What is IEO? How to invest IEO to achieve the highest efficiency
- 1. What is IEO?
- 2. How is the IEO organized?
- 3. Why Blockchain Projects Do IEOs?
- 4. Advantages and disadvantages of investing in IEO
- 4.1 Advantages
- 4.1.1 High trust
- 4.1.2 High security
- 4.1.3 Easy Token Buying and Selling
- 4.2 Cons
- 4.2.1 Relatively high cost
- 4.2.2 Required to own the minimum amount of Original Token
- 4.2.3 Limited User Base
- 4.2.4 Strict exchange process
- 5. Compare IEO, ICO and IDO
- 6. Advantages of IEO compared to ICO and IDO
- 6.1 Advantages of IEO with ICO
- 6.2 Advantages of IEO with IDO
- 7. Common risks when investing in IEO
- 7.1 For investors
- 7.2 For the project
- 7.3 For exchanges
- 8. Criteria used to evaluate when choosing an exchange
- 8.1 Criterion 1: Reputation level
- 8.2 Criterion 2: User community and virtual trading volume
- 8.3 Criterion 3: Good project selection
- 8.4 Criterion 4: Tokenomics has a good design platform
- 9. IEOs on trading platforms
- 10. Some prominent IEO investment exchanges
- 10.1 Binance Launchpad - Binance
- 10.2 Huobi Prime - Huobi
- 10.3 OK Jumpstarts - OKEx
- 11. Steps to start IEO investment
- 11.1 Step 1: Check, and research project information
- 11.2 Step 2: Research the information of the exchange that organizes the IEO
- 11.3 Step 3: Register an account, complete KYC information
- 11.4 Step 4: Check Cryptocurrency Used in IEO
- 11.5 Step 5: If you win, proceed to buy IEO
- 12. Strategies for effective IEO investment
- 12.1 Strategy 1: Invest in IEOs
- 12.2 Strategy 2: Invest in projects that raise capital with IEO
- 13. Overview of IEOs on Binance exchange
- 13.1 Evolution of Binance IEO Projects
- 13.2 Why do Binance IEO projects outperform ICO projects?
- 13.2.1 Secured Funds
- 13.2.2 Barrier to entry IEO is higher than ICO
- 13.2.3 Binance IEO Token Amount Is Higher Than Other Exchanges The
- 13.3 Instructions on how to buy IEO on Binance
- 13.3.1 What to prepare?
- 13.3.2 How to buy IEO on Binance
- 14. The History and Future of IEO
- 15. Should I Invest in an IEO?
What is IEO? Why do investors want to participate in this form of online capital calling? What are the advantages of IEO compared to other platforms? The following text of BHO Network's reading will help you learn more about Initial Exchange Offering. Please refer to the details to know more useful information about a product of an e-commerce exchange!
1. What is IEO?
IEO (Initial Exchange Offering) is a form of crowdfunding through an offering of Tokens on a Crypto exchange. In theory, the IEO on exchange A may or may not be listed after the sale. If the Token is sold on the exchange, it will be listed in advance, and this is also the reason why Binance IEO projects are expected. The reason is that players expect the coins on the list to pump.
2. How is the IEO organized?
Although Blockchain is new, there are thousands of crypto startups and companies operating. Through ICO or IEO events, players will compete for investment from Investors. When the developer joins the project, the User will hold an IEO and raise the first Tokens.
For a project team, participants need to meet certain requirements. In particular, the business model requirements must be clear. Team members with experience in technology and Whitepaper will take care of this part. The benefit of holding an IEO is to find long-term partners.
Companies and businesses need to determine if the first offering is on a hard or soft floor. If trading on a hard floor, investors cannot invest more than the minimum amount. For soft floors, it will be more invested but in the form of a "drip".
Once the IEO decision is made, the development team must choose the appropriate supporting exchange. Binance Launchpad has helped many projects achieve their intended fundraising goals.
Successful projects include: BitTorrent (BTT), Band Protocol (BAND), Axie Infinity (AXS), Alpha Finance Lab (ALPHA), and WazirX (WRX). A few other exchanges have established IEO platforms with their own benefits, requirements, and drawbacks.
3. Why Blockchain Projects Do IEOs?
Raising capital for a new cryptocurrency or Blockchain project is problematic due to high competition. IEOs will help business owners keep crypto and increase credibility for the next funding round. In other words, users will use the exchange to improve and stake their identity according to the IEO condition.
Token offerings on the exchange for the first time IEO were "sold out" very quickly. Investors will consider and depend on the project's vision and practical application. If the project wants to get help from the exchange, it can consider participating in an IEO. The project's cryptocurrency will also be listed on the exchange right after the sale.
Read more: What is IDO? Should I invest in IDO?
4. Advantages and disadvantages of investing in IEO
After learning about what IEO coin is, surely many people intend to invest in this form of online fundraising, and to achieve high efficiency through each mobilization, you need to understand the advantages and disadvantages of the project. Specifically, the strengths and weaknesses of IEOs are as follows.
Similar to other forms of online fundraising, Initial Exchange Offering has 3 strong points for players to decide to participate in.
4.1.1 High trust
The exchange will select and check the reliability of the project to ensure its credibility and avoid scams before each public funding. As a result, investors can feel more secure when participating in IEO transactions.
4.1.2 High security
The security of IEO is high so that investors can safely conduct KYC for the project. The information used in the transaction is absolutely confidential in the initial steps. Therefore, you can rest assured to call and invest in the ecosystem.
4.1.3 Easy Token Buying and Selling
Users will optimize the buying and selling process on IEO's exchange. Investors will pay a percentage of the Token and the listing fee. Next, the trading platform will help the project to market and organize the IEO according to the desired amount of funding.
In addition, Project can also take advantage of the customer base on the exchange and receive the contribution of the user file on the system.
Besides advantages, Initial Exchange Offering still has 4 disadvantages that investors need to pay attention to. The following information section of BHO Network will help you to answer the weak points of IEO
4.2.1 Relatively high cost
The main disadvantage of IEO lies in the list price. There is no denying that an IEO is a safe and effective alternative. However, the cost of the system is high, especially for startups, and this is a big problem.
For example: The listing fee can go up to 20 BT and some exchange platforms can cut even 10% off the tokens sold. This is why startups want to launch IEOs and actively factor the cost of the platform into their budgets.
4.2.2 Required to own the minimum amount of Original Token
IEO has the minimum amount of Original Token many times higher than the ICO. Because of this, the issuer of the cryptocurrency faces two problems.
First, the minimum is likely to exclude certain groups of potential investors. Second, the exchange can increase the value of the native token by creating a scarcity effect for users to set a minimum.
4.2.3 Limited User Base
IEO is limited to exchange users. If a country does not have a specific exchange, then players will be disqualified. Currently, some countries are applying the principle of banning financial investors from buying and selling IEO Tokens to ensure currency circulation.
The countries that are applying the ban can be mentioned as China, Korea, Thailand, Venezuela, Iran, Yemen, Burundi, etc.
4.2.4 Strict exchange process
Investor's reputation on the trading platform Online is very important. Therefore, if the development team fails to meet the requirements or the project fails, the system will suffer the consequences. For this reason, many electronic exchanges have additional steps of due diligence, whitepaper checking, and member screening, to ensure actual goals can be realized.
Investors can withdraw from IEO at any time if there is something unreasonable. The exchange will try to protect the reputation of the inverter. This means, you will have to consider carefully before making a choice, assessing the feasibility of the project.
5. Compare IEO, ICO and IDO
Currently, IEO, ICO, and IDO are investment forms that receive much attention. Each form has its particular advantages.
6. Advantages of IEO compared to ICO and IDO
Currently, the online lending trading platform has three main exchanges: IEO, ICO, and IDO. However, Initial Exchange Offering still has its own strengths for investors to participate in. Follow the content below.
6.1 Advantages of IEO with ICO
ICO (Initial Coin Offering) is a form of crowdfunding investors provide a sum of money for the project and receive back a corresponding amount of coins at the predetermined exchange rate. . The difference between IEO and ICO is the 3rd party intermediary organization, also known as an exchange. Specifically, the difference between the two platforms is as follows:
- ICO forces you to work directly with project owners. The whole process of KYC/AML and Token purchase will have no intermediaries but direct transactions with the project. .
- IEOs work directly with the project and exchanges will act as intermediaries for both parties.
Before participating in buying IEO tokens, you need to open a trading account. Complete the KYC/AML verification steps, prepare BTC/ETH/USDT inside that account and wait for the sale date to buy.
6.2 Advantages of IEO with IDO
IDO (Initial DEX Offering) is a form of fundraising through a Token sale on AMM. IDO usually has 2 pools, a pool for the community and a pool for users to hold Platform Tokens (POLS, DAO, …). The difference between this form and IEO is the intermediary stage. This is evident through:
- For the IEO, you will play "games" on a centralized exchange (CEX).
- For IDO, you will be playing on a decentralized exchange (DEX).
The second difference between IEO and IDO is that it is easier to open and sell Tokens through Initial DEX Offering than IEO.
7. Common risks when investing in IEO
Risks when investing in IEO fundraising is inevitable. So what are the risks of an IEO project? The following content will be specifically mentioned for readers to understand better.
7.1 For investors
IEO buyers can suffer losses or not earn profits according to their wishes after listing Tokens on the exchange list. Besides, raising capital on Initial Exchange Offering does not mean that you have completed the product.
Even if the Token has been listed, the project has not completed the product, cannot attract users and buyers, and the possibility of a price dump, in the long run, is very high.
7.2 For the project
In terms of branding, IEO is both good leverage and fundraising tool. However, when you join the IEO, you will have to pay a high cost to control a part of the project. The exchange can decide the token price, and listing time and control the price.
Besides, participating in IEO directly on the exchange concentrates power for investors. However, the price to pay for the "power" that you possess is not small. Failure of the project will inevitably lead to financial difficulties.
7.3 For exchanges
The risks of IEOs in exchanges are usually caused by projects. If the project fails or is a scam, investors suffer damage and lose credibility in the market.
8. Criteria used to evaluate when choosing an exchange
Choosing an electronic trading platform is a very important thing because if you choose the wrong one, you will have to suffer a lot of financial loss. So what are the criteria to evaluate the platform of IEO Binance? The following content will help you learn more about the Cryptocurrency Exchange evaluation criteria.
8.1 Criterion 1: Reputation level
Reputation is one of the important criteria that you need to pay attention to when choosing a trading platform. The higher the reputation level of the trading floor, the safer it will be for investors. Although the IEO organizer has improved the experience and optimized the operation to preserve the reputation, players still need to be careful when choosing a trading platform.
8.2 Criterion 2: User community and virtual trading volume
Volume and user community are the second criteria you need to pay attention to when choosing a virtual currency trading platform. Especially in terms of volume, players need to pay more attention because the data may include fake stats.
The volume number of actual users is entirely different. The primary advice for investors is to look carefully at the Cryptocurrency Exchange. Ideally, users should not buy IEOs on the exchange to limit the possibility of manipulation.
8.3 Criterion 3: Good project selection
Good project selection is the third criterion when choosing an exchange. The reason is that the quality of the project will affect the investment results and ultimately, you need to promote the project, so you must consider this factor carefully.
A good project will improve the success rate of IEO on the exchange regardless of the short or long time. Remember, IEO is just the initial launch pad. The future will depend on the content and applicability of that project.
8.4 Criterion 4: Tokenomics has a good design platform
Currently, all exchanges have issued their Tokens for circulation and IEOs too, the project uses its Token. This is a necessary condition for you to be able to use it. buy Initial Exchange Offering.
Another issue players need to pay attention to is liquidity after the sale ends. If Tokenenomics is not well designed, there is no use case, the exchange will be dumped. In particular, you need to pay attention to Token Transaction Mining before participating.
9. IEOs on trading platforms
Cryptocurrency exchanges have gradually put IEOs into operation. Binance is the pioneer to launch the Binance Launchpad IEO. In January, BitTorrent started a token sale on Binance Launchpad and raised $7.2 million in 15 minutes, reaching the hard cap of the crowd sale.
After the success of BitTorrent, Fetch.AI is the second cryptocurrency exchange to be launched. Immediately after launch, this project hit the hard limit of 6 million dollars in 22 seconds.
The chain of success of Binance Launchpad opened the way for the following IEO platform launches. Some impressive names can be mentioned such as: Among IEO platforms are Bitmax Launchpad, Bittrex IEO, OK Jumpstart (OKEx), KuCoin Spotlight and Huobi Prime.
10. Some prominent IEO investment exchanges
Investment trading on Initial Exchange Offering has gradually become a trend on cryptocurrency commerce sites. Some prominent IEO exchanges can be mentioned as.
10.1 Binance Launchpad - Binance
Binance Launchpad - the first and most prestigious IEO issuance platform of the crypto market. Currently, this is also the exchange that owns the largest number of users of the coin. The successful projects of Binance Launchpad can be mentioned as Bittorent, Sand, AXS, and Matic, ...
10.2 Huobi Prime - Huobi
Huobi Prime is the second-largest exchange in terms of a number of participants. Hubi's goal is to optimize user benefits through a rigorous testing process. The flagship project of the platform is TOP Network. As soon as it was opened for sale, the TOP Networ Token quickly "sold out" after only a few seconds, resulting in stable growth.
10.3 OK Jumpstarts - OKEx
OK Jumpstart is OKEx's potential crypto startup platform. The project owns a process of checking, registering and distributing Tokens according to its own rules to be assured of transparency and consistency.
11. Steps to start IEO investment
How to join and invest in the Initial Exchange Offering system? You can follow the steps below in turn.
11.1 Step 1: Check, and research project information
Players need to check basic information about the project such as operation purpose, developer, reputation level,... Based on that result, you need to research the potential, predict the ROI achieved, decide whether to hold long or short,...
11.2 Step 2: Research the information of the exchange that organizes the IEO
After the test, you need to Research institutional exchange information to determine its credibility and operating performance. Because each exchange will have its way of operating and trading money, players need to go to step 2 before registering acc.
11.3 Step 3: Register an account, complete KYC information
Know Your Customer is the process of collecting identifying information related to customers, such as portrait photo, ID number, Passport, address, ... KYC will help you eliminate unqualified people in the exchange. This is a required operation if you want to join the exchange and the money for players to join a larger platform.
11.4 Step 4: Check Cryptocurrency Used in IEO
Checking Cryptocurrency Used in the Platform is the next step you need to do. Each exchange will have its own Token, so you need to research in advance to avoid confusion in the choice. For example: Binance Launchpad will use BNB, USDC and USDT use Stablecoins,...
11.5 Step 5: If you win, proceed to buy IEO
After registering an account, determine the Token you can participate in the exchange translation to exchange, improving the chances of winning IEO. If the player has a strategy, he can choose to keep or sell the Token for the next round.
12. Strategies for effective IEO investment
The purpose of virtual currency investment is to increase profits. If you want IEO investment , you need a strategy. Players can refer to the following 2 investment strategies and apply them in practice.
12.1 Strategy 1: Invest in IEOs
Investing in IEOs is a way for you to increase your profits. At the time of 2018 - 2019, the capitalization of virtual currencies is quite small, so players often apply a buy-in strategy. The benefit of pre-purchase is to increase the value of the Token and attract more participants. When these two are combined, the token price will be increased significantly.
From 2021 to now, the token capitalization increased. For example: NB has a market capitalization of $50B, FTT has a capitalization of $17B, OKB has a capitalization of $4.5B, etc. You can implement a long leverage strategy to shorten the trading time. However, this approach is quite risky and has a high level of risk.
12.2 Strategy 2: Invest in projects that raise capital with IEO
The second strategy you can apply when participating in investing in Initial Exchange Offering is participating in a fundraising project. The plan will be divided into two groups of objects:
- IEO ticket winners: You can consider adjusting your money to the breakeven point after listing the floor. After that, the player will wait to hold until the desired target is reached. If you are confident in your analytical ability, you can keep it all.
- IEO non-winner: You can wait to buy at the market after the winner "discharges". Note, that players can collect Tokens at a reasonable price or not on a case-by-case basis.
Read more: What is Proof of Stake (POS)? Things you need to know
13. Overview of IEOs on Binance exchange
Binance is the first platform to launch IEOs. Up to now, this is also the largest exchange with a large number of players. Below is an overview of Binance's Initial Exchange Offering project for everyone's reference.
13.1 Evolution of Binance IEO Projects
2017-2018, the ICO created a crowdfunding boom but a percentage of the projects were operated by scammers. For bitcoin startups, this is a dangerous choice. IEOs ensure a higher level of trust because of active participation in the fundraising process and improve the efficiency of crowd sales. Initial Exchange Offering has great potential to become the standard fundraising model and create the next fundraising boom.
13.2 Why do Binance IEO projects outperform ICO projects?
Over the past 12 months, the blockchain company has chosen IEO (Initial Exchange Offering) as its fundraising method instead of choosing an ICO. Although ICO has many advantages, the high risk has caused the project to "lose" the trust of players.
13.2.1 Secured Funds
The big advantage of an IEO is the reduction in the risk of an investment fund being hacked from a dark web. Example: Etherparty hacked the ICO, by modifying the Ethereum address displayed on the website to reroute investments to the Hacker's address.
13.2.2 Barrier to entry IEO is higher than ICO
The barrier to entry IEO launch is higher than ICO and brings benefits to investors. At this point, the trusted exchanges only need to list the reputable project after it has been appraised. Compared to ICOs, many projects copy and paste existing white papers, create fake founder profiles and advertise via GG Ads.
In short, IEO is a good alternative for investors to give you time to access fundraising opportunities and increase investment funding. Players do not need to worry about safety in all operations provided by the exchange.
13.2.3 Binance IEO Token Amount Is Higher Than Other Exchanges The
IEO provides financial benefits to both the host exchange and the startup but does not clearly state the financial benefit to investors. This is also the reason the project has performed poorly so far. In a number of IEO studies from all major exchanges, over 50% of IEOs on smaller exchanges are not listed on CoinMarketCap.
However, most IEOs perform poorly and give negative returns on most exchanges, with Binance having a higher number of Tokens than the market. You can see that security tokens are growing in popularity among financial investors. Players can carefully consider making the right investment decisions in the future.
13.3 Instructions on how to buy IEO on Binance
How to buy IEO on Binance exchange is a common question of many people, especially newbies. BHO Network will IEO investment guide for everyone to understand the process of buying Tokens through the following few basic steps.
13.3.1 What to prepare?
Step 1: Register for a trading account on Binance
You need to visit the website binance.com to register an account and fill in the information: Email, password, and check the box "I have read and agree to the Terms and Conditions" Binance Terms of Service account" to create acc.
The system will display a new window and you tick the box "I don't," provided the user is not American. After that, the player will receive a verification code in the mail. The user needs to copy the code into the specified system time box to complete the registration procedure.
Step 2: Verify KYC account
You log in to the Binance account you just registered, click the human icon, and select Account. The screen will display an unauthenticated Level 2 account, the user selects the Submit Verification Documents link to submit the authentication document by following the steps:
- Step 1 - Passport Personal Page section: Upload the inside of the Passport or the back of the identity card .
- Step 2 - Selfie With Photo ID And Note section: Take a photo of your face and a hand-held photo that meets the conditions with the words Binance year. month. day. On the front of the photo is an ID card, ID card or passport.
- Step 3 - Personal Information: You need to fill in the Type, First Name, Last Name, Gender, Country and Territory and Passport ID information.
After completing the steps, you select Submit to send the document. The system will display the message Identity Verification is Awaiting Approval (Your document is pending). It takes a few days to get results. If the acc is valid, the player can proceed with the transaction.
13.3.2 How to buy IEO on Binance
You can start trading after registering an IEO account on Binance. Players can buy Initial Exchange Offering in 1 of 2 ways:
Log in to the Binance exchange and find the item that says Launchpad. Players can circle in red to announce that they can Farm Token MBOX within 30 days and click on this item to track information and details on how to participate in MBOX.
You select the square icon next to the word Exchange, select Launchpad, or visit the link https://launchpad.binance.com/en. The screen will display a list of IEOs that have been successfully offered for sale (Success) and are about to open for sale next time (Upcoming).
You click IEO with the word Upcoming and select Celer. The system will display information about Coin Celer and the opening time timer. The red circled item is the terms to accept to buy IEO, then select Accept. Finally, users will deposit Coin BNB for trading.
14. The History and Future of IEO
In 2017, Binance officially opened the IEO Token Launchpad service in 2017. Token Sales of Bread ($6 million) and Gifto ($3.4 million). The two products are both the first to jump out of Launchpad, most recently BTT, Fetch.AI, and the soon-to-be-launched Celer token.
The exchange mainly uses the utility token BNB as a means of IEO payment. Therefore, you should actively plan to launch additional projects by hoarding BNB, and watching for future announcements. In 2019, Bittrex tried to launch the first token. However, the project was canceled due to problems arising.
Bitmap recently introduced Launchpad by launching DOS - a decentralized oracle service for investors. The exchange's headquarters is located in Malta OKEx with the program name announced as OK Jumpstart with the aim of incubating high potential projects and supporting entrepreneurs.
Cryptocurrency platform EXMO launched an IEO in 2019, at which point Paytomat was chosen as the first partner. The platform's subsequent partnership will be KuCoin Spotlight and Huobi Prime.
15. Should I Invest in an IEO?
IEOs introduce a layer of centralized security and monitoring that is not present in ICOs. Investors can appreciate that new form of trust. However, some others judged the project to be intrusive and “not in the spirit of cryptocurrency”.
In the end, the benefits that IEOs bring far outweigh the negatives of the project, ICO, and related exchanges. You can participate in the IEO when there is a need and will get a potential 100x token. In the future, when Initial Exchange Offering becomes mainstream, this is the best investment option.
- What is KYC and AML? How to verify KYC successfully
- What is Mainnet and Testnet? Things about Mainnet & Testnet
Thus, through the content of the above reading, BHO Network has helped readers better understand “what is IEO?” and the issues related to crowdfunding through a Token sale. The future development potential of Initial Exchange Offering is huge, promising to build a large user community. Hopefully, those who invest in Bitcoin will choose the right investment channel and increase their profits.
Published on November 01, 2022
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