Initial Exchange Offering (IEO)

An Initial Exchange Offering (IEO) is a fundraising method where a cryptocurrency exchange acts as the intermediary between a blockchain project and investors. Unlike ICOs, where projects manage token sales independently, IEOs are hosted on an exchange platform, which vets the project and facilitates the sale.

How It Works

The exchange lists the project’s tokens, handles compliance, and manages the sale process. Investors buy tokens directly through the exchange, often with accounts that have completed KYC verification. This process builds trust and can offer a more secure and streamlined fundraising experience.

Why It’s Relevant

IEOs gained popularity for reducing scams associated with ICOs. The exchange’s involvement adds a layer of legitimacy, and projects can benefit from immediate exposure to a large user base. However, centralized control by the exchange means less decentralization.