An Initial Exchange Offering (IEO) is a sales campaign organised by a crypto exchange; to auction tokens. Several IEOs could take place in several exchanges and the right; to participate is preserved only to exchange users. Initial Coin Offerings are similar to ICOs only in the sense that they allow investors; to purchase upcoming cryptocurrencies while crowdfunding the project. 

Recent legislative practicing restricting the use of ICOs to run token projects has seen most crypto startups run for alternative methods for raising project funds. As a result, the trend of Initial Exchange Offerings (IEOs) has began gaining traction. Mainly because IEOs allow crypto projects to perform crypto funding without reluctance from the law/regulators.
<h2>Initial Exchange Offerings  vs ICOs</h2>
Contrary to an Initial Coin Offerings an IEO; is run on the crypto exchange platform on behalf of a startup that  is raising funds. While conducting the IEO, token issuers  pay a listing fee; plus a given agreed percentage of the total tokens sold through the IEO. Eventually, at the end of the IEO, the exchange  lists tokens and sells them for the crypto issuers.Token issuers allow a percentage of total tokens to the exchange to incentive the exchange to help with the token issuers marketing operations. 

IEOs rose to fame after the launch of <a href="https://launchpad.binance.com/">Binance Launchpad</a> in late 2018.There have been more than 50 IEOs running since 2019, which as per ICObench have raised up to $159 million. The main role of IEOs is to promote legitimacy in the crowdfunding space for crypto projects. Mainly given the high number of ICO scams that became prevalent during the crypto bubble. A scam project raising projects through an IEO places an exchange’s credibility at stake. Hence, the exchange subjects token issuers to a thorough vetting process. Contrary to a <a href="https://www.cryptoknowmics.com/crypto/icos-vs-stos/">Sales Token Offerings (STOs)</a>, Exchange offerings are more accessible to any person that is willing to participate as long as their register with the exchange platform. The IEO is also beneficial to the token issuers as they are not likely to suffer regulatory repercussions due to a profound vetting process. 
<h2>Pros and Cons of IEOs</h2>
<h2>Pros</h2>
<ul>
 	<li style="font-weight: 400">Increased Investor Confidence</li>
 	<li style="font-weight: 400">Seamless process</li>
 	<li style="font-weight: 400">Guaranteed Exchange listing</li>
 	<li style="font-weight: 400">Elimination of Scams</li>
 	<li style="font-weight: 400">Beneficial to both the token issuers and the exchange</li>
</ul>
<h2>Cons</h2>
<ul>
 	<li style="font-weight: 400">Bots</li>
 	<li style="font-weight: 400">Limited number of investors</li>
 	<li style="font-weight: 400">Market manipulation and coin concentration</li>
 	<li style="font-weight: 400">Strict compliance regulatory practices</li>
</ul>

Demystifying Crypto Terms: Initial Exchange Offerings

An Initial Exchange Offering (IEO) is a sales campaign organised by a crypto exchange to auction tokens. Several IEOs could take place in several exchanges.

Richard is a versatile fintech analyst with a deep understanding of blockchain domains. As much as technology fascinates him, he finds the intersection of both technology and finance mind-blowing. The firm belief that fintech will drive the future has brought him to the crossroads of Fintech discoveries and transmission of immutable data to a wider audience.

Demystifying Crypto Terms: Initial Exchange Offerings

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