What are ICOs and IEOs in blockchain space?

This post was written by Kenon Thompson on March 23, 2023

Users also have access to a bevy of developer tools, which allow https://www.xcritical.com/ creators to use the benefits of decentralized auctions as leverage. Project owners have the option to launch an IDO on the Bounce platform using Ethereum, Polkadot, Solana, and Kusama. Bounce is an emerging platform that provides its users with a way to launch their own auction.

What Is an IEO or IDO in Crypto?

However, we cannot be certain whether the pandemic increased or decreased the amounts raised, considering that prior research suggests cryptocurrencies are used to hedge against economic uncertainty (Wieczner, 2018). Huobi Prime – Huobi Prime platform provides crypto projects a chance ieo marketing services to raise capital from qualified and genuine investors. The exchange does a rigorous screening to ensure only premium projects that have yet to be listed on any major exchange are included. OKEx Jumpstart – OKEx’s platform helps quality blockchain projects go public and get listed in a liquid and world-class market by holding an initial exchange offering. Fifty million ether tokens (ETH) were sold at $0.311 each, and on May 12, 2021, it hit an all-time high of $4,382.73, offering investors a 1,408,903% return on investment. Now not only is it one of the most valuable cryptocurrencies, but it has enabled an entire ecosystem of decentralized applications (dapps) to blossom from its technology.

Read our in depth guide on how to launch a successful IDO

They may also be required to sign exclusivity agreements that ban them from listing coins on other exchanges. Like a few other IDO platforms on our list, ScaleSwap focuses on providing a platform that offers a way for retail investors to get involved in crypto startups. Additionally, ScaleSwap is a multi-chain IDO, so new projects aren’t limited to the functionality and user base of just one blockchain. A well-written and informative white paper is essential for attracting investors and exchange platforms.

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The target group of such a campaign are large-scale and institutional investors. The objective is to reach them on a broad spectrum across key online channels, such as cryptocurrency websites and social media and to push the price of the coin. All in all, the challenges lies in generating as much hype as possible around a product or a company that is more often than not, industry-nascent and wanting increased exposure. A professional whitepaper outlines what is sold during the ICO – usually tokens – and its assigned value, the total amount of capital needed and the terms of the contract. A whitepaper contains project details such as the offering outlining the benefits for investors, a solid road map of the project and a timeframe for when the project is expected to yield earnings to investors.

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If an exchange has its own token, contributors would have to purchase token units before participating in IEO. Considering the ROI of IEO crowdfunding and the increasing demand from investors, it is projected that the IEO market will grow steadily in 2021 and beyond – both in the total amount of projects launched and the volume of funds raised. The market has shown high interest in the IEO fundraising model, and you can take advantage of this growth to push your crypto project to the next level. They can be considered as centralized gatekeepers for the type projects that spread. Projects must also pay to be listed on a centralized market, which means that only well-established projects are eligible.

So, new projects might earn a lot less cash that the total amount they raise through an IEO. A project’s legitimacy and exposure can be significantly increased with a well-executed marketing effort, increasing its appeal to potential investors. Additionally, strong marketing establishes the transparency and confidence that potential investors seek in a cryptocurrency enterprise. Thus, IEO marketing is critical to achieving fundraising goals and project success. The chosen exchange takes on the role of a counterparty, selling the tokens directly to individual contributors through their platform. This model streamlines the fundraising process, as the exchange manages the token sale, conducting thorough due diligence to ensure the project’s credibility.

To conduct an ICO, the crypto team simply needs to publish a project whitepaper detailing the vision, release a smart contract and kick off a token generation event. During the ICO period (typically 30 days), public investors can purchase the new tokens in expectation of price gains when they get listed on exchanges. After selecting an exchange platform, write up a proposal document to present it to investors.

In the world of cryptocurrency fundraising, Initial Exchange Offerings (IEOs) have emerged as a popular alternative to Initial Coin Offerings (ICOs). IEOs provide a more secure and trustworthy platform for startups to raise capital and for investors to participate in token sales. For blockchain projects that generate a lot of buzz, IEO platforms can help them raise capital quickly. Just look at BitTorrent, which managed to raise $7 million just 14 minutes after its listing on Binance Launchpad went live (it was later bought by Tron). That said, there are some marked differences from initial public offerings and IEOs you need to be aware of.

• Investors can build that shortlist using ICOBench, then follow up on social media.
• This decentralized auction site is perfect for those who want to create, design, collect, or trade tokens, assets, or NFTs.
• What distinguishes Gate.io Startup is its dedication to providing a seamless and secure token sale experience.
• Both approaches should not be viewed as disparate mechanisms where IEOs inspire trust and ICOs generally do not.
• These services comb through a project’s code, including its smart contracts, to ensure there are no bugs or scams built in.
• Its primary objective is to establish itself as a global platform that allows unrestricted user interactions and gameplay experiences across international borders.

In addition, some IEOs, like those on Binance Launchpad, let users buy new tokens with funds they already hold on the exchange, making it very easy for users to invest in new projects. New crypto projects almost always have a presence on social media, including Twitter, Discord, and Telegram. Joining the social media channels for a project is a great way to find out where and when it’s planning to list its token. Often, investors can communicate directly with a project team to better understand the IEO requirements and why a project chose to list with a specific exchange.

Crowdfunding is a way to raise funds for a specific cause or project by asking a large number of people to donate money, usually in small amounts. KuCoin Spotlight’s appeal lies not only in its reputation but also in its commitment to providing a seamless and compliant token sale process. The platform boasts a user-friendly interface that simplifies the participation process for investors while also prioritizing regulatory compliance through robust Know Your Customer (KYC) and Anti-Money Laundering (AML) verification procedures.

If the token’s price then pumps following the IEO, you’ll be able to sell it and potentially make more profit than you would’ve if you bought the token when it was already live. Binance has held 17 IEOs since launching Binance Launchpad in 2017 and these tokens saw an average first-day price increase of 1,458%. There are several reasons why investors like IEOs and look to them to find new tokens. This also means that investors in an IDO don’t have to go through KYC requirements and can invest in tokens anonymously.

An example of an IEO is when crypto project Akropolis listed its $AKT token on Huobi. There are several crypto presale projects that are holding much-anticipated IEOs in the near future. Dogeverse is a new meme coin that’s racing through its presale and is set to end in a matter of days, while is one of the most successful ICOs of the year so far. The process is similar for most major crypto exchanges and may vary depending on the requirements to join a particular IEO. These can be valuable for finding hidden gems and projects that have flown under the radar.

Referral programs are the most effective ways to organically and constantly recruit new community members and advocates at a very large scale. ICO investments can be risky as they can be subjected to scams as the market is still under-regulated. Investors do not have any security if an ICO turns out to be fraudulent or fails to rise in value. According to a Satis analysis conducted by Bloomberg in 2018, about 80% of ICOs at the time were thought to be fraudulent transactions. EOS is one of the most promising platforms in the crypto sector as it has the potential to work both as a means of instant, fee-free payment and as a dApp-supporting platform – again, capable of instant, free transactions.

RSA (short for Rivest–Shamir–Adleman) is one of the widely used public-key encryption algorithms for secure data transmission and is used to securely transmit messages over the internet. Remember that investing in IEOs, like any investment in the cryptocurrency space, carries risks. Conduct thorough research and consider your risk tolerance before participating in any IEO. The developer, CoinMarketCap, indicated that the app’s privacy practices may include handling of data as described below. The developer, Rain Management, indicated that the app’s privacy practices may include handling of data as described below.

This was followed by similar restrictions enforced by India’s central bank, the Reserve Bank of India (RBI), in April 2018. Bolivia’s Financial System Supervision Authority (ASFI) issued a resolution in July 2018 that prohibited the use of cryptocurrencies, including ICOs, in the country.

Core developers had left Block.one and joined the community, and other developers had been sent to work on another project. In August 2021, Yves La Rose founded the EOS Network Foundation, a community of fans and EOS supporters who had a vision of making EOS more attractive to users and developers and investing in EOS-based projects. IEO mechanism establishes trust between investors and token issuers more than it does in ICO. This is done by filtering out the bad actors in the early stages during the process of Customer Due Diligence.

Renowned for its transformative role, Binance Launchpad empowers promising blockchain projects by offering them a platform to raise capital and garner widespread community support. The drawbacks of IEOs – gatekeeping, opaque vetting processes and listing fees – have attracted some projects to initial DEX offerings. IEOs are directly listed on the exchange, meaning that new projects have access to a large, highly liquid market. That allows the project selling the tokens to enjoy access to a rapt audience already interested in buying new tokens and enables the possibility for sales to be boosted by the marketing power of the exchange.

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This entry was posted on Thursday, March 23rd, 2023 at 5:59 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.