Initial Exchange Offering (IEO) and its Benefits -Crypto App Factory
An Initial Exchange Offering, as its name suggests, is conducted on the Platform of a Cryptocurrency Exchange. Contrary to initial Coin Offerings (ICOs), an IEO is administered by a crypto exchange on behalf of the startup that seeks to raise funds with its newly issued tokens.
As a token sale is conducted on the exchange‘s platform, token issuers have to pay a listing fee along with a percentage of the tokens sold during the IEO.In return, the tokens of the crypto startups are sold on the exchanges platforms, and their coins are listed after the IEO is over. As the Cryptocurrency exchange takes percentage of the tokens sold by the startup, the exchange is incentivized to help with the tokens sold by the startup; the exchange is incentivized to help with the token issuers Marketing Operations.
How to Participate in an IEO?
• Generally, the steps to participate in an IEO begin with checking if the project you are intending to crowdfund is indeed conducting an IEO. After which, you should
• Find out which exchanges are hosting the IEO.There can be more than one participating exchange.
• Sign up for an account on the exchange by passing their Whitelisting and know your Customer (KYC) Procedures.
• Check what Cryptocurrencies will be accepted during the IEO and fund your account appropriately.
• Wait for the start of the IEO to purchase your tokens!
What are the benefits of an IEO?
For a user, an IEO is easy to participate in as they don’t need to manage on-chain transactions with different wallets on different blockchains.Instead, a user only needs an account on the exchange and some funds in their account and can participate completely through the trusted website’s interface. Additionally, the exchange is staking its reputation behind the projects on its platform, offering a higher degree of trust behind the Project.
For a Project looking to raise funds, an IEO offers the promise of an immediate userbase that can see their product, and depending on the size of the exchange’s audience, could mean that the project can reduce their outside marketing funnels for fundraising, allowing them to focus only on the development of their product.
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