For virtual currency investment, there are ICO (initial offering), IEO, and STO as methods of raising funds for issuing crypto assets, so I will explain them. If you are interested in virtual currencies, you will have often heard the term IEO. IEO is a type of funding method for virtual currency, similar to ICO and STO. Therefore, this term will appear frequently, so it’s a good idea to memorize it. You can also make money through IEO. Explanation
What is an IEO?
IEO is an abbreviation for Initial Exchange Offering. The meaning is one of the methods of raising funds through the issuance of virtual currency through the virtual currency exchange. For companies that issue virtual currencies, by issuing them through a virtual currency exchange before they are listed on the market, they can appeal that it is not a fraud. It is possible to attract attention. Therefore, the reality is that there are so many projects that have adopted this funding method.
How IEOs work
The IEO first asks the virtual currency exchange to review the coin. Coins that pass inspection have the advantage of being mediated by exchanges and purchased by investors. If you buy and sell using an exchange, you can raise funds, so it is one of the most effective means of procurement. Investors also benefit, and those who use the exchange have the advantage of being able to buy at a discounted price, so it is a win-win for both parties.
Advantages of investing in an IEO
The benefits of investing with IEO are summarized below. Please refer to it in the future. Since it is a new form that costs money to develop and is approved by the exchange, it has a certain level of reliability and is easy to understand, so the number of projects being implemented is increasing. It has a promising future and has a high chance of success.
avoid fraud
In the case of an IEO, we will first ask the exchange for review. If the aim is to defraud only money with a fictitious project, it cannot be listed in the first place. We will list after reviewing certain standards and projects, so we will not purchase inferior tokens in IEO transactions.
Open to everyone
Any user who is actually registered on the virtual currency exchange can purchase the virtual currency participating in this IEO. The barriers to entry have been lowered as IEOs do not require a connection with a token issuer. It is easy to trade even for beginners.
large profit?
Projects participating in IEOs are still completely worthless. By investing in that state, if the value soars in the future, you will make a lot of money. Since you can buy at a low price at IEO, if you buy it, you may be able to make a big profit in a short period of time.
Disadvantages of investing in an IEO
There are two disadvantages when users purchase IEO stocks: It depends on the category, but it is not guaranteed that you will make a profit. Depending on the situation, some projects may fail in business, and there may be cases of delisting, so please check it yourself. When deciding where to invest, focus on topics such as industry topics, the possibility of realizing the white paper, the possibility of price increases, and past success records.
Few tokens listed
Since the examination at the time of listing of IEO is very strict, the tokens that can be listed in the first place are quite limited. Due to the strict examination, the number of tokens that can be listed is small, and it is common for investment options to be reduced.
Crash risk after listing
In most IEOs, the tokens sold increase in price after being listed. However, there is no guarantee that this will always be the case. Since the IEO transaction itself is a new transaction, the risk of a crash is also high.
Difference from ICO and STO
IEO has very similar terms to ICO and STO, so some people confuse them and many people make the mistake. So what’s the difference? I have listed the details in advance. IEO is recommended for general investors who are just starting to invest.
| ICO | IEO | STO | |
| User | All | Exchange user | Accredited Investor |
| counterparty | Publisher | Exchange | Publisher |
| investment method | smart contract | Exchange | smart contract |
| Administrator | × | Exchange | × |
| Third party Check | × | KYC/AML | KYC/AML |
| Liquidity | × | 〇 | 〇 |
| transparency | × | 〇 | 〇 |
| Security | × | 〇 | 〇 |
What are ICOs?
ICO is the abbreviation for Initial Coin Offering. It is a method for companies to raise funds by issuing and selling their own new virtual currency. It had become established. In fact, ICO fraud cases accounted for more than 90% of the total, and it was a problem all over the world.
What is an STO?
STO is an abbreviation for Security Token Offering. Security tokens are tokens with securities functions and must meet the requirements of the SEC (U.S. Securities and Exchange Commission) Howye test. This makes it far less fraudulent than ICOs. The Howye test has four requirements: If this requirement is met, it can be treated as a security token. STO was born because there was a need for an alternative to ICO, which has a fraud rate of over 90%. The ICO was almost a hotbed of crime.
- money investment
- Earnings can be expected from the investee
- joint venture
- Expected profits from the work of promoters and third parties
IEOs are safe
IEOs go through cryptocurrency exchange screening anyway, so there are very few scams. At least it is safer than ICO, so you can invest with confidence.
Open a free account
MEXC is a virtual currency exchange that provides IEO services. To use the service, you will need to open an account. Opening an account is free, so you can easily receive services without any risk. Operations began in 2017, and participants can invest from small amounts. Technically, security has been strengthened, and wallet management and transparency are also high. We also deal with sales, so you can apply for bonuses. It is a more popular exchange than Binance, Coincheck, GMO, etc.
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