IEO vs ICO :- Which is the Best Tokenized Crowdfunding Model

IEO vs ICO :- Which is the Best Tokenized Crowdfunding Model

A variety of Blockchain centric projects got kickstart back when the Blockchain industry was introduced with a hassle-free mode of fundraising.

The popularity which ICO was receiving since its birth was unmatchable. The use and implementation of ICOs were very huge and many funding industries are still enjoying the benefits of them.

ICO became very much popular in a shorter period of time. Many startups and investors gained a lot from this.

But in this digital world, nothing is safe, Soon hackers started hacking ICOs in the name of lucrative investments. 

The starting of this year was good for ICO, but soon the crypto world saw the birth of many new crowd-funding models and one of them is IEO.

Alike ICO, Soon IEO also became more popular and was mostly used for many blockchain-based projects.

Let’s see some of the Pros and Cons of ICO:- 

Pros of ICO:- 

  • The ICO funding model is devised in a way such a way that anyone can invest in it. One doesn’t need to be an extremely well-financed investor. 
  • The complete installation process of an ICO is very easy as compared to other crowd-funding models.
  • The liquidity is very high in Initial Coin Offering considering the very short period of launch time.
  • No government intervention in ICO.

Cons of ICO:- 

  • Not considered as a good option when it comes to long term investments. 
  • Limited security process and is prone to fraud and scams.
  • Lots of useless coins are present and they investors are not able to find them, which leads to zero profit for them.

The various questions on ICO gave birth to a very new crowd-funding model known as IEO. Let’s see how IEO will the gaps in ICO.

Before we start anything, Let’s see:-  

What is IEO?

Initial Exchange Offering was initially launched as ICO 2.0 in the market. The mechanism behind the development and the launching of IEO is all similar to that of ICO.

The difference between ICOs and IEO’s lies in the fact that unlike ICOs which are launched on the startup’s, IEO’s are launched on the cryptocurrency exchange’s platform listing. 

How to built an IEO?

The process one have to follow in order to build an IEO and do crowd-funding is initially similar to that of ICO.

Initially, you have to start with the development of the whitepaper highlighting the purpose of your offering and have to offer them to the masses to the general.

Then comes the development of the crypto coin to set the base of the whole offering part of the IEO.

Starting from marketing to running the whole campaign will now be the responsibility of the IEO. 

When merged all the advantages of the IEO in one base, Then the conclusion was IEO is a strong competitor of ICO. Let’s see how.

Pros and Cons of IEO:- 

Pros of IEO:- 

  • The issuers don’t have to put extra effort and money behind their exchange. This proves to be the biggest advantage of IEO over ICO.
  • The token issuers will be able to take the proper advantage of a wide customer base that the exchanges will be already having. This increases their scope of making their project reach more people.
  • The exchange will completely take care of the whole KYC and AML of the issuers.
  • In the case of IEO, the creators send tokens to the exchange, which in return sells the token to the issuers through their specific platform at some specific price. 
  • The IEO platforms operate within an organized legal structure that protects the startups from each and every negative consequences. 

Cons of IEO:- 

  • The IEO exchanges are still prone to fraud. Small IEO’s are very theft-prone as they are not getting proper concern.
  • The level of liquidity is lower compared to ICOs.
  • Many investors do price manipulation, one of the biggest con of IEO.

Let’s have a clear comparison between IEO vs ICO:- 

Factors IEO ICO
Project Evaluation Done by the Exchanges Not Available
Investors Only those who are registered on the Exchange Anyone
Contribution Exchange Profile Smart Contracts
Cost of Launch Higher Less compared to others
Requirement None Present
Transparency Low Low
KYC Requirement Handled by Exchanges Yes
Liquidity Higher Less
Security Higher Less
Counterparty Exchanges Platforms
Promotion Done by Exchanges Basically Done by Startups
Fundraising The Exchange Platform Token Issuer Website

After this comparison, It is clear that IEO is more profitable and advantageous than ICO. 

Let’s see some of the benefits which IEO provide to various users:-

Benefits Startups Exchanges Investors
Listing Rates Gaining more attention Greater Security
Speeding the sale of tokens Doing more income No barrier to entry
Attracting a huge customer base Accessing to all the latest and exclusive coins. Minimizing the effort.

What will be the future of IEO?

After this comparison between IEO and ICO, It is clear that IEO will stay for a long haul. 

The interest which IEO gained from investors is comparatively low as compared to ICO.

But considering all the benefits which IEO tends to offer in terms of security and ROI makes this crowdfunding model a strong competitor for others.

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