Initial Coin Offerings brought a brand new concept of fundraising in the digital world. And, moreover, it’s safe to say they did it with a bang. Having raised billions of dollars throughout 2017 and 2018, however, their time seems to be definitively gone.
A broad range of projects which raised money in an ICO turned out to be blatant scams, completely shattering any community trust vested in them. On the other hand, regulators such as the US Securities and Exchange Commission (SEC) clamped down, subjecting a lot of them under traditional securities regulations and hence, putting the entire craze to bed.
However, now that the first quarter of 2019 is behind us, it’s safe to say that there is a new trend on the rise. Initial Exchange Offerings (IEOs) are here, and they seem to be here to stay.
What is an Initial Exchange Offering?
The concept of initial exchange offerings was first brought about by Binance – the world’s largest cryptocurrency exchange through the Binance Launchpad. However, it was quickly followed by almost all cryptocurrency exchanges.
The idea is that an exchange is ‘backing’ a project by allowing it to raise money by selling its tokens directly to the exchange’s users. The listing period is also massively reduced as most exchanges list the tokens for trading against other pairs almost immediately.
The newly found investor’s confidence comes from the fact that these projects are supposedly thoroughly researched by the exchange whic…
Via investing.com
