What Is The Difference Between An IEO and an ICO?

ICO's grew in popularity between 2017 and 2018.

Within a year, through the power of ICO's billions of dollars were raised around the world.

To anyone not familiar, an ICO is the most common method new cryptocurrencies use to raise funding for their projects.

But that's not new information. So, what's new on the block?

IEO's.

You see, during an ICO, the project team responsible for the creation of the cryptocurrency will issue out coins to investors directly as incentives for their investments with the hope that the price goes up and they make a profit.

The fact that the coins are issued directly with no intermediaries between means there's really no oversight and the transactions are not regulated.

This has provided a breeding space for lots of scams and fraudulent projects resulting in gigantic amounts of money lost by investors.

2019 has given rise to the steadily increased use of IEO's in place of ICO's by project teams.

Due to the lagging in the aspect of securing funds from scams in the ICO process investors now tend to be wary of ICO's generally.

What is an IEO. Well, an IEO only shares one distinction from an ICO.

Where in an ICO tokens and coins are issued directly into the wallet of the investors, an IEO sees the currency being issued into an exchange address in place of wallet address for each investor.

Before a coin can be issued through an exchange, it has to be listed on that exchange so investors can buy in.

IEO's automatically provide an environment for oversight that ICO's lack because before any exchange will agree to list a coin they must have done thorough investigations into the project to establish the viability of the currency being offered.

Both activities are still variations of an IPO.

One Achilles heel pertaining to an IEO coin is the fact that whereas ICO coins are available to the general public IEO coins are limited to users on one particular exchange which might limit the sales and adoption rate of the project during early stages.

Also the prerequisite of having an account with a particular exchange before you can invest in certain coins and tokens may end up centralizing the bulk of the currency into the hands of few people.

Aside that the security IEO's offer investors have made them more attractive as investment options.

So let's do a recap.

The main difference between an ICO and IEO lies in the avenue for issuing the currency to investors. ICO's issue directly while IEO's issue through an exchange.

Other than that, an IEO can still be considered as an ICO with an extra layer of security.

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