Initial Exchange Offerings (IEOs) have been repeatedly defined as the evolution of Initial Coin Offerings (ICOs). Today, more than ever, it is important to know how to launch an IEO and what are the factors that determine its success, along with what would be best avoided when embarking on this kind of journey.
The millions of dollars raised between 2017 and 2018, thanks to ICOs, have certainly shaken the crypto community and led investors to make huge profits, as well as numerous losses. The main difference between IEOs and ICOs is that in the first case the offer is not public: only customers belonging to a certain exchange can access those tokens, and not all make it.
Depending on the method with which the tokens are guaranteed, they will be allocated according to different mechanisms: Binance, for example, uses the Binance Launchpad, a tool that makes use of a real lottery to generate tickets that can be winning or losing. In the first case, the user will be able to buy the tokens, in the second case they won’t.
Through ICOs, it is possible to raise, theoretically, many more funds, but another substantial difference is related to the technological factor: while for IEOs exchanges ensure that the project complies with certain standards, in the case of ICOs it often happened that different teams pocketed the money collected from investors without ever presenting any product.
The success of Binance Launchpad with IEOs: an example to follow
The platform that many projects use, or at least try to use, to launch their own IEO is undoubtedly Binance Launchpad. After the excellent results obtained, followed by a sharp decline, this tool has acted as a guide for several exchanges.
OKEx announced “OK Jumpstart”, a platform for the launch of IEOs whose development has been completed. KuCoin (KuCoin Spotlight), Huobi (Huobi Prime), Bittrex and Bitfinex themselves are certainly not standing by. On September 24th, Bitfinex relaunched its platform, naming it “Bitfinex Token Sale”.
Here are some of the most important factors that must be taken into account in order to successfully launch an IEO.
The long-term business model: thinking of an idea that is able to reach the peak of its potential within a few months is undoubtedly utopian. The long-term vision is necessary to be able to hope to raise capital that will not fade away in a short time.
The technology developed within the project must be cutting-edge. Any idea already seen or already explored will certainly not please CZ, CEO of Binance, and to be sure that an exchange is really interested in a project it must present a working product, or at least an MVP.
Increasingly more people remember ICOs and scams that were carried out in the years 2017-2018 and no one wants to repeat such events, so it is no longer possible to come up with a simple idea without foundations to be able to access the customers and liquidity of an exchange with a view of collecting millions of dollars.
The structured documentation, which does not have to be called “whitepaper”, is a must. Length is not important: writing books about it is certainly not a smart choice. Instead, it is preferable to have a very good explanation of the project and of the technologies used, of the reference team and of the skills of the people who founded it and managed it all. Reputation is very important.
The community must be strong, the administrators of the social channels must know how to interact with the public. It is highly recommended not to use a simple bot to manage chats and to answer questions. Collaborators are needed to entertain users even when things don’t seem to be going well. The marketing part is also important: press releases and advertising are essential, as is selecting the right newspapers that really know how to promote an IEO.