Cryptocurrencies have revolutionised the fundraising process. Over the past year, the main method of raising capital has been an Initial Coin Offering (ICO). To date, things have changed a lot. One reason is that, according to a study by statistics, almost 80% of ICO projects turn out to be scams.
At the same time, legal regulation has not yet reached a new level in most countries, leaving investors vulnerable to fraud. But since the need for funding has not disappeared anywhere, startups are moving in two directions today. The first is a private placement when the project raises the required capital in a closed-end model. This means that the initial interest in the project is quite high. The second way is an agreement with an exchange for an initial exchange offer (IEO).
In this article, we will discuss what an IEO is and the best IEO launchpads to use in 2022
What is an IEO Launchpad?
An Initial Exchange Offering (IEO) platform is a cryptocurrency launchpad hosted by a cryptocurrency exchange. Companies and organisations looking to launch new cryptocurrencies use IEOs to generate liquidity and introduce their new cryptocurrencies to crypto traders and investors. An IEO platform is similar to an ICO or IDO platform and launchpad but managed by a centralised crypto exchange.
Since tokens are sold on exchange platforms, token issuers must pay listing fees and the percentage of tokens sold during the IEO. The startup’s tokens will, in turn, be sold on exchange platforms, and their tokens will be added to the exchange list after the sale ends. Cryptocurrency exchanges receive a percentage of the tokens sold but, in turn, help the token issuers with their marketing activities.
IEO participants do not send contributions to a smart contract like an ICO. Instead, they need to create an account on the exchange platform where the IEO is located. Once that’s done, they deposit funds into their exchange wallets using coins and use that money to buy the startup’s tokens.
What is the Difference Between IEO, ICO and IDO?
- An initial coin offering (ICO) works as an initial public offering (IPO) on the stock exchange. Crypto companies present their ideas or products (if any) and try to raise funds for further development. A good ICO should at least highlight product-market fit and a strategy for future profitability. After many ICOs failed to deliver on their promises or turned out to be outright scams, ICOs have lost credibility and are now a thing of the past.
Compared to IEOs, crypto projects have to do all the heavy lifting of marketing themselves during ICOs. On the other hand, there are only a few official controls, which opens the floodgates to fraudsters.
- The initial decentralised exchange offering (IDO) was almost identical to an IEO. The only difference is that the project will be launched on a DEX like Uniswap instead of a centralised exchange which is an IDO.
On the other hand, IDOs raise less capital and generate less visibility as the trading volume on decentralised exchanges is significantly lower than on centralised exchanges.
The Best IEO Launchpads to Use in 2022
Although there will be more than a dozen IEO launchpads in 2022, not all launchpads are created equal. Some Launchpad projects generate more profit for their investors than others.
Here is a list of the best IEO launchpads for 2022:
Binance is by far the best IEO launchpad out there. As the exchange with the largest trading volume. Binance benefits from a generous fund reserve to invest in many different projects. Some of the most famous crypto projects have already started on Binance.
Some Crypto projects first listed on Binance are now among the top 60 cryptocurrencies by market cap. Binance’s most recent successful IEO is STEPN, a Web3 lifestyle app that has generated over 240x returns. It’s safe to say that investing in Binance IEO is necessary if the opportunity arises.
They are positioning themselves as the world leader in blockchain technology and the most trusted exchange for digital assets, and they have every right to do so. One of the leading exchanges by trading volume, OKEx, announced its own token sales platform – OK Jumpsmart, in March. So far, there has been no public information about upcoming projects, but we can confirm that they are actively looking for new potential projects to collaborate on.
Kucoin joined the competition and announced its new platform, Spotlight, in March. After losing positions due to lower trading volume, the former top 10 exchange seems to be moving towards an IEO to restore its fortunes. On April 3, the first IEO of the MultiVac project sold out in 7 seconds, attracting users from 59 countries.
KuCoin is also known for starting many small projects early and giving savvy investors early access to profitable projects.
Gate.io Launchpad is the token launch platform for Gate.io Exchange. Gate.io was created to give a new generation of global traders tools to enter the revolutionary age of cryptocurrencies. They made IEOs for CNNS, FACTS, MovieBloc, DREP, GoWithMi.
Although the ticket size (the amount a project hopes to raise) is typically smaller on Gate.io than on other launchpads, almost all tokens launched by IEO are currently profitable.
In March 2019, Huobi launched an IEO platform called Huobi Prime. Huobi is actually the next big exchange after the successful IEO of Binance through the TOP Network project. They completed their first selective token sale in seconds, and the token price jumped 250% immediately. Huobi Prime positions itself as a direct premium product (DPO) platform that offers users multiple benefits.
Bittrex International is a secure, reliable and advanced digital asset trading platform built for international clients and built on Bittrex’s cutting-edge technology. Bittrex announced its first RAID project IEO in February 2019. The IEO was cancelled due to a major change in RAID terms and conditions. According to the company report, the failure of the first project did not stop the company from making a second attempt; VeriBlock’s Bittrex IEO sold out in 10.4 seconds on April 2nd. Overall, this has contributed significantly to Bittrex’s reputation and market optimism.
IEOs offer great opportunities for investors, exchanges and projects. They are becoming an increasingly important part of the crypto ecosystem.
Most IEOs are oversubscribed because savvy investors know huge profits are almost guaranteed. That’s why many launchpads work with lotteries and other incentive programs to attract as many investors as possible and give everyone a fair chance.
Remember that while an IEO is an attractive option, it does not offer guaranteed returns. So be careful and responsible when investing.