What is an Initial Exchange Offering?

If you’re new to the ecosystem, Initial exchange offering, IEO for short, is the evolution of its predecessor, ICO, also known as Initial coin offering. The crypto sphere is an ever-expanding industry, with new projects being introduced to the market every day. We’ve got DApps, new tokens, new protocols, and new altcoins coming out every now and then.

With over 6000 different cryptocurrencies listed across different exchanges, we should note that almost every one of these cryptocurrencies was once a start-up and needed to raise capital to establish their project in the market. Interestingly, both Binance and Ethereum needed to gain capital to establish and introduce their projects to the market.

The way they were able to raise capital was through an ICO. They offered tokens to crowdfund their projects and introduce their idea into the market. However, they’re examples of projects and crowdfunding processes that went right. When comparing what went right to what went wrong, the scale tips towards the latter. Since ICOs are unregulated and often moderated by the startup themselves, they can be highly unprofessional and risky.

Notably, this was at the height of the crypto craze in 2017, when there were over 144 initial coin offerings (ICOs) that were made, but none of them actually reached their crowd sale goals.

This is why evolution was necessary for the ecosystem, and this is where IEOs step in. IEOs are ICOs, but they’re governed by a notable and trustworthy exchange that puts its reputation in line for the project to be established.

A lot of IEOs success can be attributed to Binance’s Launchpad, which was introduced in late 2019. So far, Binance has introduced over 50 projects and raised over $200 million, according to credible sources.

IEOs benefit the ecosystem by producing credible projects. Since IEOs are listing these projects on their platforms, they’re putting their reputation on the line. Exchanges put these projects through strict tests and processes. They check their financials, verify the team’s identities, and provide mentorship or direction to these projects.