- Posted by: VuTrades
- Category: Blog
Initial coin offerings have lost their appeal in recent years — instead, many crypto projects have started raising funds using an initial exchange offering.
Known as an IEO for short, this is where a cryptocurrency exchange oversees the token sale.
The benefits are clear: blockchain projects go through a comprehensive vetting process where their white paper is scrutinized, and their crowdfunding drive will also get publicity.
Many investors tend to find IEO platforms more appealing because there’s a greater level of due diligence than what’s seen with an ICO.
For example, Vutrades is one of the trading platforms that aim to deliver innovation to the crypto market. The site has helped more than a dozen blockchain projects raise capital since launch.
How the Verification Process for IEOs Works
An IEO platform will examine a number of other factors before giving a blockchain project the green light. Any cryptocurrency exchange worth its salt will begin vetting the team behind the business, put the tech through its paces, uncover unique selling points, assess the tokenomics and gauge whether there’s any demand for the business in the crypto space.
If the exchange platform decides to proceed, investors will have to go through KYC and AML measures (Know Your Customer and Anti-Money Laundering checks.) Prospective contributors will also be given full transparency about how the token issuers are progressing in hitting their target.
Advantages of IEOs
- Investors feel more confident. Seeing a digital asset token sale on a trusted crypto exchange can give a project more legitimacy.
- IEO projects are more likely to run smoothly. As well as overseeing the token offering, IEO platforms can offer marketing and development support.
- Initial exchange offering investors have a much more user-friendly experience. Compared with ICOs, contributing to blockchain projects is easier because IEO platforms tend to be better designed.