Initial Exchange Offering is a new generation fund-raising method managed by a crypto exchange with a token project. The token regulator is usually the initiative that creates crypto-token as an asset to collect the capital required to develop its project. The token project normally has to pay a list fee depending on the crypto exchange and the percentage of tokens sold. Instead, IEO and the crypto exchanges not only sell new tokens, but also list token on the stock exchange after the end of the fundraising event. More importantly, the stock market plays a role in the active marketing of tokens as it takes a certain percentage of the token sold. Therefore, with IEO, both stock market and projects work together to achieve more efficiency.
Why IEO is More Popular?
Given the reputation risk, the crypto exchanges have to investigate the quality of tokens and services. As a result, the IEO exchanges develop a nominal relationship with token customers, while fulfilling their rigorous investment in traditional traders. Given the increase in the number of frauds in the world of ICO, this system is a great advantage for those who want to invest in real projects. There are some advantages in the stock markets that successfully complete the IEO process. This advantage is the access to new and potentially private markets depending on the stock market volume. Crypto exchanges are in competition with the user experience (UX) and user interface (UI), unless there is a liquidity problem. For example, the Binance application is easy to download and offers an accessible trade opportunity thanks to its easy interface. However, the number of existing stock markets, liquidity and access to markets, which offer extraordinary experiences in web applications and high-end mobile devices in Korea, has become central to the competitive targets of the newly established exchanges.