IEO is just old wine in new bottles of ICO, not a fundamental model "innovation"

When a new currency comes online, it can increase by 5 times. This kind of thing seems to only happen in the bull market of 2017. At that time, ICO was in full swing. Basically, any new currency that came online could easily increase by 3 or 5 times!

However, the high profit returns of all living beings have torn off IC Europe's underpants, everyone is talking about it, and IC Europe has been "stigmatized". As ICO fraud continues and the market turns into a bear market, the currency circle is in a state of decline. But there are still people who are unwilling to accept it and hope to change this situation through various "innovations".

Transaction mining led to a wave of exchange craze, but this craze went away quickly, and FT also disappeared on the way to zero; the STO concept proposed later did not cause any waves, and there was not even a real project that was implemented; Before New Year's Eve in 2019, Binance launched the IEO mode, and tokens were crowdfunded directly on the platform. At that time, most people turned a blind eye to the news, but BTT, the first token listed through IEO, increased five times at the opening, and IEO was instantly taken seriously.

Changpeng Zhao, founder of Binance Exchange, once said in an interview: "The core of IEO is to find good projects...Binance welcomes other exchanges to copy us." "The leeks who are already well versed in the tricks have clearly seen that those who can dominate the hot headlines in the currency circle basically have the attribute of "cutting leeks". ICO is Europe, trading mining is, STO has not yet been implemented, so is the current IEO?

IEO is the abbreviation of the English phrase "Initail Exchange Offering". Its appearance means that the team that issues the currency saves the process of raising funds from the public and directly puts the tokens to be issued on the exchange for users to buy and sell.

It can also be said that IEO skips the process of subscription and fund raising, allowing new currencies to "air-drop" directly to exchanges, and users can buy and sell directly on exchanges. Precisely because IEO skips the process of fund raising and subscription, in many countries with strict European ICO supervision, currency issuance teams will choose to use IEO to directly issue their own tokens.

On February 25, BTT’s “miracle” was staged again, with the Fetch.ai project raising $6 million within 22 seconds on Binance Launchpad.

In fact, Launchpad is not a new face. It is a blockchain project fundraising platform launched by Binance as early as 2017. In the same year, two projects, Gifto and Bread Wallet, conducted IEOs here and became famous for a while.

After a year of silence, Launchpad returned with a high profile, as if it was another dose of "good medicine to save the market." The exchanges regained their fighting spirit, and platforms like Launchpad followed one after another.

On March 7, Huobi announced the launch of Huobi Prime, stating that it will provide fast, compliant and comprehensive currency listing services for global projects around the platform currency HT;

On March 9, BitMax announced the launch of token pre-sale. The decentralized oracle network DOS Network will pre-sell 5 million DOS tokens through BitMax to raise funds for the project;

On March 12, Bittrex International, a subsidiary of Bittrex, announced the launch of a token issuance platform similar to Binance Launchpad. South Korean blockchain startup RAID will provide it with 17 billion XRD tokens for issuance.

But behind the seemingly good news, IEO has been accused of "changing the soup without changing the medicine", and its end will not be any better than that of ICO.

Compared with ICO, IEO's currency listing cycle is shortened, and the cooperation between exchanges and currency issuers is closer. The exchange assumes some responsibilities for fundraising, currency issuance, and trading. When the interests of both parties are bound to each other, and both the exchange and the currency issuer participate in the marketing of the token, the project party and the exchange can easily control the price.

In addition, in an IEO, a small group of people will fully accumulate funds at the beginning and hold a large number of tokens. In a normal scenario, the exchanges with more than one token will double and the price will rise sharply. Then a small group of people with a large number of tokens in their hands can directly arbitrage. The amount of token circulation directly determines the rise and fall of currency prices. Concentrated selling will inevitably lead to a decline in currency prices. In this process, those retail investors who have not grabbed the "sofa" and are anxious to get on the train become cannon fodder.

For project parties and exchanges, IEO is a low-risk, high-yield model. Moving the public offering process to the exchange can not only attract customers, but also drive the rise of the platform currency. But in essence, IEO is just ICO old wine in new bottles, not the fundamental "innovation" of the model.

Some foreign institutional investors believe that IEO is just a way to create bubbles in token prices before STO legislation is passed. However, from an investor's point of view, the potential investment return of IEO is very high. Even though its survival time may not be too long, it is profitable. As long as the knife does not fall, everyone wants to take a bite of the meat.

(Source: UP Chain Parameters)