Initial Exchange Offering and Binance Launchpad - Crypto Academy / S5W6 - Homework post for @nane15
Greetings to everyone here. It is a great privilege to take part in this week’s tasks. I’m here to present my submission on the homework task by professor @nane15. This week’s homework task is basically on Initial Exchange Offering (IEO). I will be explaining into deep what an ICO is and the respective questions that follows.
Question 1
An IEO is the simple form of Initial Exchange Offering. Many investors in the crypto market refers to an Initial Exchange Offering (IEO) as an Initial Coin Offering (ICOs) evolution. An IEO is one of the investment strategies that has gotten more attention of the world with regards to cryptocurremcies, it seeks to be a more safer substitute for the popular known Initial Coin Offering (ICO) and also give a path that leads the way to the financing of projects on blockchain networks in the crypto world. An IEO as a medium for gathering funds also carry out some duties like the sharing of new crypto tokens to the public. This process can only take place after the developers team agrees to be partners with an exchange platform which will help in assisting the sale and sharing of the token.
Looking at the explanation of an IEO it is very similar to that of ICO, and the truth is that it’s. In fact, these two projects have the same objective, the only thing that differentiates them are the forms. This is because in general IEOs are submitted through exchange platforms who recognize the study and endorse the project. Again, the exchanges are in full control of gathering funds for the industry that seeks to innovate the the project. With this situation, a certain assurance is given that the project gets a technical viability and also granting a clear trustworthy face.
A lot of investors dealing with the crypto market now sees the IEO projects to be more engaging as a result of the significant level of quickness than the ICO projects. Let’s consider this example, Binance exchange platform is one of the best trading platforms that wants to give out innovation and bring IEOs to the crypto world. It has assisted more blockchain projects to gather funds since it was launched.
Question 2
In my opinion I will say yes I have considered an IEO an advantageous way of making investment. This is because with an IEO an investor can easily purchase from presale at affordable price before the project will be launched. The market volume of a token is increased when presales take place. This is because when there is a huge purchase of a project on presale it increases the value of the project.
Again, with how the exchange platforms works, they always want to maintain their reputation by making adequate research and analyzing a project before listing it. With this investors will have the courage to invest in the project without any doubt or fear. This in tend makes an IEO a safe project for investing.
Finally, an IEO utility has a very high profit possibilities. Most important exchange platforms has numerous number of projects they have listed on their site and these projects usually get support and tend out to have good prices at the end of the IEO. This also generates more profits to investors who invest in this project and also to the development team.
Queation 3
Regardless of the IEOs being a perfect substitute for the ICOs and being recognized by the whole world, it still have some challenges as well as merits that investors go through. I will be explaining some of the merits and demerits in this question.
• Unlike an ICO, IEOs are seen to be more friendly for investors, hence they don’t find it difficult in using it to make profit.
• IEO projects are well known for their effective functioning. An IEO provides support and advertisement of projects which gives the project a good productivity and value.
• Again, IEOs has the potential to be listed in an exchange platform when it is fully launched l. It is the exchange platform that assists the project when it is at the presale level. This in tend give investors more confidence and trust in purchasing the project without any doubt.
• Since IEOs has more support from exchange platforms, it has a higher profit potential after the project is been presented to the face of its users. This is highly profitable to an investor as upon presales the volume of the project rises and hence give value to the project. With this investors will generate good profit even when the project is launched completely and now listed in the market.
• With the rapid growth and popularity of IEOs, some exchange platforms may feel reluctant to do serious background research about the project team before listing the project on their site. This can cause investors to lose some of their funds when they invest in an untrusted project.
• There is no assurance in the crypto market that any IEOs project will flourish after presale. Since it is about cryptocurremcies it may have a small increment after it is finally launched and it can also have a huge fall as well, nothing is guaranteed. The market volatility maybe very high at the presale level which makes price of the project to rise at a very good rate and can fall hugely in the next minute again making investors to lose much of their funds invested in that particular project.
• Before an exchange platform will list the project of an IEO, the development team have to pay an amount of money to the exchange as fees for linking with them. This maybe a difficult situation for the development team if they don’t have enough funds to do so and they will end up giving out some of the project as fees to the exchange platform.
Question 4
To participate in an IEO, you first have to choose your desired exchange platform only if there’s an active IEOs partnering with the exchange platform you want. For a better and productive market it is advisable to make a background research on the developers and the current market structure in order to be on a safer side. Some investors usually don’t want to go through this research thing due to time wasting but it is equally important so far as investment is concerned.
After you are done with your research and now want to proceed with the project on the Launchpad, you will have to make sure you have all the necessary requirements needed to participate in it and this requirements has to go with the exchange platform supporting the presale. If all these requirements are met, you can now go ahead and register and start participating by purchasing the project with the needed presale coin needed by the exchange platform. In most cases the primary coin of the exchange platform is used but you first have to purchase it before you can use it.
Understanding what you are doing is very necessary and it will be advisable to start with an amount of money you would not be afraid to lose, this will be good for your own financial management. It is not a must that you will lose but it is advisable to purchase the project with the amount you are willing to invest in the system.
With respect to this question I have gone through three different types of exchange platforms and their active IEOs. Below are the screenshots;
From the above screenshots we can clearly see that I have listed out three different exchange platforms and their corresponding active IEOs. The names of the exchange platforms are those i have demarcated in red boxes. Those in the black boxes are the respective names of IEOs and their presale dates.
Now, to register for an IEO you need to possess an account on the exchange you want to use and the exchange platform should have active IEOs which they support. I have created an account with the Kucoin Spotlight exchange platform, which will now make me eligible to participate in any presale on the exchange. Below are the steps I followed in doing so.
Step 1. I visited the homepage of coincodex using the link (https://coincodex.com/)
Step 2. I then click on the menu button to find IEO platforms and select the Kucoin exchange.
Step 3. After selecting the Kucoin exchange, I was now sent to the homepage of Kucoin exchange. I then select the menu button and click on sign up.
Step 4. I was now asked to key in my details which I did and had a confirmation message through the email address I kept there. I then key in the confirmation code and my Kucoin account was successful.
After my account has been created and verified, I can now go ahead with my trading. Here it is now my own choice to decide which IEO project to deal with.
In the below screenshot, we can see a list of IEO projects from Kucoin exchange and with respect to your thorough research and knowledge about any of them, you can now select your desired IEO project from the list provided and continue with your trading.
Question 5
Here I will be talking about one of the well known IEOs which the BitTorrent. The BitTorrent project is owned by Tron and its primary objective is based on file sharing. It is a communication agreement for peer to peer file transfer which gives users the chance to share data and electronic files in a decentralized way.
Initially, BitTorrent was valued at $0.00012 at the IEO and currently has a price tag of $0.0027 at the time of doing this task. From the below screenshots, we will see more details about BitTorrent project.
The Tron industry did massively well for purchasing it. The BitTorrent network executed so many units in its functionings. It has a native cryptocurrency, BTT and works for the Tron blockchain system.
In the early 2019, two operations came up where the sales were exhausted immediately this IEO project was launched. Users at that time could get this token after it was accomplished with the BNB tokens. Again, it was carried out with TRX token.
Looking at the current state of BitTorrent, it has a Market Cap of $2.672 Bn and ranked 55th in the crypto market. This information is from coinmarketcap. Below is a screenshot to back the statement.
In short, IEOs are really the perfect substitute for ICOs. They are the best way as it stands to introduce new cryptocurrency projects. With the help of exchange platforms IEOs are now taking the attention of the world and the exchange platforms are very necessary in bringing out IEOs.
My best regards goes to professor @nane15 for giving us this educative lecture. Indeed I have really learn a lot from this lecture and I will be hoping to take part in your coming lectures.
Thank You!!