Initial Exchange Offering is Already Happening in the Cryptocurrency SpaceJune 7, 2019
Initial Exchange Offering is the next trend in the cryptocurrency space. This is not new. Exchanges like Bittrex, Binance, and OKEX are already into IEO. The race for IEO is getting harder.
Bitfinex will be launching its first token on Initial Exchange Offering (IEO). The sale is scheduled to start on June 13, 2019, and it is likely to end when it touches upon a hard cap of $4.9 million.
IEO is, in reality, a variant of ICO. However, some of them think that it is a better version of ICO. IEOs are specific about exchanges. Anyone with a crypto-wallet can avail ICOs. ICOs are most preferred because it is open to the public.
While several investors are skeptical about ICOs, many feel that a whitepaper is all needed to bring in investors into ICOs. Regulators are not in favor of ICOs either.
IEO is considered to be more trustworthy because the exchange which launches the IEO monitors the process by being an administrator. The security of the IEO is deemed to be reliable if the investors trust the exchange. However, if the reputation of the exchange is in stakes, so is the reputation of the IEO down South.
With IEO, the sense of risk is lower than ICOs, and that is sufficient reason to bring in more investors. Well-established and high ticket exchanges do their research and verification to ensure that the token is authentic.
Investors need to ensure that they are working with well-known exchanges as opposed to working with exchanges that are half known. Though there are several cryptocurrency exchanges, there are only a few trustworthy exchanges. IEOs have their risks and limitations. The initial question that arises is about whether you should trust the exchange or not. Several exchanges are not trusted for their inappropriate security and management practices.
Several blockchain experts are against the IEOs for the fundamental reason that it is against the core idea of decentralization. The revenue flow is under the complete control of the exchange when the exchange oversees the process. Fundamentally, the cryptocurrency is considered to be against any third-party control.
Mike Chen, CEO of STP, stated in an announcement, “The cost-prohibitive nature of traditional funding methods has led to a rapidly increasing demand for solutions that simplify asset offerings.”