

Initially, the first step to participating in an IEO is to check if the project you are planning to crowdfund is conducting an Initial Exchange Offering. Once you find a relevant project follow the below steps:

Step 1: First of all, by reviewing the start-up or development team’s website, you need to be sure whether an IEO can take place.

Step 2: You need to know about the exchange that the IEO is going to execute. You will move on to the next stage if you are already listed on the exchange and have a wallet. If not, to participate in the IEO, you need to build an account on the exchange.

Step 3: You will have to go through a sought-after verification process to decrease safety risks once you are registered with an exchange.

Step 4: You now have to find out which crypto alternative is available. The options for ETH Ethereum and BTC Bitcoin over the exchanges are usually open.

Step 5: Finally, you must wait until your IEO Initial Exchange Offering begins.

Exchanges Offering IEOs

Binance was the first IEO-conducting exchange which opened its token launchpad service in 2017. Bread ( million) and Gifto (.4 million) token sales were the first projects to jump off the launchpad. These were followed by BTT, Fetch.ai and Celer Network token launches.