IEO (Initial Exchange Offering) is a fundraising method in which a new cryptocurrency project launches its token sale through a centralized exchange.

How IEOs Differ from ICOs

An IEO can be seen as an evolution of the Initial Coin Offering (ICO) model. While an ICO involves a project selling its tokens directly to the public, an IEO uses an established exchange as a trusted third party. The exchange acts as the intermediary, facilitating the sale and often conducting its own due diligence on the project.

For investors, the main benefit of an IEO is the added layer of security and trust provided by the exchange. The exchange vets the project team and its business plan, and the funds are managed on the exchange's secure platform, which reduces the risk of scams. For the project, an IEO provides access to the exchange's large user base and marketing resources, which can help ensure a successful launch.

The Process and What to Look For

The process of an IEO is relatively straightforward. The project submits its application to an exchange, which conducts a thorough review of the whitepaper and team. If the project is approved, the exchange handles the token sale. To participate, users must have an account on the exchange. Once the IEO is complete, the new cryptocurrency is often immediately listed on the exchange, providing instant liquidity.

The IEO model offers a more secure and reliable way to invest in new projects compared to the ICO boom, but it is not without risks. Investors should still do their own research and be aware that the success of the project is not guaranteed.