ICO versus IEO: Crypto Startup Project Funding

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Many crypto projects are emerging as cryptocurrency is gradually gaining huge adoption in the world. But as these projects are emerging, funds are being required by the founders to run the project.

However, ICO which means Initial Coin Offering has been the approach used for crypto project crowdfunding and ICOs really gained adoption in 2017 and 2018. But ICOs had and still has many downsides. One of it being that, majority of ICOs were scam.

Initial Exchange Offering (IEO) then appears to be the future of crypto projects crowdfunding as it has many benefits and advantages over the Initial Coin Offering approach. IEO is directed on the foundation of a cryptocurrency exchange and it is controlled by an exchange for the benefit of the startup that tries to raise funds with its own generated tokens.

Now, let's compare the two approaches..

With ICO, fundraising is carried out on the token issuer's website but with IEO, fundraising is done on the exchange platform. IEO happens to give more trust to investors than ICO has IEO reduces and eliminates any form of scam.

Secondly, with ICO, smart contract is managed by the startup conducting the token sale whereas with IEO, smart contract is managed by
the cryptocurrency exchange.

Thirdly, with ICO, the project owner(s) have to reach out to the exchange to list their token but it is not so with IEO. For IEO, the token is listed on the exchange where the initial offering takes place. This is an added advantage.

On the whole, IEO offers a high level of trust and is more simplified. IEO also makes token listing and marketing easier since the platfirm takes part in the operations. IEO looks likely to take over in crypto projects crowdfunding.

Posted Using LeoFinance



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