What is Initial Exchange Offering(IEO)?
Initial Exchange Offering(IEO) is developed from Initial Coin Offering( ICO) in the past. However, there is one key difference: an ICO is offered on a cryptocurrency exchange platform meanwhile an IEO allows an investor to buy the tokens Before they are officially launched in the market, creating room for major returns. Exchange platforms are the companies like third parties to facilitate the trading of digital assets.
Projects of IEO will seek the services of an exchange, which are normally offered at a fee, and the exchange will float the tokens on behalf of the project. The project has to submit a proposal that will be rigorously reviewed by the exchange supporting it. Exchanges have to perform due diligence to preserve their reputation. The projects are vetted by exchanges and once the presale is over, the token will be listed on the exchange.
What is Main Benefit of IEO?
The main benefit is that the projects have to pass due diligence. This lowers the risk of an investor falling victim to scam projects in the cryptocurrency market. Moreover, listing on the exchange will also act as a marketing strategy to access to a large user base, boosting its values as the level of demand grows bigger. In fact, the price of most tokens rises up to xx times after IEO and listed on exchange platforms.
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