Initial Exchange Offering and Binance Launchpad - Crypto Academy / S5W6 - Homework post for @nane15
Initial Exchange Offering and Binance Launchpad - Crypto Academy / S5W6 - Homework post for nane15
cover photo made by @sargoon
Hello, Steemit Crypto Academy community! Here I am with my new homework post for Steemit Crypto Academy Beginner courses. In this homework post, I will give you information about Initial Exchange Offering and Binance Launchpad. I would like to start my homework by explaining "What is an IEO?".
Explain in your own words what an IEO is.
Briefly, IEO (initial exchange offering) is the introduction of a newly created cryptocurrency project. When the cryptocurrency project was first created, no one would know about it without IEO because now anyone can easily create ERC-20, TRC-20 tokens.
Cryptocurrency project owners can collect financial support for their projects through cryptocurrency exchanges by announcing their own projects thanks to the IEO.
Thanks to the IEO, the project owners sell their cryptocurrencies that have not yet been released to the users who want and are suitable with the IEO system at very low prices. Thanks to the IEO, the project owners not only collect financial support, but also promote their project to the whole world thanks to the IEO, and increase the demand for their projects.
Exchanges collect in-depth information about the project from the owners of the cryptocurrency project they have agreed for IEO, and before the initial exchange offering starts, everything about the project is shared with the users on the exchange's homepage and social media accounts.
The purpose of this is to inform the users of the exchange about the cryptocurrency project that will be available for pre-sale and, if they like it, to increase their demand for the cryptocurrency project during the IEO.
Doing an IEO is actually a risky business for exchanges because crypto exchanges should be very careful when choosing a crypto project for IEO because if the owners of the project deceive people, users' trust in the exchange will decrease considerably.
Do you consider IEOs an advantageous way to make an investment? Explain.
I think IEOs are definitely a good investment but we still have to be careful. If I'm thinking of investing in an IEO, I first gather information about that cryptocurrency and its project by researching, then I research which exchange(s) support the IEO. Of course, not every IEO is a good investment because IEOs organized by less reliable exchanges can be scam and I can lose all my money, so I invest in IEOs organized by reliable cryptocurrency exchanges.
And yes, we found an IEO to invest in, so what now? First of all, if the project of the cryptocurrency we are going to invest in is promising and the IEO is organized by a reliable cryptocurrency exchange, yes, this IEO will definitely be a profitable investment because the price we buy the cryptocurrency will be very cheap. After buying the cryptocurrency with IEO, as soon as the coin is released to the spot market, users on the exchange will be hyped and immediately trade the coin whose IEO has been completed and listed on the exchange, and will suddenly increase the price.
In this case, I will make a significant profit by participating in the IEO and getting the coin cheap, so if the IEOs of promising projects are organized on reliable exchanges, IEO is definitely a very good investment.
List advantages and disadvantages of participating in an IEO.
Advantages of participating in an IEO
Thanks to IEO, you can buy cryptocurrencies that would normally be listed at an expensive price from the exchange that organizes the IEO at a very cheap price.
If the exchange that organizes the IEO is a reliable exchange, the project is definitely a reliable and promising project because the IEOs organized by the exchanges increase or decrease the reliability of the exchange, therefore, the exchanges choose the projects they will organize IEO very carefully.
Buying an IEO is more profitable than buying coins that have already existed for years because the coin will be offered to the exchange for the first time, so the demand for the coin will increase and the price will rise.
Disadvantages of participating in an IEO
In fact, IEOs have a lot of disadvantages because participating in an IEO can be risky. If the exchange that organizes the IEO is an exchange that does not care about credibility and is frequently hacked, then investing in an IEO can hurt you.
If an exchange does not care about the content of the projects and organizes an IEO for a fraudulent project, it will be very bad for both the people who will invest in the IEO and the stock market.
After the IEO organization is over, when the IEO is publicly listed on the spot market, the price will be very volatile and the participants in the IEO will want to sell their coins. Therefore, if the IEO is not demanded by other users, you may lose your money because of the selling pressure.
Explain how to participate in an IEO, for the process explore various exchanges, choose one of them and explain the process. (Please use from screenshots.) (No need to participate, just register, present proof of verified account and explain the whole process, do not use Binance)
To participate in an IEO, let's first enter Coincodex, where all ongoing or ended IEOs are listed. (Website: https://coincodex.com/ieo-list/). You can access the IEOs organized by the exchanges you want on this website by clicking the "All Launchpads" menu.
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Below are the screenshots of the IEOs ongoing and ended by the exchanges in the Launchpads menu:
Kucoin
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Bittrex
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Huobi
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After that, I selected Kucoin exchange from the launchpad menu and selected the COTI project from the IEO list.
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On this page, there is information about the project of the COTI coin, we need to go to COTI's IEO on the Kucoin exchange by clicking the "Visit Launchpad" button at the bottom right.
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When I click on the "Visit Launchpad" button, a page opens for me to register to the Kucoin exchange, I register for Kucoin by entering the requested information.
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I signed up for Kucoin but haven't verified KYC yet, don't forget to complete your KYC verification to participate in IEOs.
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To access IEOs, click "More" from the menu at the top of the web page and select "Spotlight" from the mini-menu.
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As an example of a project that had a successful IEO, explain that project. Be on topic. (Use from screenshots.)
Chromia made its initial exchange offering on Kucoin Spotlight, Kucoin's IEO platform, in May 2019.1 Chromia (CHR) was valued at $0.05 and was settled on the Kucoin exchange using the IEO lottery method. The total supply of CHR tokens is 1 billion and the hard cap for the public sale is set at $2 million.
Scalability is what the Chromia blockchain project cares about most in the blockchain trilemma. The purpose of Chromia is to keep the security of dApps created on the blockchain at the highest level and to offer high scalability to users.
2.5 years have passed since the Chromia IEO and when we look at the current CHR price and market value, we see that it has increased almost 20x. CHR had made ATH by reaching $1.50 a month ago.
Conclusion
IEOs are a little gift for us from the world of cryptocurrencies. If you find a good cryptocurrency/blockchain project and a reliable exchange that will organize the IEO of that coin, you can make high profits in a short time. By participating in the IEOs of reliable exchanges, you can make money both in the short term and in the long term by buying the coins of promising cryptocurrency projects at very low prices, but the important point here is the exchange that organizes IEO and the cryptocurrency project to be IEO. Exploring these two important points in depth is key here. Best regards to Professor @nane15 for sharing this homework. Thank you so much for reading my Steemit Crypto Academy post! :)