Initial Exchange Offering, or IEO for short is a practice that is being believed to be the highest fundraising activity of this present time, beginning the year 2019. Earlier it was ICO, but IEO because of its inherent advantages over an ICO, has soon pushed ICOs to the back seat and instead acclaimed a position for itself on a bigger front. Let us try to understand as to what an initial exchange offering is, how can one participate in an IEO, and what are the main advantages of using such a practice.
What is an Initial Exchange Offering
An initial exchange offering, one of the latest phenomenon in the complicated world of cryptocurrency, is packed with a lot of benefits for fundraising by startup companies. To put it most simply, and initial exchange offering is a token sale that is held on some cryptocurrency exchange, by the exchange, on behalf of the fundraiser. Before the token sale is actually held, the exchange and the project team enter some kind of contract to set all the terms of the agreement. Every exchange has its own set of criterion as to whether or not it would like to enter the token sale with a particular project team.
Initial Exchange Offering- How to Participate
Now if we consider from a buyer’s point of view, we might also be interested in knowing as to how to enter the IEO as a prospective buyer. It is a very simple process, as IEOs are relatively rare as of now, just look at the steps below on how to participate in some initial exchange offering.
1. Find an IEO of your choice. It is not a very difficult task.
2. Once you find the IEO of your choice, find out which exchange/exchanges are conducting the crowdsale.
3. You have to then register yourself on that exchange, most likely completing their KYC and the AML process as that is a must to participate in any initial exchange offering.
4. Now is the time to check as to which all cryptocurrencies are allowed for that IEO, and you shall need to fund your crypto wallet accordingly.
5. Wait for the IEO to start to buy the relevant tokens.
Initial Exchange Offering- The Main Advantages
The main advantages of using an initial exchange offering is that the project company is able to shed a lot of burden of fundraising off their shoulders, transferring it to the crypto exchange. The crypto exchange in lieu of this, charges some fee from the project team. So that ways, an initial exchange offering proves to be beneficial to both the parties. Now if we see from a buyer’s point of view, it is useful for them too, as they get a chance to invest into the latest upcoming projects, through a medium that they are able to trust easily – the crypto exchange. Online consultants like executium.com also have started offering such services, to plan and execute an IEO over some exchange, and they make the process even easier for the project team.