Initial exchange offerings (IEOs) take place on exchanges so that projects have the opportunity to raise capital through the exchange. Similar to the initial coin offering (ICO), which uses a website via a project’s means, an IEO leverages the power of an exchange.
Since ICOs were banned in 2017 in China, IEOs have become a great alternative, allowing new projects to continue launching and gain more exposure, leveraging the power of an already-existing platform like an exchange that serves customers.
IEOs are beneficial to both potential investors and the projects themselves. For investors, they know the IEO is conducted on a well-known, trusted exchange and understand that it has taken the proper precautions to make sure the project is vetted and safe. This works both ways, as a project participating in an IEO can demonstrate its legitimacy because it has implemented the necessary steps to become eligible to participate in the IEO.
