An initial exchange offering (IEO) serves the purpose of raising funds simply and easily with the technical support of blockchain technology, much like an initial coin offering (ICO). The difference between the two is that ICOs offer fundraising through the initial launch of coins or tokens through a smart contract, while IEOs are offered through a cryptocurrency exchange platform—in this case, the Tokens.net exchange Launchpad. The popularity of ICOs is wearing off, but IEOs, also known as ICO 2.0, are just starting to gain momentum.
What is an IEO Launchpad?
An IEO launchpad is a host for IEOs from start-ups and companies looking for a simple and effective way to raise funds by presenting their businesses and goals through IEO campaigns. An IEO launchpad may host numerous IEOs, and they take care of the fundraising process.
The Tokens.net cryptocurrency exchange offers numerous trading tools for beginners and more experienced traders, in addition to offering hosting services for IEOs through the Tokens.net Launchpad. The Tokens.net Launchpad is designed to support business projects through the foundational technology that blockchain represents, helping businesses and start-ups fund their growth and kickstart their fundraising campaigns. The Tokens.net Launchpad provides visibility for the hosted IEO projects with complete support through the available resources and technology, all backed by a strong team of industry-focused professionals while offering top performance, high liquidity, safety, and stability for transformative and innovative projects.
IEO Explained: The Definition and Meaning of IEO
IEOs are the next generation of ICOs, also known as ICO 2.0 in cryptocurrency circles. While ICO projects are hosted and launched by the development teams behind cryptocurrency- and token-based projects, the IEO launch process is supported and hosted by exchange platforms that have the needed tools and technology for pre-launch and post-launch support for IEO projects. IEOs allow interested investors to gain easy access to a fundraising campaign by using investment funds that are already available in their exchange platform wallets.
ICOs have been in the spotlight of blockchain-based fundraising for years; however, the great number of ICOs (surpassing 2,000+ different projects) made the process of fundraising through ICO risky because users are directly investing in projects that don’t necessarily have support from validated and legitimate exchange platforms. The number of scam projects is more likely to affect investors negatively, while the lack of direct investing caused losses in some cases. With IEOs, that problem is solved because exchange platforms act as launchpads facilitating the process of fundraising for businesses and start-ups that offer IEOs to fund and kickstart their projects and offer real value to investors.
Usually, project owners—that is, the issuers of IEO tokens—pay to be hosted on exchange platforms to launch and fundraise their projects In return, the exchange platforms host and supports the IEOs and the process of launching the project and raising funds while providing the needed tools and options for interested investors. Moreover, the exchange platforms hosting the IEOs actively market and represent the hosted IEO projects, providing attention growth and marketing awareness, thereby attracting investors. Additionally, instead of waiting for a listing on different exchanges, as is the case with ICOs, IEOs are automatically listed on the exchange platform that’s hosting the project’s fundraising.
How Users Benefit from IEOs
Unlike with ICOs, which are launched and hosted by the development teams behind the tokens and cryptocurrencies, IEOs are launched in trusted environments presented by exchange platforms. Users who are interested in investing in IEO projects can easily make their initial investment—that is, token purchase—through a single platform and by using an account they already have on the exchange platform.
Perhaps the most important advantage of exchange launchpads is increased trust. Users can rely on legislation and the reputation of that very exchange platform. The fact that the IEO project is trusted by the exchange platform also contributes to the overall trust and security of investing in such projects. This model reduces the number of invaluable, scam ICO projects.
IEO teams can take advantage of the reputation already built by exchange platforms that offer launchpad services. These teams can make minimal efforts to market their project, allowing the IEO launchpad to take over the role of the marketer and promoter, offering its user base that acts as a potential user base for IEO investors. IEO teams can focus on the technical growth of their project while the exchange platform takes on the role of the fundraising host.
Anyone can create and launch an ICO. These waters are still heavily unregulated. However, before an IEO is accepted by an exchange platform, the platform conducts a background check to ensure that investors get the best value and that the offered project is innovative, valuable, and transformative.
Security is another feature of crucial importance that comes with IEOs. IEOs are more secure than ICOs because exchange platforms provide IEO-based smart contracts and the needed KYC and AML verifications for users with accounts. The crowdsale of IEO projects is conducted directly on the exchange platform with the entire process backed and supported by the platform itself, which allows users to rely on the security and trustworthiness of the platform. The platform also checks and tests all projects for scam factors to ensure that investors are paying for legitimate value when investing in an IEO.
With IEOs, tokens are immediately available and listed within the campaign, creating a more transparent and easily accessible fundraising model. Because the exchange works on all related phases of the crowdfunding process, token issuers can focus on their project development.
How to Participate in an IEO
To participate in IEO crowdfunding and pledge to a project showcased on Launchpad, interested investors need to create an account on the cryptocurrency exchange platform presenting the IEO project. Upon creating an account, users need to make a deposit and fund their accounts so that the available funds can be used for investing.
A simple KYC verification process is conducted to support the overall level of safety, security, and trust, which plays a major role in IEO fundraising and the way cryptocurrency exchange platforms operate. After completing KYC verification, users can choose to exchange for the token they are interested in, thereby supporting the IEO crowdfunding and becoming valuable project supporters.
The value of the IEO fundraising model is showcased by both the end-users and the token issuers. Both parties are using a trustworthy model of investing and fundraising by relying on the reputation and technical abilities of the Tokens.net exchange platform, which hosts IEOs as a legitimate and well-equipped launchpad. The number of scam projects is reduced, and trust and security are increased. Fundraising through an IEO is prompt, with tokens becoming immediately available and listed on Tokens.net.