What is an Initial Exchange Offering and How Does it Apply to Cryptocurrency - Merkeleon

What is an Initial Exchange Offering and How Does it Apply to Cryptocurrency

By |June 27th, 2019
What is an Initial Exchange Offering and How Does it Apply to Cryptocurrency

Most cryptocurrencies rely on two methods of distribution: an initial coin offering, or ICO, and an initial exchange offering, or IEO. ICOs are open to the public and can theoretically mean more profit to the project team, but is also prone to fraud and scams. For that reason, many cryptocurrency projects now opt for initial exchange offerings, which allows for more protection from fraudulent activity. Read on to fully understand how an ICO initial coin offering differs from an IEO initial exchange offering and why that difference is important.

What is an IEO?

So what is IEO? The biggest difference between an ICO and an IEO is that the latter is not open to the public and uses a controlled account. Anybody wanting to purchase a cryptocurrency coin through an exchange needs to first look at an initial exchange offering list and sign up for an account with that exchange. An ICO purchase involves one party buying a token by sending money to a specific address, while an initial exchange offering in 2019 has all transactions running through a secure online system. The current most popular location for an initial exchange offering is Binance, which topped the world in trading volume as of early 2018. Those interested in IEOs should register an account and keep a close eye on upcoming initial exchange offerings.

Comparing IEO and ICO

Despite the value of an IEO exchange, the ICO model has served people well in the past. So why is the landscape now shifting toward an IEO list instead of continuing with ICO? If everybody remains honest, an ICO is the superior model. Unfortunately, you can’t always trust strangers to keep their word. The past years have seen many scammers offer fund for a crypto coin without paying or, on the other side of things, offer a coin and make off with somebody’s money. The IEO crypto model makes sure that this doesn’t happen—when you use a site on the crypto IEO list, you guarantee that your payment will be delivered as you receive the cryptocurrency. This scam protection serves as the biggest benefit when comparing IEO vs. ICO.

Other Rules and Regulations

When compared to IEO, ICO is a very unregulated landscape. The agreements between two parties negotiating over an ICO are only between those two individuals, and they often cannot be tracked or handled in court unless both parties provide identification of some sort. On the other hand, IEOs use an administrated and regulated third party that helps to lay out a standard set of rules that everybody can follow. As different countries try to regulate cryptocurrency in the future, this standardization may prove to be a deciding factor between what is legal and what may get crypto purchasers and providers in trouble.

The information above should help you fully understand essential questions such as what is IEO and how does it differ from the ICO model that has been used in the past. You can use this information to profit by providing your own IEO services, as current leading exchanges often come with listing fees that are paid to exchange operators, starting at €50,000 plus 10-20% from raised money. If you are interested, get in touch with us and we’ll help you launch your own IEO company within 10 days!

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