What is IEO? The difference between IEO & ICO

What is IEO?

As cryptocurrency is getting more and more popular these days, let’s find out what is IEO and the differences between IEO and ICO.

IEO stands for phrase Initial Exchange Offering, a form of crowdfunding calling through a token offering on Crypto exchanges. If with an ICO, you will buy tokens directly from the project. With IEO, the token will be sold on an exchange, who want to invest can go there to buy it. Theoretically, tokens are offered for sale according to the IEO method on exchange A may or may not be list to the exchange A after the sale is complete.

Differences between IEO and ICO

The only difference of IEO compared to the form of ICO is in the appearance of a third party intermediary – the exchanges. With the ICO model, you will have to work directly with the owners of those projects. This means the whole process KYC / AML and buy tokens will not have intermediaries that deal directly with the project.

As for IEO, instead of working directly with the project, exchanges will stand out as intermediaries for both parties: investors and projects. To participate in buying IEO tokens, you will need to open a trading account on that floor. Complete the KYC / AML verification steps, prepare the BTC / ETH / USDT inside the account and wait until the opening day to buy. In some cases, exchanges will apply the method of using a token to participate in buying IEO.

Advantages of IEO over ICO

Safety and focus for investors.

As analyzed above, with IEO, the exchange becomes an intermediary to support the trading of tokens between investors and projects. This is unprecedented for the Crypto market. However, for traditional financial markets such as stocks, this is very normal.

On the investor side, you also feel more secure when there are a number of projects proposed by the exchange. Instead of having to research for yourself, it takes a lot of time and effort.

Increasing the number of new users with a large volume of exchanges.

When implementing IEO, exchanges will attract a large number of users. This is seen as a form of marketing to help save costs but is also a double-edged sword. If IEO is successful, the project will bring profits to investors. Besides, the exchange increased the reputation and revenue from the trading activities of users. However, if the IEO fails, the reputation of the floor will also be affected.

In the context of fierce competition and constantly offering attractive programs. At this point, users will switch to using exchanges that are more beneficial to them. It is this competitive element that will make exchanges much more serious in the process of reviewing potential projects with high potential for success.

Reduce costs for token offering, marketing costs for projects.

On the side of project owners, siblings have a new capital mobilization model, much more focused than the ICO. As a project, most of the team members are usually programmers. Very few people in the team have knowledge of Marketing. Especially specific activities such as token offering. When the IEO organization is successful, projects save a lot of money for marketing. At the same time, you also save the cost of listing on the exchanges and see as well as more new investors, more confident in the project.

It can be seen that IEO is a very good model because it can support many investors. It is logical that many siblings think that IEO will become a trend of investing in cryptocurrencies in 2020.