"IEO" is the abbreviation for "Initial Exchange Offering," which means the initial issuance on the exchange. Specifically, it refers to issuing tokens on a cryptocurrency exchange and conducting transactions to raise funds for cryptocurrency projects.
Operation of IEO#
- "Project selects cooperating exchange": The project first needs to cooperate with one or more cryptocurrency exchanges. They need to reach an agreement with the exchange and determine the specific details of the IEO, such as the start date, sales period, token price, and sales quota.
- "Exchange reviews the project": The exchange will evaluate and review the project to ensure its legality, feasibility, and security. This includes evaluating the project's background, team, technology, whitepaper, and business model. Most exchanges also consider the project's community activity level, and some exchanges may require the project to pay some fees.
- "Exchange announces IEO details": The exchange will announce the upcoming IEO details, including the time, participation conditions, and distribution details of the IEO tokens. This will attract the attention and participation of the exchange's users and investors.
- "Investors participate in IEO": Once the IEO starts, investors can participate in the IEO according to the exchange's rules. The rules of each exchange may vary slightly, but they generally involve holding platform tokens, depositing funds, reaching a certain trading volume, completing some referral tasks, and other similar challenges that benefit the exchange's expansion.
- "Token distribution and listing": After the IEO ends, the project will distribute tokens according to the IEO rules and list the tokens on the platform for trading.
In an "IEO," the project sells tokens directly to the exchange's users, rather than directly to the public. Therefore, compared to an "ICO," exchanges will filter out scams, malicious, or low-quality projects, reducing the risk to some extent.