To properly evaluate an IEO, we should look at it in comparison to an ICO. IEO is a set of activities aimed at initial preliminary fundraising. IEO is conducted by the authors of a cryptocurrency project. ICO in this comparative context means a pre-offering of tokens before selling. It helps to successfully market on a platform for sale. It is also used to raise money and deal with this issue before reaching the goal.

IEO has clear goals. It is to go through financial and legal format procedures.  This kind of testing is practiced on all exchanges. We can define it as testing the administrative part of a cryptocurrency project. If the verification is successful, then the cryptocurrency can enter the big market, and the authors of the project can launch the sale. By the way, if you want to know more about IEO, we recommend you to visit here.

We can confidently say that IEO promises the public more honesty. Why? Because ICO has high rates of fraudulent schemes. Satis Group LLC conducted research on this in 2018. According to the results of the study, it became known that up to 90% of ICOs are dubious projects. Also, the research showed that fraud in the field of IEO is barely up to 10%.

Before launching a cryptocurrency project, a marketplace for sale must necessarily verify the new token. To this end, the project is put through Due Diligence. At this stage, the presence or absence of a legal entity registration and the project’s statutory documents are checked. The investment prospects of the nascent token are also evaluated, market demand is studied, risks are assessed and the prospects for the success of the project as a whole are evaluated.

If the stratum successfully passes the verification stage, the trading floor concludes an agreement with it. The contract specifies all the terms of the token sale. This is the following information:

  • When the crypto token sale starts and when it ends;
  • The maximum allowable unit of tokens on the buyer’s side;
  • Initial value of Fiat;
  • The amount of the listing fee;
  • The amount of commission from token sales;
  • Soft cap and Hardcap, what comes after them?

During token sales, money from the investor does not go into the project account. The money is accepted into the starter wallet. The startup wallet belongs to the exchange. The exchange has full control over the money. When money is needed for further startup procedures, it is transferred to the project account in several installments. Each part has a different purpose. It can be a marketing goal, MVP development, or something else. If the initially stated goal is not met, the money is transferred back to the investors’ account.


The value of IEO

Your token traders prefer IEO. For them, it means minimizing effort. For you, it will also be an unburden some procedure. You only have to go through a few simple steps. One of them is creating an account. The mandatory steps include a KYC/AML check. Once these issues are closed, you can think about IEO. But you won’t be required to retake the path to IEO in the future.

There are also great benefits for startup projects with tokens. One useful option is the speed of going through the IEO. This issue is completed in record time. It can be a few minutes or a day at most. Why? Because the Due Diligence process verifies all relevant information and allocates funds, then monitors them. This increases the credibility of the startup and the token.

Also, IEO affects the listing rate. This influence plays in the token’s favor. New tokens that pass IEO are quoted as quickly as possible. It can be a couple of days. Here, too, it is appropriate to compare IEO to ICO. The latter involves going through a lengthy vetting process that lasts several months.

Another important factor is the ability to present the token to a ready-made customer base. An IEO opens up the opportunity to get the word out to the masses about its emergence. You don’t have to spend effort on marketing and promotion on your own. IEO allows you to start immediately with a community of potential investors who may be waiting to launch your token.


Features of IEO

As we said, IEO works closely with cryptocurrency exchanges. In this sphere, there are two main trends to consider. They are the following phenomena:

  • Organizers of sales are interested in holding an IEO with the maximum number of users. This guarantees the collection of the necessary amount of money.
  • Investors usually choose exchanges with the best IEOs. They also choose exchanges with the maximum number of token sales. This tells them about the integrity of the cryptocurrency project. This is one indicator of the reliability and promise of the new cryptocurrency.

For these two reasons, the market tends to centralize.

Traders tend to make transactions on the safest services. Currently, there are not many such sites.

Things are different with ICOs. In this context, the project may not disclose personal information about the owners and other important information. In this case, it is enough to organize a small website, write technical documents and you can launch comprehensive measures to raise money. This high anonymity plus the lure of big money. These factors have led to the emergence of many fraudulent groups in this area. They have already committed scams for huge sums of money.

It does not work with IEO. In this case, scammers can’t cheat cryptocurrency investors. But there is also an investor vetting system. This is KYC. With this kind of verification, each party ensures its own security.


How does the launch of IEO happen?

In this matter, every step is thought out for the success of your cryptocurrency project. The launch consists of several steps. They are as follows:

  • Promotions for the external community. This promotional campaign attracts 5,000 users on Telegram. A spam campaign with 2,000 posts will be launched. There are also 500 posts each on Facebook and Twitter, plus 200 posts on Linkedin.
  • The first interaction with the team. We guarantee an Ask-Me-Anything session in our Telegram group.
  • Promotion – which includes announcements on our social networks, mentions in newsletters, and a separate post on our blog.
  • Launchpad. This stage includes a fundraising session to engage with the community.
  • Token listing;
  • IEO Launching token sales.

We have been involved in IEO for over three years. We have quite a lot of experience in this area. If you need even more information, then please contact us via our feedback form. You can also leave a request for a listing.