What is IEO Token? Everything you need to know about Initial Exchange Offering in the crypto world

Initial Exchange Offering: A New Choice for Blockchain Projects

Since ICOs faded out, blockchain projects have turned to IEOs — a fundraising method directly supported by cryptocurrency exchanges. Instead of handling everything themselves like during the ICO era, new projects can now rely on exchanges to both vet and sell tokens to investors.

What is an IEO and how does it differ from an ICO?

An (Initial Exchange Offering) (IEO) is a process where a new crypto project uses a trusted cryptocurrency exchange to raise funds. Unlike ICOs, where the project itself manages the token sale, the exchange acts as both a listing platform and a manager, overseeing the entire token issuance process.

The main benefit of an IEO lies in the exchange’s responsibility. Before an IEO, everything must undergo thorough checks: the project’s white paper (white paper), business model, technology, team — all are scrutinized by the exchange. Any oversight could damage the exchange’s reputation, so they are very cautious. This makes IEO tokens generally considered more reliable than tokens issued during ICOs.

How does a project conduct an IEO?

To be accepted for an IEO, a blockchain project must complete a series of complex procedures. First, the project needs to provide basic information:

• Demonstrate there is genuine market demand for their product/service
• Present a clear, executable business model
• Explain how their technology has practical applications
• Provide a detailed white paper covering issues, solutions, products, technology, leadership, and development roadmap
• Meet other requirements of the exchange

Additionally, the project must clearly define: whether the fundraising goal is fixed (hard cap) or flexible (soft cap). Once everything is prepared, the developer chooses a suitable exchange to carry out the IEO. These exchanges not only support the project but also provide a community of investors ready to buy tokens early.

Leading exchanges hosting IEOs

Currently, many exchanges run their own IEO programs, each with unique features:

A top global exchange with advanced technology, excellent user experience, and extremely high liquidity. This exchange has supported many successful IEO projects such as BitTorrent (BTT), Band Protocol (BAND), Axie Infinity (AXS), Alpha Finance Lab (ALPHA), WazirX (WRX).

Another exchange with high trading volume, applying a pre-registration and batch sale model (batch sale) to ensure fairness.

A third platform positions its IEO program as “Direct Premium Offering” — buyers receive tokens directly in their wallets and can trade immediately with tokens from that exchange.

A fourth exchange allows users with verified accounts to participate, following the “register first, buy first” principle.

Why do projects choose IEO?

Raising funds for new blockchain projects is very challenging. Like in any industry, blockchain companies face fierce competition to attract investors. Not everyone has the capacity to raise capital through traditional methods.

IEO addresses this effectively. First, an IEO project can directly access a crucial investor segment: those already active in the market, especially long-term holders. Second, the oversight from the exchange helps the project “borrow” some of the exchange’s credibility. Investors trust the exchange, so they tend to trust projects verified by the exchange.

In fact, IEO tokens are sold very quickly, and immediately after the sale ends, tokens are listed on the exchange.

Notable IEO projects

Since IEO’s inception in 2017, many projects have successfully raised billions of USD in total.

BitTorrent — a data sharing blockchain platform, raised over $7.2 million in just 15 minutes.

Veriblock — raised $7.0 million.

Fetch.AI — raised $6 million in only 22 seconds, demonstrating strong community support.

On a major exchange, dozens of IEO projects have generated huge profits for investors (over 30 times). For example, Elrond delivered a return of 212 times within two years.

Opportunities and risks — Two sides of the same coin

Although each IEO token undergoes thorough vetting, no investment is completely risk-free. IEO projects may fail to meet their goals, leading to significant token price drops.

A 2019 study of 15 IEO tokens showed that only 4 (26%) provided profits to investors. The average loss for tokens was -53%, while the average profit among the 4 profitable tokens reached +209%.

LEO token raised the largest amount but had very modest returns. It has only 1,754 holders across all blockchains, with the lowest trading volume-to-market cap ratio. Its daily trading volume is about 10 times lower than BitTorrent.

In contrast, Matic currently has the best performance, with a trading volume-to-market cap ratio of 103%.

Notable IEO tokens

Polytrade

• IEO Period: August 16-17, 2021
• Symbol: TRADE
• Platform: Ethereum (ERC-20)
• Tokens for sale: 1,666,666 TRADE
• Total supply: 100 million TRADE

Polytrade is a revolutionary platform transforming trade finance with blockchain. It connects buyers, sellers, investors, and insurance companies to provide timely credit with favorable interest rates. Polytrade converts real invoices into tokens and integrates them into DeFi.

ARNO

• IEO Period: December 6, 2021 – January 31, 2022
• Symbol: ARNO
• Platform: Ethereum (ERC-20)
• Tokens for sale: 4 million ARNO (8%)
• Total supply: 50 million ARNO

ARNO aims to create a secondary energy source for households and industry using nano-carbon materials and electric batteries. The ARNO token is used to support project development and can be traded with major cryptocurrencies like BTC and ETH.

FOHO

• IEO Period: August 27, 2021
• Symbol: FOHO
• Platform: Major exchange
• Tokens for sale: 85,000,000 FOHO
• Total supply: 1 billion FOHO

FOHO applies blockchain to the real estate market. Its goal is to build a fractional ownership real estate marketplace, emphasizing community intelligence to find better investment opportunities.

( Torum

• Symbol: XTM
• Platform: Leading exchange

Torum is a social media ecosystem designed specifically for the crypto community. It offers blockchain marketing tools, helping projects expand their reach and connect directly with users. Torum integrates NFTs, DeFi, market data, and industry news.

Conclusion: Caution is still necessary despite vetting

Since IEO tokens are thoroughly vetted, the number of tokens issued via IEO each year is limited. This helps investors avoid scams and provides more time to research and evaluate tokens.

However, the profit rate of IEO tokens remains relatively low. Overall, the IEO market is on a promising development path, but it still carries significant risks.

As an individual investor, you must understand that not everyone should invest in IEO tokens. You need to research and evaluate carefully before putting money into any project. Capital investment can bring profits but also involves risks that must be considered. Smart actions today will help you avoid unnecessary losses in the future.