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IEO News: Are IEOs going to bring new investors to the space?

IEO News: IEOs to bring new investors to blockchain

Bringing new investors into the cryptocurrency ecosystem is not easy. With this article, InWara brings the latest on IEO news and how IEOs might be building a bridge between the investors and blockchain projects.

In the early days, Initial Coin Offerings (ICOs) were the go-to method for investing in blockchain projects. As time wore on, people discovered that many ICOs were not successfully developing products, some even ended up as scams and as a result a large number of investors lost significant sums of money.

To plug this perceived gap in regulations and to keep the money of investors safe, the Security Token Offering (STOs) made its way into the crowdfunding space. Widely touted to be the messiah of the cryptocurrency market, STOs haven’t quite been able to lure investors into the ecosystem, simply because a large portion of the community believed that conforming to the securities frameworks in various jurisdictions is prohibitively expensive.

There are, of course, the stablecoins which seek to combat volatility of coin price. Despite their ideal of stability in pricing, issues such as a lack of investment upside have dampened enthusiasm.


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Tracking the history of the market, we have now reached the Initial Exchange Offering (IEOs). These new token offerings are provided on cryptocurrency exchanges, rather than being hosted by the blockchain project itself.

Many speculate that IEOs may be the ideal way to bring new investors into the cryptocurrency space where others have failed to do so. (Others believe they’re dangerous to the space and are riddled with conflict of interest!)


Safe haven compared to ICOs


One of the key reasons for the downfall of ICOs is the early stage scamming - An ICO which won’t list on exchange leaves with tokens that you can’t trade and in essence are worthless.

Here’s where the IEO steps in. IEOs are often listed by the launchpad exchange and offer an immediate source of liquidity to the retail investor. While some might believe that launchpads do exhaustive due-diligence, a recent InWara report, uncovered much the opposite.


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Fierce Competition - A harbinger of commercial success?


The massive uptick in popularity of IEOs could lead to self-selection on exchanges. For instance, of the 100 projects vying for a spot on the Binance Launchpad (learn about Binance launchpad), only 1 a month make it. This would in effect mean that the quality of the IEO that does make it is significantly higher with a higher probability of success. (Sceptics may also say they had the most money to begin with, but laissez faire & Darwin (?) would dictate otherwise)

There is also an element of credibility for the exchange, directly linked to the number of people who would transact on a shitcoin cesspool, which would drive the organic growth of good projects.


Easier to Find; Easier to invest


Cryptocurrency exchange launchpads make for easy marketing. Every launchpad does a good job of promoting the project they’re looking to host and if it’s just the 1-2 projects per month, you can easily find the project during your daily views of your portfolio. Easy to find; easy to invest.


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In conclusion, IEOs appear to offer a better alternative to ICOs in that they’re less likely to fail given the vested interest of the community at large and given that they’re not as expensive as STOs, they provide a low barrier for new entrepreneurs. Further the ease of finding a new project is written into the marketing contract with the exchange launchpad and we have a full loop - Low barrier to entry implying more projects; easier to find implying easier to invest; and self-selection implying a better chance of success.


Maybe they are here to stay.


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