Even at the peak of the bull market in December 2017 Binance launched the first ever Exchange Initial Offering (IEO). Find out what it is, and what it takes to run IEO.
Even at the peak of the bull market in December 2017 Binance launched the first ever Exchange Initial Offering (IEO), which forever changed the landscape of crowdfunding. Now all those involved in cryptocurrency, probably heard about IEO.
IEO – initial exchange of proposals. Under this mechanism implies the attraction of investments through exchanges.
These tokens proved to be effective for all three participants in this process: projects, traders and of course the exchanges themselves. Despite the fact that the first IEO appeared in the year 2017 (project IEO GIFTO spent on the platform Binance), this method of attracting investment has attracted serious attention only in the beginning of 2019. The key role played by trading platform Binance Exchange, which has a special platform for the sales of tokens – Binance Launchpad.
Why IEO as effective
Right now the growing popularity of IEO is comparable to the excitement around the ICO in 2017. Projects that may qualify for IEO is likely to quickly and easily collect money. A key factor of the effectiveness of the IEO is that selling tokens through the stock exchange significantly facilitates participation in the process of ordinary users.
In addition, the exchange will guarantee the success of the project that they support. At IEO has the advantage of guaranteeing immediate liquidity for any coin or token which it supports, as assets likely to be added to the marketplace.
March 2019 was a productive month for leading kryptomere. None of the sites did not want to miss the opportunity to enter promising IEO market. The exchange had hoped to provide its customers with additional opportunities to raise funds for projects and also increase the liquidity of the coins of start-UPS.
Factors of the launch of IEO
IEO provides an attractive alternative to the traditional ICO for any startup from the blockchain industry. There are five factors that are crucial for projects that expect to run IEO.
1. A progressive business model.
The reality is that many of the mechanisms of raising capital can’t boast of investment from knowledgeable players. If exchange can’t see a clear path of development of the project, it will not be to engage them for fear of a negative reaction of the crypto community. So to start IEO business model must be clear and progressive.
2. Currently exists or is being developed the working draft.
Looking back at IEO-experience Binance, we can say that the vast majority of projects before the IEO was the experience of raising funds; their products were nearing completion. For example, the BitTorrent before IEO already had one hundred millionth user base, and startup Bread could boast of having a functional and well designed app.
3. Minimum viable product or prototype.
In the crypto industry at present, nobody believes in the ideas and concepts that are in no way confirmed. A prototype of the product required for the project; he will tell investors much more than the text in the white paper.
4. White paper project and Takenaka.
As a rule, white paper created by the founders of the project. Important professional approach to the creation of the document, which should include tokeneke (business guide on the use), the project financial model, use cases, benefits and usefulness of the new product/technologies, evaluation of competitors, description of the existing partners and the team.
5. Legal opinion.
Each exchange can have their own certain requirements as to the legal conclusion. You must discuss such issues directly with a trading platform or a trusted law firm.
The more detailed the prepared project, the better the greater the cooperation agreement with the exchange. Therefore the necessary marketing.
The social media marketing will help step by step to reveal the essence of the project, the role of the team, developing technical solutions and product. It is important to communicate with community members and to respond promptly to the questions of potential participants.
Competent PR needs to control the placement of information on the prospects and benefits of the project. Experts
miningu.EN is recommended to publication in well-known media, where the project can generate interest and to find followers.
It is important to attract users with thematic platforms and create excitement around the project at various forums, such as chat Telegram, themes, Reddit, etc. Work with these platforms gives good results from the point of view of growth of the user base for the project.
IEO actively develops and replaces the ICO. A huge number of stock exchanges prepare their solutions and rely on this method of attracting investment for projects. At IEO has its pros and cons. Like any business model, showing outstanding results in the beginning, IEO sooner or later will also decline. However, building a relationship with their users based on the trust and openness of the exchange will actively and successfully use these tools to attract Finance.