ICO and IEO - What are the differences?

By ukay | cryptologger | 20 Apr 2019

For a layman or noob in investment , these terms can be confusing. If you see the current trend, exchanges have started to offer new coin/token sale. Previously, one has to transfer ETH, BTC or other crypto directly to ICO companies in exchange of tokens. There is no guarantee that your investment is safe. I personally have lost some money. One ICO that I invested just vanished, their telegram and website not accessible any more. Another two ICO returned back the investment with reason that the crypto market is in bad condition. However the market price of the coins that were returned were far too low compared to my initial investment period. I still think that these companies would have profited by selling the coins at higher price and buying back low before returning to investors. You never know...

What is IEO ?

An IEO is still technically a form of ICO, but the main difference lies in where the coin or token is offered. As you might be able to guess from its name, an IEO offers tokens through a partnering exchange, rather than directly to investors. In a public ICO, just about anyone can participate, but in an IEO only members of that given exchange can purchase the tokens. An investor has to complete KYC verification ( normally 2-tier) in order to take part in the token purchase.

What are the advantages of IEO ?

1. You can be sure that the tokens will be listed on the exchange. Some ICOs have never got listed !!!

2. The investor has an option of selling the token through the exchange. Hence it provides better liquidity

3. Investor can feel safe because exchanges would have done some background check on the issuing company. After all, it’s in an exchange’s best interest to not burn its customer base by issuing dodgy tokens.

4. Difficult for illicit investors to participate due to KYC and AML ( Anti Money Laundering) checks

No matter what, you should always remain cautious of the exchange you’re buying from, and the potential motivation it might have for listing an IEO. There were cases where some exchanges accept lots of mony to list certain tokens in the past.

Cryptocurrency ICO IEO

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ukay

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