For a few years now, analysts and others have been looking closely at an initial coin offerings or ICOs as a primary way to debut a new coin in markets.
Now, there are indicators that a different kind of ‘going public’ is taking over as experts see renewed interest in a type of project called initial exchange offerings (IEOs).
A press release today from Coinintelligence shows that the company plans to unveil an IEO list with the intention of helping to build resources for investors
In an initial exchange offering, the exchange acts as the central counterparty.
In a Medium piece from March of 2018, Gene Yan Ooi goes into the ways that IEOs work:
“An Initial Exchange Offering (IEO) relies on having an exchange (or set of exchanges) function as the counter-party,” Ooi writes. “Developers mint the project’s tokens and send them to the exchange, which will then sell the tokens to individual contributors for Ether. Subject to the agreement between the developers and the exchange, conditions traditionally found in an ICO can be emplaced in an IEO. These conditions include capping the contribution per individual and having a fixed price per token. From the perspective of a contributor, instead of sending Ether to a Smart Contract governing the ICO, each IEO participant has to create an account with the exchange and send ETH to this account. When the IEO commences, the participant can purchase the token directly from the exchange.”
There are several benefits to an initial exchange offering, including various types of confirmation and a centralized place for people to shop. As Ooi points out, the exchange also does its own “due diligence,” which serves to support the developer’s work. Also, as applicants pass Know Your Customer (KYC) tests, the coin gains further legitimacy.
Coinintelligence leaders have seen a lot of growth in the IEO strategy:
“It seems like interest in IEOs has exploded almost overnight,” said Coinintelligence Founder and CEO On Yavin in a press statement. “We knew we had a duty to make it easy for our users to find information on IEOs and the exchanges offering them.”
“As always, our goal is to provide the community with all the data they need,” added the company’s CSO, Hosam Mazawi. “Many people come to our site looking for information on ICOs and exchanges, so it was a natural decision to collect all of the ongoing IEOs in one place as well.”
This news is interesting to many investors because of how ICOs have been treated by regulators and in the markets. Initial exchange offerings could represent a new way to move forward and open up the market for more coins, more exchange options and more investor activity. All of that could snowball into what finally makes 2019 the ‘year of the blockchain.’