2017 was the year of ICOs. It was a breakout year, in which startups raised as much as $6,18 billion. 2018 was even better. According to the data collected by CoinDesk, Initial Coin Offerings raised more money in the first three months of 2018 than the whole of 2017.
Although these numbers sound impressive, we still have to look at the other side of ICO fundraising. The ICO market is flooded with scams and Ponzi schemes. They have fancy names, appealing white papers, and professional websites, and it’s easy to fall for them.
The hard truth is that in recent years, thousands of cryptocurrencies have been created and, over 90% of them have already failed.
There are plenty of flaws in using an ICO as a way of fundraising. These flaws led companies and startups to search for better, more secure and more reliable way of fundraising.
And this is were IEOs took the floor.
What is an Initial Exchange Offering?
An IEO is just like an ICO: a way of fundraising, but run through an exchange as an intermediary. IEOs are agreements between project developers and crypto exchanges, and the tokens are distributed directly through an exchange.
Now let’s answer the main question:
Why is everyone moving to IEOs?
In the early 2019, BitTorent launched its fundraising through Binance’s platform LaunchPad. Their success was huge: they managed to sell 59.4 billion tokens, and it took only 15 minutes to reach the hard cap of $7.2 million.
The whole IEO fundraising process has proven to be more reliable and easier to use than an ICO. But this is not the only reason why IEOs are becoming increasingly popular. Here are some other reasons for that:
IEOs have credibility
An IEO as a way of fundraising practically eliminates the posibility for scams. A crypto exchange has a duty to thoroughly research each project before it’s hosted on the platform. The project also has to be compliant with KYC legislations.
They often distribute rewards programs
Reward program usually include distribution of airdrops and bounties. For example, BitTorent held several successful airdrops, and here you can find step-by-step guide how to join it.
Many crypto exchanges are airdrop-friendly such as Binance, Huobi, and KuCoin. IEOs are compliant with them, and distribution is usually straightforward and easy.
IEOs are not restricted
In the beginning of 2018, China blocked all websites related to cryptocurrency trading and initial coin offerings (ICOs), and banned any ICO operations in the country. Plus, different countries have different regulations when it comes to ICOs. IEOs aren’t faced with this problem.
With them, exchange also benefits
Exchanges can earn money from listing fees, and they also benefit from new users interested in one particular IEO. Plus, exchange gets marketing out of the deal. A good example of this is Binance, which got in the spotlight after launching BitTorrent token.
Are IEOs new ICOs?
Rumour has it that 2019 will be the year of Initial Exchange Offerings. What we can say for sure is that IEOs are gaining on popularity, especially after Binance Launchpad showed to the crypto world that this way of fundraising can be successful.
Find Alerts for legitimate & good airdrops on the bigger Twitter promoters.
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