An IEO (Initial Exchange offering) is still technically a form of ICO , but the main difference lies in where the coin or token is offered. As you might guess from the name, an IEO offers tokens through a partner exchange, not directly to investors. You don’t give money to developers, but a crypto exchange that works with them, and in return, you get them from the crypto exchange platform, instead of the project team directly giving you some tokens.
Since the token sale is done on the exchange platform, token providers must pay a listing fee along with a percentage of the tokens sold during the IEO. In turn, crypto startups sell tokens on exchange platforms and list the coins after the IEO is over. Since the cryptocurrency exchange receives a percentage of the tokens sold by the startup, the exchange is encouraged to assist the token issuer’s marketing processes.
What are the IEO Advantages?
One of its biggest advantages is trust. The audience scans every project that wants to launch an IEO on the counterparty website while being run on a cryptocurrency exchange platform. Exchanges do this to maintain their good reputation by carefully scrutinizing token issuers.
Because of this, IEOs can save scams and dubious projects from raising funds via cryptocurrency exchange platforms, making it much harder to scam with IEOs.
In some cases, buying into an IEO may actually be easier than an ICO . Instead of going through the specific steps of each ICO, you just have to follow the standard procedure to buy and store tokens from the given exchange. In many ways, it standardizes the process from offer to offer, as the exchange sets the terms of purchase.
WHAT ARE THE DIFFERENCES BETWEEN ICO and IEO?
-ICO acts as the website of token issuers, while IEO is an exchange platform.
-ICO may vary between different projects. IEO guides the users of the stock market according to AML (Risk Management) and KYC (Customer Recognition).
-Personal sales are provided by the developers in the project in ICO, while in IEO these transactions can only be provided through cryptocurrency exchanges.
-ICO has to raise money by attracting the attention of users through high projects to meet the market needs of companies. IEO, on the other hand, can only earn directly through stock exchange sites.
-For personal post-sale token listing, the ICO must reach the exchange itself; IEO can be accessed from any exchange site where it is listed.