Initial Exchange Offering (IEO)

Scamming ICOs have tarnished the reputation of blockchain investing. To mitigate the risk, a new form of ICOs has emerged, known as Initial Exchange Offering (IEO).

IEOs leverage the P2P concept of ICOs. Instead of trading directly, IEOs use a crypto exchange as an intermediary between the issuer and the investor. This is said to have several advantages for issuers and investors:

• Token issuers enjoy (depending on the popularity of the exchange) a wider reach i.e. in the P2P-based ICO - and thus better chances of success in reaching the funding goal. In addition, a listing on a reputable crypto exchange provides the projects and companies with a certain legitimacy. In addition, the exchanges usually also serve as a secondary market, which saves the issuers work. Another advantage that should not be underestimated is that most Exchanges subject their users to a KYC process.

• Investors benefit from the curated vetting process IEOs carefully go through (sometimes more and sometimes less) before reputable exchanges list them. While this does not guarantee profitable investments, it significantly reduces the likelihood of fraudulent projects. Furthermore, investors can participate in various IEOs (fundraising events) and the secondary market at the same time in one central place and collect their tokens in a central wallet - and only have to register once or go through the KYC process.

The most popular crypto exchanges for IEOs are Binance Launchpad, KuCoin, Bittrex IEO, Huobi Prime und OKEx (OK Jumpstarter).