Club5050-Basic Concept Of An Initial Exchange Offering (IEO)

Greetings everyone.

Under normal circumstance investors can buy cryptocurrency when they are initially released through Initial Coin Offering (ICO). But due to the problem that arise during 2017 indicates that some some of the initial coin offerings can not be trusted.

Due to that an initial exchange offering (IEO) gives a more secure option for investors to buy assets with funds through their exchange wallets during the fund raising stage. Our discussion for today is going to be about an Initial Exchange Offering.

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Underatanding What An Initial Exchange Offering (IEO) Is.

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Initial Exchange Offering is an investment strategy that has attracted the attention of many investors around the world. An initial exchange offering has been seen to be a more safer substitute of an initial coin offering and also creates a way to the financing of projects in the blockchain system. An Initial exchange offering is known to be a medium for raising funds but it also perform some duties like distributing of new crypto assets to the general public.

This whole process of assets distribution only takes place when the developers team accepts to be partners with an exchange platform that will assist them in distributing the assets.

Considering the definition of an Initial exchange offering it is almost like that of an initial coin offering and the fact behind this is that it is really the same as an initial coin offering. These two projects works towards the the same goal, the only difference between them is their forms. This is because in general, initial exchange offerings are given through exchange platforms who accepts the study and endorse the project.

This exchange platform has the full control of raising funds for the team that seeks to innovate the project. When such a situation arise, there is this assurance that will be given that the project gets a technical viability and also granting a clear trustworthy face.

A lot of investors in the crypto market now sees the initial exchange offering to be more engaging due to the significant level of quickness than the initial coin offering.

Why Initial Exchange Offerings (IEOs) Are More Advantageous Way Of Making Investments.

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In my own point of view, I think an initial exchange offering will be more advantageous in doing investments. This is because with an initial exchange offering an investor can easily buy a crypto token during presale at affordable price before the project will be launched. The market volume of a token will be increased when presales take place. This is because when there is a more purchase of a project on presale its value increases.

Moreover, with regards to how the exchange platforms works, they always want to keep their reputation by making a thorough research and analyzing a project before listing it on their page. With this, most investors will not be afraid to invest in the project. This in tend makes an initial exchange offering a safe project for investing.

Finally, an initial exchange offering project has a very high profit possibilities. Most essential exchange platforms has several number of projects they have listed on their site and these projects usually get support and tend out to be valuable at the end of the initial exchange offering. This brings out more profits to investors who invest in this project and also to the development team as well.

Advantages And Disadvantages Of Initial Exchange Offering

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Regardless of the initial exchange offerings being a perfect substitute for the initial coin offerings and being recognized by most investors around the world, it still have some challenges as well as advantages that investors go through. I will be listing some of the advantages and disadvantages below:

Advantages

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• Unlike an initial coin offering, initial exchange offerings are seen to be more friendly for investors, hence they don’t find it difficult in using it to make profit.

• Initial exchange offering projects are well known for their effective functioning. An initial exchange offering gives support and advertisement to projects which gives the project a good productivity and value in the market.

• Initial exchange offering has the potential to be listed in an exchange platform when it is fully launched. It is the exchange platform that helps the project when it is at the presale level. This in tend give investors more confidence and trust in buying the project without any doubt or fear.

• Since initial exchange offerings has more support from exchange platforms, it has a higher profit potential after the project is been presented to the face of its users. This is highly profitable to an investor as upon presales the volume of the project increases and hence give value to the project. With this investors will gain good profit even when the project is launched completely and now listed in the market through the exchange platform.

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Disadvantages

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• Before an exchange platform will list a project of an initial exchange offering, the development team have to pay an amount of money to the exchange as fees or charges for linking with them. This maybe a difficult situation for the development team if they don’t have enough funds to do so and they will end up giving out some of the project as fees to the exchange platform.

• With the fast growth and popularity of initial exchange offering, some exchange platforms may feel reluctant to do serious background research about the project before listing the project on their site. This can cause investors to lose some of their funds when they invest in an untrusted project.

• There is no assurance in the crypto market that an initial exchange offering project will excel after presale. Since it is about cryptocurremcies it may have a small increment after it is finally launched and it can also have a huge fall as well, nothing is guaranteed. The market volatility maybe very high at the presale level which makes projects to be more valuable and can fall in the next minute making investors to lose some of their funds invested in that particular project.

Why Blockchain Projects Prefer Initial Exchange Offering (IEO) To Initial Coin Offering (ICO)

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As it is obvious that Initial exchange offerings are basically far more beneficial than initial coin offerings in all aspects, below are some of the reasons why blockchain system prefers Initial exchange offering than initial coin offering:

• In an initial exchange offering, project initiators sometimes benefit a lot from the marketing expertise. This will enable them to reach potential investors easily, and increase the potential for legitimate projects to get the needed funding.

• Some of the investors prefer to buy initial exchange offering tokens over initial coin offering tokens, thanks to the adequate amount of research and analysis these offerings get before they are listed. This minimizes risk and makes initial exchange offering investments more attractive for investors.

• Cryptocurrency exchange platforms who gives initial exchange offerings can often attract new investors which can increase profitability for their organizations.

Initial exchange offerings are really the perfect substitute for initial coin offering. They are seen to be the evolution of initial coin offering and they are the best way as it stands to introduce new cryptocurrency projects to the general public.

With the assistance of exchange platforms initial exchange offerings are now taking the attention of the whole world and the exchange platforms are very necessary in bringing out these initial exchange offerings.