The term IEO means the first time a cryptocurrency is introduced to its users on an exchange platform. Created with the initials of the words in the English phrase “Initial Exchange Offering“, IEO is a very popular term in the cryptocurrency space Cryptocurrencies of projects that have not met their users before are listed on exchanges and put into use. IEOs, which came to the agenda as ICOs gradually lost their popularity, are implemented by many exchanges today. We can consider IEOs as a kind of fundraising method. Throughout this content, we will talk about IEOs and their place in the cryptocurrency market.
Cryptocurrencies have been pioneered by Bitcoin (BTC) and have hosted many innovations along the way. Thanks to Bitcoin’s open-source nature, developers have taken advantage of this technology to bring new projects to life. The emergence of new projects is not always as easy as it seems. Project teams that want to achieve their goals need a certain amount of capital and funding for this. With the emergence of an innovative way to obtain these funds, the problem has given a new impetus to the development of the market. The new method was called initial coin offerings, or ICOs. While the term IEO had never been mentioned before, ICOs made a big impact on the cryptocurrency market. Especially in 2017, the ICO craze, which made a splash, paved the way for the market to break record after record in those years. It is not difficult to remember that there was a completely different excitement in the cryptocurrency community in those years.
We have sadly witnessed some negative situations related to ICO activities. Malicious people who organized fake ICO events by deceiving users sometimes made profits up to millions of dollars. Users were victimized. With the proliferation of such events, trust in ICOs was damaged. There was also a natural correction movement in those years with the over-inflation of the market. As a result of all this, ICOs lost their former popularity. At this point, a new fundraising method came to the agenda to gain people’s trust: IEO.
When did IEO come out?
Initial Exchange Offering (IEO) emerged as an alternative fundraising method. This new method, which came to the agenda in the years when ICOs were outdated, was successful in gaining the trust of users. The need to raise investment in the cryptocurrency market, which was constantly witnessing new projects, was not decreasing. This situation caused IEOs to be in great demand. The first IEO in the cryptocurrency market was realized by the Binance exchange in January 2019. Binance, one of the world’s largest cryptocurrency exchanges, supports the ecosystem in a multifaceted way, not just through trading. Bringing IEOs to the ecosystem also proves this. The first IEO of the Binance platform was realized with the sale of Bittorrent Token (BTT). The project managed to raise $7.1 million in just 18 minutes. This result was a sign of the future of IEOs. A week after the sale, BTTs were listed on the Binance exchange. As a result of this popularity, the price of BTTs increased 8 times.
The first IEO organized by the Binance exchange made a big impact on the cryptocurrency market. After the Binance platform, other cryptocurrency exchanges immediately started working on organizing similar events. As a result, IEOs have managed to reach the place they have in the market today. By providing such services, exchange platforms support entrepreneurs who want to develop new projects. This contributes to the development of the cryptocurrency ecosystem. New users also step into the cryptocurrency market by trusting exchanges more easily than ICOs.
How Does IEO Work?
IEOs on its IEOs are known as a fundraising method of great importance in the market today. IEOs, which have a preventive effect on fraudulent activities, are offered to users after following certain criteria. Thus, it becomes almost impossible for malicious people to take users’ funds and disappear into thin air. Exchanges provide certain checks before allowing a sale on their platforms. Digital currency that successfully passes all these checks can be included in the exchanges’ token launch platform. Metaverse platforms also works like this. If you need help to get a metaverse consulting service, you may think to visit metaversa.
Before giving the green light to a blockchain project, exchanges scrutinize its technical data in detail. These documents, known as “whitepapers” in the community, are introductory documents that explain everything about the project in detail. We try to help you by utilizing these documents when preparing content about a project. Exchanges also attach great importance to these documents and evaluate projects with them. Before allowing IEO activity on its platform, an exchange platform also carefully examines the team of that project.
Projects that fulfill all the requirements mentioned in this section can proceed to the next step. In this step, exchanges require project owners to fulfill anti-money laundering (AML) and know-your-customer (KYC) procedures. Projects that fulfill the full transparency criteria can carry out IEO. This prevents security issues and is in line with the basic logic of blockchain technology.
How to Participate in IEO Sales?
Many exchange platforms in the cryptocurrency market organize various IEO events. Users can use this investment tool by following certain conditions. The Binance Launchpad platform is known as the platform where IEO projects are brought together with users. A total of 48 projects were realized on this platform in August 2021. A total of over 98 million dollars in funding was obtained from these projects. It is also stated that the users participating in these IEO events are around 1.8 million. In the light of this data, it seems possible to comment on where IEO studies have reached.
Cryptocurrency lovers can participate in IEO events by doing their research carefully and not taking too big risks. Hearsay or advice from non-experts can often yield negative results. Therefore, investors need to take their own responsibilities carefully when it comes to which exchange or project to choose. As it is known, the cryptocurrency market stands out as an ecosystem that can involve great risks.
Binance is a centralized exchange. If you want to join an IEO sales, you may think to use a decentralized finance platform such as Venice Swap. Venice Swap also have a launchpad. Use this link to get into it.