Initial Coin Offerings (ICOs) were extremely popular at the end of 2017 and in 2018, but in 2019 another type of fund raising mechanism is prevailing – Initial Exchange Offerings (IEOs). An IEO is essentially an improved version of ICO, as it utilizes cryptocurrency exchanges. The IEO token sale process more secure and half-automated, making it more appealing to investors and projects involved.
The Advantages of an IEO
As already mentioned, the main advantage of IEO is that the token sale is organized by a cryptocurrency exchange, which makes the process more secure, but it also has a few other benefits. On the exchange, there is a much lower risk of users being led to fake websites (phishing) or paying to the wrong address. Furthermore, investors can rely on the exchange to verify the IEOs as they don’t want their reputation to take a hit. Exchanges can also be very helpful with advertising and marketing as they can present their IEOs to their already established user base. Last but not least, the token is immediately listed on the exchange, which is beneficial for everyone involved:
- The project, since they don’t need to pay the high listing fees.
- The users, since they can exchange the token soon after the end of the token sale.
- The exchange, since it increases the liquidity and the fees collected.
Picking the right exchange is of key importance for both investors and start-up companies, therefore we present a list of Top 5 IEO platforms in our opinion.
- Binance Launchpad
The pioneer of IEOs Binance takes the first place on our list of exchanges. The Binance exchange currently dominates the IEO platform market, largely because of its 313,000 daily active users and a wide array of functions and services. Binance also already conducted a few quite successful IEOs, such as Bittorent and Fetch.AI. The Binance Launchpad team promised to add at least one token sale every month. Binance Launchpad relies on a lottery ticket system for users to be eligible to participate in IEO.
- KuCoin Spotlight
KuCoin’s IEO platform is called Spotlight. Token sales on KuCoin are usually conducted via a lottery ticket token sale format. In order to be eligible for lottery tickets, users must successfully complete a know your customer (KYC) process and lock up a certain amount of KuCoin Shares (KCS) for a predetermined time period, usually 12 days. The exchange has already successfully conducted token sales for MultiVAC and Chromia. The COTI IEO is underway at the moment.
- Huobi Prime
Huobi Prime is Huobi’s IEO platform. Instead of the lottery ticket system, Huobi Prime relies on a more straightforward first-come-first-served approach. Nevertheless, users need to hold a certain amount of Huobi’s HT in order to participate in IEOs. Up to now, the exchange hosted 4 IEOs: TOP Network, Newton Project, ThunderCore and Reserve Rights.
Bitmax has already completed IEOs for Dos Network and DUO Network. Investors that want to participate in Bitmax’s IEOs have to pass a KYC process and hold a certain amount of BTMX tokens (10,000 BTMX in case of DUO Network IEO). If you don’t hold BTMX, you can purchase the tokens with USDT and BTC.
Bitforex is another exchange that is launching IEOs, except that they refer to them as “premium token offerings”. The exchange is quite active in terms of the number of IEOs. Up to now, it has hosted 4 IEOs with an additional 4 that have already been scheduled. Usually, the exchange conducts IEOs in multiple rounds, where earlier rounds offer better terms for investors.
If you want to be on top of all ongoing token sales, we suggest you follow CoinCodex’s IEO list.