IEO (Initial Exchange Offering) has burst into the crypto industry in 2019, completely eclipsing the familiar ICO (Initial Token Offering). And this is not surprising, because exchanges have taken on a serious responsibility – to offer the community promising projects which they are responsible for.
The HYIP around IEO has started when Binance held a BitTorrent token sale. The campaign gained unprecedented popularity, after which the exchange management decided to use the new format henceforth.
The popularity of IEO is due to the following advantages:
- Trust. Placement is carried out on exchanges, which value the reputation of projects.
- Security.KYC/AML or simpler – the process of verification of IEO participants is also conducted by the exchange.
- Listing. When IEO round is completed, the exchange takes care of a token listing.
- Reduction in marketing campaign costs. In contrast to ICO, when projects had to allocate a huge amount of cash for advertising, attracting investors to IEO follows a simplified procedure.
However, there are also some drawbacks. One of the disadvantages of holding IEO is the listing fee.
Although IEO seems like a safer and more effective way to raise funds, crypto startups may find it difficult to find the required sum for listing.
Reputational risks for the exchange is another cons. If the exchange team checking the applications for IEO is not qualified enough, then the reputation can be seriously damaged.
Despite the drawbacks, many crypto startups can succeed thanks to the new crowdfunding method.
Besides Binance, there are also other Launchpads for running IEO. However, not all of them are secure and reliable. Lukki exchange is an exception from the rule. Venus Energy and Lancer.Network successfully held token sales on the Launchpad and attracted $1 Mln in total.
On August 16 EarthBi holds IEO on Lukki Launchpad. The project deals with environmental issues, particularly, the diffusion of innovative biopolymers. Its token ERA will allow buyers to obtain a higher amount of raw materials or discounts on finished products made of bioplastic.