As the crypto market continues to thrive, so do investments which sprout out from it. The investment pool from crypto is becoming wider and wider with each day passing by and it would be only fair to throw light on some of them with potential.
An Initial Exchange Offering has been making waves lately and as one would guess, it is similar to the traditional Initial Coin Offering, just less popular and a different type of crowdfunding method.
Initial Coin Offering since 2013, has been the primary medium of fundraising for blockchain projects, and ever since Mastercoin came out with the first ever Initial Coin Offering, there’s been over a hundred of them on the market now.
An Initial Exchange Offering, however, has its token sale being handled by an exchange unlike that of an Initial Coin Offering where the developer is the one to check the smart contract, together with its security and plan.
Therefore with an Initial Exchange Offering, the whole project lies solely on the exchange or many exchanges, covering the smart contract as well as the marketing strategies. The exchanges here are therefore the counter-party whiles Initial Coin Offerings, on the other hand, makes the counter-party the developer.
Investors are basically required to create an account with an exchange before they can participate in an Initial Exchange Offering.
Now just like any other cryptocurrency investment, it’s got its pros and cons but also like any other crypto investors, investors are ready to take their chances on them. Initial Exchange Offering projects get listed on exchanges very quicker than Initial Coin Offerings and each project can choose its terms and conditions with the exchanges.
Getting your project listed on an exchange isn’t a walk in a park but also very necessary in making a healthy token economy. Initial Exchange Offerings also tackles one of the most talked about issue in the crypto business, scams.
With Initial Exchange Offerings, there is a high assurance the exchange isn’t going to scam or phish you. Initial Exchange Offering is also able to prevent price manipulation unlike the familiar situation with Initial Coin Offerings.
With ICO’s, the token is listed on an exchange and buyers that buy cheaper tokens in the pre-sale sale then quickly sells them for quick profits. Initial Exchange Offerings are not very popular and that far from perfect but so does Initial Coin Offerings who are also battling with their flaws. The truth is there is no perfect crowdfunding mechanism and most of them are still a work in progress towards a better stage.