In the beginning of
2019, the ICO market was down around 97% based on the amount of raised capital.
Although ICOs can raise
a huge amount of money, they also have many disadvantages. For example, ICOs
led to the flood of scams on the market.
This is just one of the reasons why many projects decided to turn their fundraising efforts to IEOs (Initial Exchange Offerings). And in 2019, we saw the rise of IEOs in the crypto market. In fact, CoinGecko published a report stating 72 projects raised a total of $262 million in the first half of 2019 via IEOs.
It seems that IEOs are
just getting started and that not even an upcoming bitcoin
halving will disrupt them.
So,what exactly is IEO? Let’s answer that question.
What is Initial Exchange Offering?
IEO is a fundraising
method where tokens from a certain project are sent to crypto exchanges to sell
to investors and traders.
To participate in IEO, the investors need to know which exchanges will support the project and which cryptocurrencies are accepted as a payment.
One of the reasons why IEOs are popular is that they are a safer method for fundraising compared with ICOs.
You see, IEOs leverage
the power and credibility of crypto exchanges, which makes it easier for investors
to participate as they have lower chance for running into a scam.
On the other side,
exchanges can charge IEO or listing fees, which means more income and a higher
number of users.
Now that we know the definition, let’s take a look at some of the most promising IEOs in 2020.
IEOs in 2020 – which looks promising?
Multichain Ventures is a platform for crypto merchant solutions and blockchain deployment. It has several products: The Tokes Platform, Cubed, Relli.cloud, and EDEN. Multichain Ventures’ IEO starts on January 31st.
Karuschain is a blockchain-based platform for tracing and tracking within the precious metal industry. Plus, the platform can trace back to the source of the precious metals. Karuschain announced its IEO starts on January 14th.
ExtStock is a crypto exchange founded in 2018, and based in the United Kingdom. Its native token is called XT, and is launched on ERC-20 blockchain. ExtStock is also conducting fundraising via an IEO, which starts on January 15th.
Qan Blockchain Platform
Qan is a quantum-proof secure, multilingual platform for running smart contracts that uses the unique Proof-of-Randomness (PoR) protocol. The company is based in Estonia and it will hold an IEO on the 20th of January.
Which crypto exchanges have platforms for IEO fundraising?
Some crypto exchange
introduced IEO launch platforms. Here are some of them.
Binance is the largest crypto exchange by trading volume, and also one of the first to introduce a platform for IEO launches, called Binance Launchpad. The platform has been operating since 2017, and it has hosted many popular and successful IEOs, such as BitTorrent, Fetch.Ai, and Celer.
Based in London, p2pb2b is a crypto exchange with various features and tools for successful crypto trading. Also, it has an IEO Launchpad, which was a host for various projects using this fundraising method. Some of those were RideNode, Travacart, and Carbon Offset Initiative.
LAToken is a crypto exchange with low withdrawal fees, a wide range of trading pairs, and an IEO Launchpad platform. Some of the projects that choose LAToken for hosting their IEO are Karuschain, PixelBit, and Monetorb.
Huobi Global is a popular crypto exchange that enables safe and easy trading with cryptocurrencies. And just like other big exchanges, Huobi developed its own IEO platform called Huobi Prime. The platform has a selective token listing based on their native coin, the Huobi Token.
Final words about IEOs in 2020
Although IEOs surged as
a safer alternative for fundraising in the crypto industry compared with ICOs,
you should still be wary when investing.
Unfortunately, the crypto space is still highly unregulated and you can never be sure when you might run into a scam project.