Initial exchange offerings or what we call it as IEOs, are the token sale programs conducted on the exchanges and is much efficient compared to the initial coin offerings or ICOs.
At the beginning of 2016, ICOs revolutionized the whole fundraising process for blockchain startups.
However, it soon started to fizzle out due to loss of user interest as the majority of ICOs turned out to be a scam. Also, strict regulations restricted greater user participation.
This is when IEO stormed the market and became an essential part of the cryptosphere for raising funds.
IEOs helped to solve many of the shortcomings that ICOs had and ensured all legit projects are listed, and investors get benefitted from the evolution of the cryptosphere.
At present, there are many exchanges which have their own IEO platform, we’ve shortlisted the five best IEO platform for you.
Best IEO Platforms In 2020
Binance is the pioneer or the first big mover in the IEO segment with the launch of its proprietary platform called Binance Launchpad in 2017. It became mainstream in 2019 and has conducted many successful IEOs, including BitTorrent, Wink, Troy, Celer, etc.
Banking on the exchange’s superior technology, the platform’s matching engine can process 1,400,000 transactions per second. And, strong partnerships and proven product platform resulted in higher investor participation in every token sale and liquidity.
The platform’s effectiveness can be gauged from the fact that it raised $6 million in 22 seconds for Fetch.AI and sold tokens worth $7.2 million in 18 minutes for BitTorrent. Binance has to introduce a lottery method to give everyone an equal opportunity to participate in the token sale.
To participate in any token sale listed on Binance Launchpad, the user first need to acquire BTC, LTC, ETH, or BNB (in most cases, it is BNB) to start with the process. On top of it, the platform supports all devices and gives a seamless user experience through multi-language support.
The launch of Huobi Prime by Huobi Global can be said as an answer to Binance’s growing supremacy in the IEO segment.
The IEO platform launched in March 2019 provides potential crypto projects to raise capital from some of the genuine investors. Huobi describes its IEO platform as a Direct Premium Offering (DPO) platform that offers many advantages to the users.
Huobi Prime lists only those crypto projects which pass their stringent screening process to ensures only great projects make the cut. Also, the purchased coins are immediately credited to the user’s account that can be traded on Huobi Global against the Huobi token (HT).
Other advantages include:
- The platform gives equal opportunity to every user, whether big or small, to participate in the token sale, and maximum investment per user is fixed at $1,000 worth of HT.
- To curb or mitigate loss from extreme volatility when the market opens, it has periods of tiered price limits, which means the price of a token cannot rise or fall beyond a certain point in a period.
Huobi Prime has established itself as a reliable platform for conducting IEOs with average returns of around 240%.
Tokinex is an IEO platform by Bitfinex and Ethfinex that allows investors to participate in token sales of pre-vetted and exciting crypto projects. Launched in May 2019, Tokinex’s first successful IEO was Ampleforth, completed on 28th June 2019.
The platform provides a superior user experience to users and has undergone significant testing for smooth and reliable operation. Tokinex requires each user to complete the KYC verification process using Blockpass mobile app to participate in the token sale. Blockpass burns the KYC data after the end of the token sale.
Other key benefits of using the Tokinex platform include, users can transfer coins directly from their exchange wallet and receive the tokens directly to the wallet, that allows frictionless secondary market trading. All the project goes through a multi-layer screening process, and a third-party consultant provides comprehensive reports.
After developing one of the most successful crypto exchanges, KuCoin entered the race of IEO and launched its native IEO platform called KuCoin Spotlight in March 2019.
The platform is powered by its proprietary token KCS (KuCoin Shares) and works on the principle of first-come, first-served basis. Therefore, investors need to act fast if they want to invest in any great crypto project listed on the platform. Its first IEO for the MultiVac project was completed within 7 seconds and attracted investors from 59 countries.
To participate in the token sale in KuCoin Spotlight, investors must complete their KYC verification before their purchase. The platform can be regarded as one of the best in the category, and all its previous IEOs have yielded a return of almost 80%.
Gate.io Startup is an innovative IEO platform that provides users access to unique and advanced crypto projects. It allows token sales for existing crypto projects at a discount, if the project is listed on another exchange besides the IEO sale.
Both the non-initial (discount) and initial sale on Gate.io Startup platform is similar, and the process includes:
Placing of order in the first 2 hours of the sale in which all orders are treated equally. In the next 2 hours, the distribution of token takes place based on the distribution factor and then distribute the tokens on all eligible orders.
To know how to participate in a Gate.io initial and non-initial exchange offer, visit the link.
It’s true that IEOs have helped both the crypto startups and investors in the value unlocking process and can be regarded as a natural progression from the ICO era.
For crypto startups, it ensured recognition, verification, and smooth capital raising process. And, for investors, attractive returns on the investment and low risk of getting scammed. All these factors helped IEO to gain popularity and become the most preferred fundraising method. However, how scam-proof the system might be, investors should always pay attention to the following factors before choosing an IEO platform.
- The reputation of the platform or exchange
- Ease of use
- Liquidity after the sale of the token
- Safety and stability of the platform
- Multi-coin support (other than exchange’s native coin)
Before ending this article, a word of caution for investors: Though IEOs are an attractive investment option, it doesn’t guarantee returns; therefore, you should weigh all the risk-reward factors before investing.
If you think we have missed out on any IEO platform worth considering or want to share your thoughts, please share in the comment box below.