The phenomenon of cryptocurrency isn’t a new concept anymore, and everyone is well-versed in this term. Initially, ICO (Initial Coin Offering) gained tremendous popularity and fame. As a result, a wide range of businesses opted for ICO token development to reap the benefits.
But, when in 2017, China banned domestic crypto startups from attempting upcoming ICOs, and people started searching for alternatives to ICO. It is where the concept of Initial Coin Offering (IEO) came into the picture.
This concept of cryptocurrency enables businesses to take funds for the project without fearing government intervention. Impressed by the popularity, businesses planned to launch an IEO for their project.
An IEO is a new technique for blockchain companies to attract significant investments that involves evaluating and selling tokens directly tackled by the cryptocurrency exchange. So, let’s read this blog to know everything about launching an IEO, its features, benefits, and more.
Table of Contents
What Is IEO (Initial Coin Offerings)?
IEO, or Initial Exchange Offering, is a fundraising model for blockchain projects where tokens or coins are sold directly to investors on a cryptocurrency exchange platform. Unlike an ICO (Initial Coin Offering), where tokens are sold directly, an IEO involves a third-party exchange that facilitates the token sale.
IEO has fewer restrictions and deadlines while yet covering a worldwide market. In December 2017, the biggest cryptocurrency exchange, Binance, conducted the first-ever IEO.
Investing in cryptocurrencies offers such high ROI, so it is becoming increasingly popular today. As a result, a lot of businesses are planning to launch an IEO for their businesses.
In an IEO, the exchange typically vets the project team and their technology before allowing the token sale to occur on their platform. Investors who participate in an IEO typically need to register and go through a KYC process on the exchange before they can purchase the ICO tokens from the best ICO listing websites.
Overall, an IEO can provide benefits such as increased credibility for the project team, access to a larger pool of potential investors, and a more streamlined token sale process compared to an ICO.
However, it also comes with potential downsides, such as higher fees and the risk of relying on the exchange’s reputation to facilitate the sale.
Simple Steps to Launch An IEO – A Complete Process
Are you planning to IEO launching but don’t know the process? Here is a step-by-step process to launch an IEO highlighted by the blockchain development company professionals.
1. Have A Professional Team
The very first step to launch an IEO is having an entire team of professionals who can work on your initial exchange offering solutions. Experienced team members who know IEO and blockchain development can help you create and validate an idea well.
Also, professionals can help you get the best investment for initial exchange offering development as the investors prefer to invest in a project with a team rather than an individual. So, search for the best blockchain development company; the experts will help you deliver a perfect project.
2. Create An MVP
The next crucial step to launch an IEO successfully is creating an MVP or Prototype. A well-developed prototype for IEO or a minimum viable product can make it easier for an investor to understand your business idea, determine its long-term validity, and convince them to make investment decisions.
Also, creating an MVP before the IEO launch will save much of your cost and help you make changes in the project if there are any loopholes.
3. Connect With The Right Exchange
Coming to the third step of ‘How to launch an IEO model?’ is connecting with the right exchange program. The type of exchange you choose for your IEO cryptocurrency project will impact its success rate in the future.
Also, every exchange demands a listing fee and commission in the raised fund, whose value keeps varying. Therefore, it is a must for entrepreneurs and SMBs to choose the right exchange for the IEO project.
4. Check Legal Regulations
The process to launch an IEO requires knowledge of legal rules and regulations. It will help you prevent the hurdle in the IEO crypto launch process. Even the most popular IEO crypto launch processes demand legal checks to ensure the token is a utility token.
So, you must have a desired team member well-versed in the legalities. Then, hire smart contract development company professionals to help you check all the legal functions relevant to your IEO project.
5. Make A Detailed White Paper
Creating a whitepaper is another significant stage to launch an IEO. A whitepaper is a technical document explaining every aspect of the project. It covers every detail, from clearing the objective of the IEO crypto project to market analysis, development, and extracting token information.
Drafting a whitepaper help investors get a clear idea of the project in the long term, and they’ll get convinced to invest in your project. A whitepaper can act as a sales pitch for your IEO project launch.
6. Establish Funding Goals
Another major thing to consider while launching an IEO is establishing clear funding goals. When you don’t have your goals cleared, it becomes difficult to determine the number of tokens introduced in the IEO sales and prevent you from falling into a scam.
Also, keeping your goals clear will help you understand the cost to launch an ICO or IEO and keep the investors more interested in your project funding.
7. Invest in Token Development
Finally comes the most important steps to launch an IEO, i.e., token development investment. All the tokens created will be listed on exchanges and bought by investors in exchange for capital. It is advisable to be clear when discussing investing in token development regarding–
- The number of tokens you intend to issue
- How to select a blockchain platform?
- And other factors
8. List Your Tokens
The last step to launch an IEO is listing the tokens on a suitable IEO exchange platform. Each platform has certain rules and guidelines that you need to fulfill to list your token and pass the selection criteria. But wait! The process doesn’t end here.
Launching an IEO platform and listing the tokens is insufficient to ensure project success. So, it is advisable to try different marketing techniques, such as – Email marketing, press release, blogging, and social media marketing.
These are the seven simple steps for IEO launch that will help you successfully launch your project on the go. There are multiple benefits to it as described below.
Benefits to Launch An IEO
The following is the list of benefits to launch an IEO. Let’s discover them one by one.
1. Improved Security
The first benefit to launch an IEO is that it has a robust security mechanism. IEOs are conducted via a third-party exchange, building strong trust among the investors. The IEO cryptocurrency platform has an established payment structure that is more convenient and reliable.
While using IEO, the users do not have to worry about funds’ security. Since the IEOs are conducted through a credible exchange program, there are fewest chances of fraud and scams.
2. Fundraising Ecosystem
The second amazing benefit to launch an IEO is that the exchanges govern their fundraising processes. It means small business owners and entrepreneurs do not have to put in additional efforts to ask investors to do a favor. The exchange process handles everything from using IEO to the promotion for raising funds.
3. Expanded User Base
A wider user base is another major advantage to launch an IEO, as every exchange trading platform has millions of active users who are involved in token sales. So, whether you are familiar with a wide range of investors or not, initial exchange offering development will provide you with easy and fast access to funding.
Before launching an IEO on the platform, the exchange verifies the investors’ and the token credibility. Due to this, it becomes easier for startups and investors to build a strong relationship trust rather than searching for different ways to remain assured of authenticity. So, investing in IEO development solutions results in increased Trustability.
5. Smart Contract Management
Regarding upcoming ICO fundraising, smart contracts are managed by the token issuers, i.e., Startups. On the other hand, IEO is governed by the exchanges conducting the token sales. As a result, entrepreneurs can focus on other crucial tasks without affecting other work.
6. Token Listing
Finally, the last yet major benefit to launch an IEO is that it facilitates startups and SMBs to list their tokens effectively. Implying that, to approach a reputable exchange and list their token, token issuers do not need to adhere to various restrictions on fund-raising. In the case of IEO, the process starts at this phase.
What Is the Cost to Launch An IEO?
The average cost to launch an IEO on major exchanges ranges from $10,000 to $30,000. Investing in initial exchange offering development solutions is a fairly expensive process.
So, businesses must have a high budget to spend on IEO launch costs. For an exact cost estimation to launch an IEO, businesses should consult the leading blockchain development firm.
The experts will do everything, be it the cost to hire blockchain developer or an entire team for the project launch.
List of Most Popular IEO Exchange Platforms
Initial Exchange Offerings receive tremendous attention during 2018-19. So, here is the list of the most popular IEOs.
|IEO Platforms + Year||Profit|
|The Fetch.AI IEO||Binance Launchpad in 2019|| |
The Polkadot IEO
|Kraken exchange in 2020||$43 million|
|The Serum IEO||defunct FTX exchange in 2019|| |
The Hashgard IEO
|Bgogo exchange in 2018||$10 million|
|The Harmony IEO||Binance Launchpad in 2019|| |
The Celsius IEO
|Bitfinex exchange in 2020||$20 million|
The Band Protocol IEO
|Binance Launchpad in 2020||$5 million|
The Ankr Network IEO
|Binance Launchpad in 2020||$3 million|
|The Matic Network IEO||Binance Launchpad in 2019|| |
The invention of IEO (Initial Exchange Offerings) is a brand new concept, and more and more businesses are falling into developing and launching IEO. Now that you know everything about IEO launching, it is time to begin the process. We hope that this blog is helpful enough for you to get started.
If you need expert assistance, feel free to contact Dev Technosys professionals. We have expertise in the latest tools and technologies, including blockchain, cryptocurrency, and ICO token development.
Feel free to discuss your project requirements with us. Book your free consultation today!
Frequently Asked Questions
What Makes IEO Solutions Successful?
IEO platforms offer an improved user experience to investors as compared to ICOs. In addition, there is less risk of scams, as IEOs are regulated per the exchange’s rules.
How Do I Start An IEO?
Here are the steps to launch an IEO –
- Have an experienced team
- Create an MVP or prototype
- Tie up with the best exchanges
- Check legal regulations
- Create white paper
- Make funding goals
- Invest in token development
- List your tokens
Which Exchange Is Best for IEO?
Binance Launchpad is the best exchange for IEO. It is one of the largest centralized exchanges on the market, with over 90 million users. So, if you plan to launch an IEO using the best exchange, you can choose Binance.
What Is the Difference Between IEO and ICO?
The difference between IEO and ICO is that ICO investment models are launched on the Startup’s website, whereas IEOs are launched on the cryptocurrency exchange’s platforms.
What Is An IEO In Cryptocurrency?
IEO or Initial Coin Offering refers to the method of raising funds via cryptocurrency exchange platforms.