What is IEO?

IEO stands for Initial Exchange Offering, a form of crowdfunding through an offering of tokens on Crypto exchanges. With ICO, investors will buy tokens directly from the project. Then with IEO, the token will be sold on a certain exchange and anyone with investment needs can place an order on the listed exchange to buy.

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Theoretically, the token offered for sale by IEO method on exchange A may or may not be listed on exchange A after the sale is completed.

Difference between IEO and ICO

The only difference between an IEO and an ICO is in the appearance of a third intermediary organization – the exchange.

With the ICO model, investors will have to work directly with the owners of those projects. This means that the entire process of KYC/AML and token purchase will be without intermediaries, but directly dealing with the project.

With an IEO, instead of working directly with the project, the exchanges will act as an intermediary for both parties: the investor and the project.

To participate in buying IEO tokens, investors will need to open a trading account on that exchange. After that, complete the steps of KYC/AML verification, preload or transfer BTC/ETH/USDT to an account on the exchange and wait for the IEO sale to start trading. In some cases, exchanges will apply an additional method of using exchange tokens to participate in IEO purchases.

Advantage of IEO vs ICO

As analyzed above, with an IEO, the exchange becomes an intermediary to support the purchase and sale of tokens between investors and projects. This is unprecedented with the Crypto market. However, for traditional financial markets such as stocks, this model has been around for a long time.

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Investors will also feel more secure when there are a number of projects proposed by the floor. Instead of having to learn, research, take a lot of time and effort.

Increasing new users with high volume for exchanges.

When doing IEO, exchanges will attract a large number of users. This is considered as a form of marketing to help save costs but also a double-edged sword.

If the IEO is successful, the project will bring profits to investors. Besides, the exchange increases the reputation and revenue from users’ trading activities. However, if the IEO fails, the reputation of the exchange will also be greatly affected.

In the context of the floor competition is very fierce and constantly offers attractive programs. At this time, users will move to use exchanges that bring more benefits to them. It is this competitive factor that will help exchanges become much more serious in the process of reviewing potential projects with high probability of success.

Reducing costs for token sale activities, marketing costs for projects.

On the side of the project owners, the 4.0 money market has a new, more centralized fundraising model than the ICO. Working on projects, most of the team members are usually programmers. Very few people on the team have marketing knowledge. Especially for specific activities such as token sale. When organizing IEO successfully, projects save a lot of costs for Marketing. As well as being able to save the cost of listing on exchanges and also see more new investors, more confident in the project.

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It can be seen that IEO is a very good model because it can support many investment participants. It is reasonable that the majority of investors think that IEO will continue to lead the trend of crypto investment in 2020.