The origin of cryptocurrency revolutionized payment transactions through digital assets. The popularity of Bitcoin fueled the creation of more than 10,000 cryptocurrencies in the past decade and only more are being developed. Emerging blockchain technology transforms the real world into the digital world. Innovation in the crypto niche also marked a significant history when the total value of decentralized finance (DeFi) locked over $88 billion in May 2021. The crypto market witnessed an enormously bullish trend where alone Bitcoin’s market cap surged to over $1.10 trillion – exceeding the GDP of Mexico that stood around $1.09 trillion in 2021.
Similarly, fundraising through digital coins and tokens geared up investment in the crypto world. It was initially evident in the initial coin offering (ICO) boom in 2017, but every 4 out of 5 ICO were reported scams. Naturally, people were weary of putting their money into projects that might not reward their investment. As a result, token sales through ICOs are being largely replaced by Initial Exchange Offerings (IEOs).
Before we carry on, let’s take a look at the difference between the two:
What is an IEO?
An IEO is one of the most popular methods of token sales to raise funds for a new crypto project. It is supervised through cryptocurrency exchanges and has credibility from the platform.
What is an ICO?
ICOs are a means of fundraising when a crypto startup attempts to generate crowdfunding for their project on its own website – without the backing of another platform like an exchange.
Why investors prefer IEOs to ICOs?
Investors find that an IEO is more appealing because there is the credibility in the crypto exchange. Any blockchain project needs to go through vetting processes before the exchange backs it. Since it is required that both the platform and the project need to follow KYC & AML measures, screening, marketing, and direct selling tokens to the customers, the risk of scams are reduced.
Let’s explore some of the biggest IEOs of 2021 that managed to quickly raise millions of dollars through crypto exchanges.
Coti is recognized as the first blockchain platform that empowers organizations to build their payment solutions and to optimize decentralized payments. Coti app has already connected to 5000 merchants with more than 80,000 users.
The project is Gibraltar-based, it has generated a $15 million fund. The IEO launchpad is KuCoin where it launched on June 04 2019 and the IEO is active for a unique enterprise-grade fintech platform.
QTC is a blockchain banking UK-based FinTech Company that launched Quantacoin cryptocurrency of its project through Latoken, IEO platform.
The QTC IEO fundraising campaign started on 15 Jan 2021 and lasted until 30 April 2021. In the time, it successfully raised capital of over $1.8 million. The goal of the project is to accelerate the cryptocurrency adaptation and bringing crypto financial services and digital banking to the unbanked & unserved population. At the time of writing, the price of 1 QTCT is equivalent to 44 USD. It is reshaping the future of the financial world for 2 billion unbanked populations.
BitBook is a social travel platform that allows people to earn the token by creating and sharing travel content. It’s a great way to earn passively by content creation. The mission of the project is to create a self-sustainable digital economy where every individual benefits. The private token sale of BitBook raised $607,143. The IEO launched through Binance Chain. It was initiated on 31st May 2021 and closed on 4th June 2021.
The project is similar to the Steemit project that rewards native tokens to content creators and influencers but with a focus on the travel industry.
2local (L2C) is a loyalty-building blockchain project that works on the fundamental of cashback to its users who use the 2 local coins. The users get rewarded for the profit that arises from 2local yield farming and staking pools.
2local encourages companies to connect to build sustainable growth and incentivize users who buy goods from 2local connected companies with a cashback reward once a month. The company successfully raised $850,000. ExMarkets and ChainX conducted an IEO to generate capital funding for the project for the period from December 01 2020 until May 16, 2021.
OBORTECH is a smart logistics hub – a fully digital and multi-winner decentralized ecosystem for the supply chain. It combines the Internet of Things (IoT) with blockchain to revolutionize logistics systems.
Probit conducted crowdfunding of the project belongs to Estonia and Mongolia. The IEO raised $240,000 in March 2021. Orbotech ensures transparency on product traceability and provenance, increases operational efficiency, fast trade and better risk analysis.
Conclusion: The benefits of an IEO
The major benefit of IEOs is transparency and trust. Cryptocurrency exchanges take due diligence to examine the project, unfold unique selling points, ensure tech security, assess the demand for the project and give a green signal to launch in the crypto space with more legitimacy.