Initial Exchange Offering is carried out on the platform of a cryptocurrency exchange. In this mechanism, a crypto exchange functions as a counterparty and seeks to raise capital on behalf of startups/fundraisers. It depends upon users/contributors to purchase the tokens by creating an account on the Exchange platform. The project team needs to meet and comply with the exchange’s platform essential to initiate token sales. In Initial Exchange Offering, all the responsibilities are handled by the exchange platform, bringing more trust to the ecosystem. That is the reason why it is gaining a lot of traction among startups looking to raise capital with crypto tokens.
How does it differ from ICO?
Initial Exchange Offering is an agreement between fundraising companies and exchanges after minting tokens by listing them on the exchanges precisely. Whereas in ICO’s, the listing of tokens in the crypto exchanges takes place as a Split. The token issuers have to pay a listing cost and commission on the token sales to the exchanges.
All companies/startups, in every stage of fundraising, can opt for an Initial Exchange Offering business. There is a growing trend of companies caring for Initial Exchange Offering over Initial Coin Offering because of its shorter time to raise funds with the help of Exchanges. The main challenge for the entrepreneur is the choice of crypto exchanges.
Benefits of Initial Exchange Offering
* Fundraising Environment
* Fast preparation process
* Easy way to enter new markets
* Exchange handles the KYC/AML process
* Exchange's network takes part in the marketing strategy
* A substantial number of new token-holders
* Fast and free listing after the token sale and start of the trades
* Reliability of Token Issuers
We have discussed pretty much every benefit of Initial Exchange Offering (IEO). If you want to raise funds using IEO, you will require a team of expert blockchain developers. Also, you may have to work on the technical part and the business part. You can hire a trustworthy IEO development company. Out of the many companies in the market, a Blockchain development company got my attention. Zab Technologies, a prominent IEO Development company that offers the best end to end IEO development services.
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