Initial coin offerings haven’t died: they’ve simply rebranded as initial exchange offerings (IEOs). From Huobi to Okex and Bitmax to Bittrex, the number of crypto exchanges hosting token sales has proliferated. In a week where Kucoin has entered the ring with its Spotlight platform, we take a deep dive into IEOs: the good, the bad, and everything in between.
ICO Becomes IEO
IEOs have been a hot topic this year, with the success of Binance Launchpad causing FOMO among traders, elevating the price of BNB to new highs, and spurring other exchanges into devising their own token sale platforms. In less than two months, the crypto space has gone from having one IEO platform to six. Binance Launchpad now faces competition from Bittrex IEO, Bitmax Launchpad, Huobi Prime, Kucoin Spotlight, Bgogo Apollo, OK Jumpstart, Probit Launchpad, and Exmarkets Launchpad.
The integrated exchange and token launch system popularized by Binance offers clear benefits to stakeholders including the following:
Exchanges: Increased trading volume, receive a percentage of tokens issued, and demand for their own native token grows. They may also receive a listing fee from the project whose token they’ll be launching and subsequently adding to their exchange.
Projects: Can tap into large existing investor pool, have their token sale promoted by the exchange, and are guaranteed listing complete with the liquidity this brings.
Investors: Have easy access to new tokens via a platform they are already familiar and verified with. Are incentivized to participate in the knowledge that tokens can likely be flipped for a profit once exchange listed.
It’s not all blue skies and clear waters ahead for IEOs however;