IEOs June 2019 Insights: The New Vehicle For Blockchain-Based Funding

IEOs June 2019 Insights: The New Vehicle For Blockchain-Based Funding

Initial Exchange Offerings “IEOs” are now the hottest movement of the cryptocurrency fundraising landscape. This new instrument allows ICOs or STOs to be carried out via one or more crypto exchange platforms.

Initial Exchange Offering emerged as a new format for fundraising in the Crypto Finance ecosystem, by which an ICO / STO is basically conducted on one or multiple platforms of crypto exchanges. First IEOs already took place in 2017 (e.g. Bread, Gifto) - nonetheless, this fundraising method did not significantly capture market share until early 2019. Digital assets reached their lowest market capitalization in 21 months in February 2019. However, the crypto markets started growing again and the market capitalization more than doubled ($262 billion) by the end of May 2019, and further surged to $363 billion at the time of writing.

Between January and May 2019, a total of 250 token offerings were completed and around $3.3 billion in capital was raised.

"The development of IEOs has accelerated significantly since the beginning of 2019. It reflects the creativity and innovative spirit of the crypto industry and shows that the demand for simple and secure solutions is growing. IEOs show that fundraising via crypto currencies is becoming more established and striving for greater institutionalization and credibility,” Dr. Daniel Diemers, Head of Blockchain EMEA at Strategy&, PwC’s global strategy consulting business, said.

Largest conducted crypto offerings were Bitfinex (USD 1 bn) and GCBIB (USD 143 mn), jointly accounting 35% of total raised funding volume throughout the first five months of this year.Summer 2019 Edition

Source: PwC Strategy & ICO Report Summer 2019

Despite different exchanges having different procedures and processes, one thing is for sure, IEOs are only becoming more popular. The general IEO process has several stages:

  1. A future investor, who wants to finance a rewarding project, opens a special account on the exchange after going through the KYC identification procedure.
  2. If many investors are interested in the token, organizers can choose the most attractive investors for the further promotion of the project. These investors get a discount with beneficial trade conditions.
  3. The investors pay with cryptocurrency for the token and get the tokens credited to their accounts.

Source: PwC Strategy & ICO Report Summer 2019

"Aspects such as key custody, KYC/AML and new capital requirements are major issues in today's crypto ecosystem. A market for new procedural solutions is emerging to protect digital assets and meet regulatory requirements,” - CVA President Daniel Haudenschild said.

An IEO is truly the new ICO since it saves you the trouble of handling the token sale and distribution, the KYC/AML procedure, and many more issues. It is a smart way to raise funds for your venture and create a demand for your token in the long run.

Priority Token can take you through this journey and make it comfortable for you by taking over all the hard work that has to be done. Want to qualify for an IEO? Contact us to get a quote!

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