Initial Exchange Offering and Binance Launchpad. - Crypto Academy / S5W6 - Homework post for nane15.
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Good day everyone, having gone through the lecture on Initial Exchange Offering and Binance Launchpad by professor @nane15 for the steemit cryptoacademy season 5 week, I will be answering the following questions.
1 Explain in your own words what an IEO is
INTRODUCTION
Cryptocurrencies or crypto as they are sometimes called are used as digital cash for making transactions and trade. And of course just as a lot of paper money have different monetary value the same can be said with regards to cryptocurrencies.
Imagine creating your own cryptocurrencies, you need intended investors to buy into the idea it is valuable or will be of value. But initially the developers will be needing funding for this project.
With so many cryptocurrencies existing today, developers one require looking for funds to run the project. Hence the need to find other alternatives of raising it.
One of such solutions is the IEO otherwise known as Initial Exchange Offering. Just as the name suggests the IEO is a kind of pre-sale of the tokens to users who are willing to invest in it before it enters the market. By using an exchange platform they have access to users who also take advantage of investing before it hits the market.
By using exchange platforms such as Binance Launchpad amongst others they are able to get the registered users on the platform to buy the tokens with the hope that it will be of value once it gets listed for open trading.
The owners put their tokens up for sale at cheaper prices and investors taking advantage of such a possible profitable investment to make fast profits after pre-sale.
2 Do you consider IEOs an advantageous way to make investment?
Yes I believe it is and I will be explaining why i believe so.
IEOs have come to become one of the most favored means of raising funds. Compared to the ICOs which is the Initial Coin offering which is also a fundraising solution but where the company owning the token does the exchange of the token.
The IEOs are conducted by credible exchange platforms on behalf of other companies. Doing this requires putting the exchange integrity on the line, so before they accept a project rigorous verification is done to ascertain that the project is credible and not fraudulent.
All of this is to protect their customer relations and trust in them. With ICOs it has been prone to mismanagement and fraud over time, making IEOs a better and advantageous option when investing in tokens on pre-sale.
A lot is taken into consideration by the Exchange platform before accepting a project. Firstly the exchange makes a check to ascertain that the project is credible, then the project developers are required to put forward what is known as the white paper.
This contains all the details of what the project is about, it's design, why the project is to be started, and what purpose it is to serve.
The exchange also scrutinizes all of this and if if deemed to be credible enough they put it on their platform. By having users who have been registered and verified on Know your customer KYC invest their funds before it is out on the market.
By investing in it the investors also makes the tokens begin to have value. One simple rule for economics and trading is that when demand for something begins to increase, there is usually an increase in the price value.
This becomes a win win situation for both investors and developers as the investors are buying this tokens at a much cheaper price and the Exchanges will only put up projects with a level of success because they do not want to endanger their customer funds.
With all of the process put in place to safeguard the investors, I believe the IEO is a good investment option because although the exchange do not guarantee you profit they guarantee your money is safe.
3 List advantages and Disadvantages of participating in an IEO?
As with all ventures and projects there will always be the merits associated with them which makes it a wise choice just as there will be disadvantages that you have to be wary of.
ADVANTAGES OF AN IEO
Some of the advantages of participating in an Initial Exchange Offering include the listed
| ADVANTAGE | MEANING |
|---|---|
| TRUST | This is arguably one of the most important factor in any business. By using an exchange to make the pre-sale, you do not need to build customer trust from scratch since the exchange already has customers trading on it. |
| SAFETY | IEOs over time have been established to be a lot safer because only projects which have been verified as credible will be allowed on the exchange helping to remove possiblity of fraudulent or malicious purposes. |
| PROFIT ORIENTED | The sole aim of investing in IEOs is to make profit and by buying at a much cheaper rate, once successful investors will make profit. Besides IEOs have been known to have good probability of profit. |
| LISTING | As exchanges will only accept projects which guarantee their customers fund security, it is easy for this tokens to get listed after a successful presale. |
| SEARCH | Fundraising for any form of project can be quite hard. Using the IEO solves the problem of investor search. |
DISADVANTAGES OF AN IEO
As mentioned earlier, since we have advantages for a project there are also likely to be problems encountered. Some of the Disadvantages of partaking in an IEO include
| DISADVANTAGE | MEANING |
|---|---|
| SUCCESS | Although a lot is taken into consideration for an IEO to take place there is no guarantee of project success even if probability of profit looks good. |
| GUARANTEE | Even after performing extensive checks, no verification can be said to be perfectly safe. So there will always be the risk that malicious developers have made it through the verification. |
| REQUIREMENTS | The exchange platforms want to protect their customer trust which leads to very stringent requirements that might discourage honest project owners. |
| COST | Exchange platforms are profit oriented, so there might be problem of payment for the IEO service rendered if the cost is too high. |
4 Explain how to participate in an IEO, explore various exchanges. Choose one of them and explain the process.
Participating in an Initial Exchange Offering is very easy, so long as the investor is aware of the requirements of the intended project they are investing in.
Although the exchange platforms are guaranteeing a level of safety by putting up these projects on their platform. As an intending investor you get a level of trust it when you know some of the details regarding the project, so it is advisable to do your research.
There are lots of IEOs in place and different exchanges which offer these services, a look at the site coincodex.com gives us a start.
Participating in an IEO
I will be explaining how to participate in an IEO with these easy steps
STEP 1
On my device, I made a visit to the coincodex website using the link coincodex.com
STEP 2
Upon entering the website, the homepage we see a list of IEOs available on different exchanges with the names, date and stage
STEP 3
Using the Coincodex website I explored a number of IEOs available using different exchanges
| Exchange | IEO list |
|---|---|
| Huobi Global |  Coincodex Source |
| Bittrex |  Coincodex Source |
| Kucoin |  Coincodex Source |
| OKEx |  Coincodex Source |
We can find information on IEO name, the date and the stage on Huobi, Bittrex, Kucoin and Okex Exchanges listed above.
STEP 4
For this process I will be choosing the Huobi Global exchange
So I clicked on the first IEO project which is the RIFI Rikkei Finance.
STEP 5
Upon clicking RIFI Rikkei Finance i scrolled down and clicked on visit Launchpad.
Clicking Launchpad redirected me to the Huobi Exchange website
STEP 6
I proceeded to perform registration and after I input the required details.
I was sent a verification code on my email containing some numbers which was used to complete the registration.
The steps above show that I have successfully completed my registration
All images are sourced from the Coincodex website and Huobi Exchange website.
5 As an example of a project that had a successful IEO, explain that project. Be on topic.
Using the first IEO on the image gotten from the Huobi IEO list on Coincodex website I will be using the RIFI token of Rikkei Finance.
Rikkei Finance is a Vietnamese metaverse based defi project with token RIFI.
it's aim is to create a system that serves as a platform for easy and safe lending. Achievable by reducing the rates on its interests which makes it appealing to more borrowers.
This is possible through its application of what is called a cross chain integration, which enables it to allow tokens form any Blockchain network.
This project has received funding from notable names in the industry like Signum capital, Inclusion capital, Kyber network just to mention a few.
It reached an all time high of $1.80 on December 7 of the 2021 and it's all time low was on 21 december 2021 with price at $0.321791.
The market statistics of RIFI is listed below
| INFORMATION | STATISTICS |
|---|---|
| PRESENT PRICE | $0.360491 |
| ALL TIME LOW | $0.321791 |
| ALL TIME HIGH | $1.8 |
| 24 HOUR LOW | $0.321791 |
| 24 HOUR HIGH | 0.370797 |
| 7 DAYS LOW | 0.321791 |
| 7 DAYS HIGH | 0.646548 |
| TRADING VOLUME | $3780210 |
The total supply of RIFI is currently unknown
CONCLUSION
Funding for any project can be a major setback that discourages many brilliant startups.
By using the Initial Exchange Offering, developers are able to solve this problem and for the investors even if the main aim is to make profit, by investing they are also paving the way for more advancement in Blockchain technology.
The initial Exchange Offering has proved itself over time as a system that can be trusted, and if successful can become a win win situation on all three parts. Raising funds by the project owners, Profit making by the exchange, Profit and fund security for the investors.
I enjoyed working on this topic and I look forward to your review professor @nane15.