ICOIEO

Difference between ICO & IEO

You may have heard of the virtual currencies, like altcoins and cryptocurrencies. They have their dedicated blockchain, used mainly as the digital payment medium. However, crypto tokens work on a blockchain, acting as the medium for decentralized app creation. Initial Coin Offering is a process, through which we can create, circulate, distribute and sold the crypto tokens. Initial Exchange Offering is another alternative of ICO, and it is becoming more popular in the present age. However, most of us have confusion about the difference between IEO and ICO. Let us help you in knowing the difference.

Originally, Initial Coin Offerings has been one of the best options for raising money from crypto enthusiasts and investors. The significant traits of these ICOs are-

•    ICO can conclude while the tokens and coins have become tradable

•    It can include more than one fundraising rounds with tokens or coins on offer. The early investors will get a better reward as the incentive in their tokens.

•    Most of the ICO relate a particular number of tokens or coins before the sale.

•    The creators in the economy establish the price of ICO.

ICO- Declination of this financing model- Birth of IEO

In the year, 2018, there was a crypto crash has caused an adverse effect on this ICO. The purchaser has started losing confidence. Due to the higher regulatory pushback, we have found a decrease in the amount that is raised through ICO. However, the industry has made different approaches to finding a way for raising fund from the investors. Thus, to solve this problem, there has been an introduction of IEO.

The companies do not market their new cryptocurrency. However, they are relying on the crypto exchanges for offering tokens to customers. The new financial model lowers the risk of scams. The startup team for IEO has not released and conducted the fundraising platform. However, it makes an effort for the legal and financial test for the exchange. After this test is over, it presents a token sale, where anyone may participate.

Find the major differences- IEO and ICO-

Role of an intermediary

The intermediary in between the investors and the issues is the major factor differentiating IEO from ICO. The trading site assesses blockchain startups, following a process. The parties make a deal and identify the terms for holding token sales.

While any investor purchases tokens for IEO process, he sends fund to one of the startup wallets. The exchange controls those funds, and there is an allocation of funds to the startup.

Transparency-

The startup team for blockchain never reveals any information on the company for launching ICO. There are a website and white paper for launching the fundraising platform. This anonymity can result in the use of ICO by fraudsters.

However, you will not find this case for the IEO. During the checking process, there is a disclosure of company information. The investors also undergo the identity verification process. That is why there is no chance of money laundering. Hence, the process is transparent.

IEO- How it benefits the startups-

After the IEO process, you can find the listing of new tokens within a short time. However, ICO can take several months to accomplish this process. Another benefit to you is about the customer base. With the launch of ICO, the startup can draw the attention of investors independently to the fundraising site. Thus, it is essential to create a marketing campaign. However, for IEO, there is very easy and fast access to different potential investors.

In conclusion, we can say that the IEO model is more advantageous to the investors and developers. It will gain higher popularity in the future crypto industry.