ICO vs. IEO: Everything you should know about them!

Today, there are many ways in which crypto projects and startups can fundraise on the blockchain. Uniquely among them are the ICOs and IEOs as primary fundraising mechanisms on the blockchain. So, what are these ICOs and IEOs in detail and in full? What are their unique features and functions? What is the best platform or mechanism to choose or opt for if you are a business or startup on the blockchain?

In this blog, we critically analyse these two fundraising mechanisms. We offer you their unique differences while highlighting their positive contribution to fundraising on the blockchain.

What is an ICO? What are its functions and features?

ICO stands for initial coin offering and is a type of crypto fundraising method on the blockchain. The method involves the issuing of new cryptocurrency tokens to investors in exchange for established cryptos like Bitcoin or Ethereum. The funds raised through initial coin offerings are then used to develop the crypto project. There are also many benefits to using an initial coin offering, including:

• ICOs offer open, democratic, and better access to capital for startups and businesses on the blockchain.
• ICOs streamline the fundraising process and reduce administrative costs and other regulatory hurdles.
• ICOs offer higher liquidity options with a global platform and reach for investors.
• ICOs provide investors with numerous opportunities for early-stage stakeholders in innovative projects and offer great potential returns.
• ICOs promote better token utility and ecosystem development as they are more fundraising platforms offering token launching and distribution.
• ICOs are essential to innovation and community engagement on the blockchain network.
• ICOs are a viable alternative to traditional funding methods for businesses, startups, and projects on the blockchain.
• ICOs offer multiple asset classes for investment, and investors can easily diversify their portfolios.

What is an IEO? What are its features and functions?

IEO in full is known as an initial exchange offering and is a fundraising mechanism for blockchain-based companies to raise crucial funds on crypto exchanges. In initial exchange offerings, fundraising is done on a cryptocurrency exchange. There are several benefits to using an IEO, like: The cryptocurrency exchange is responsible for the evaluation of the IEO project.

• Exchanges help attract potential investors and manage the entire distribution of tokens.
• IEOs are beneficial to both potential investors and the projects.
• Investments on IEO are done on reputed, well-known, and trusted exchanges with all the right precautions for authenticating participants.
• IEOs show legitimacy as they implement all the necessary compliance steps for eligibility to participate in the IEO.
• IEOs provide platforms with ready-made user bases.
• IEOs offer projects and startups a zero burden of marketing costs.
• IEOs offer high credibility since crypto exchanges do due diligence on the projects.

Differences between an initial coin offering and an initial exchange offering

1. With an ICO, tokens are listed on the exchange in a few days, and then the tokens are sold. In an ICO, tokens may not be listed on the crypto exchange; rather, they are listed after the token sale ends. IEO token sales happen on a crypto exchange; only users who have an account on the exchange and have been verified can become investors.
2. With an ICO, developers conduct marketing campaigns using paid ads, forums, social media channels, and other marketing platforms. With IEOs, the cryptocurrency exchange is fully responsible for its success.
3. ICOs are fully on decentralised platforms. IEO's are under centralised control, like an exchange. The ultimate purpose and aim of ICOs and IEOs is to diversify the fundraising mechanisms available for crypto startups and businesses on the blockchain.

Closing Summary

If you are new to the blockchain or cryptocurrency market, it can be daunting. That’s why an expert ICO development company and IEO solutions provider are crucial to achieving your fundraising goals and objectives securely and transparently. Technoloader has acquired wide expertise, reputation, and professional competence as both a trusted ICO marketing company and a reliable IEO development company in India. Whatever your fundraising plans on the blockchain, adopt the most skilled and experienced developers for great results and assured success.