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 into 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
The initial exchange offering, one of the latest phenomena in the complicated world of cryptocurrency, is packed with many benefits from fundraising by startup companies. To put it most simply, the 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 held, the exchange and the project team enter some kind of contract to set all the terms of the agreement. Each exchange has its own set of criteria 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 offerings.
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 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 buying the relevant tokens.
Initial Exchange Offering- The Main Advantages
The main advantage 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. In lieu of this, the crypto exchange charges some fees from the project team. In that way, an initial exchange offering proves to be beneficial to both 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 in the latest upcoming projects, through a medium that they are able to trust easily – the crypto exchange. Online consultants like executium.com have also started offering such services to plan and execute an IEO over some exchange, making the process even easier for the project team.