ICO IEO Rating and Review
ICO IEO Rating and Review In the following article, we are going to explain the concept of “ICO”. Initial Coin Offering (ICO) is a way to raise capital and investment opportunities. The tokens (the same digital currencies) of a project are sold before launching the project, and people can buy tokens before the project starts. In ICO’s case, tokens from a blockchain-based project will be used in the future, which theoretically increases its value if the project is successful.
Participants invest in the project using other digital currencies (often Bitcoin or Ethereum) or common currencies (dollars or euros) and receive tokens for their money. It may be interesting for those who have been active in the stock markets that the ICO has many similarities to the IPO (An Initial Public Offering).
An example to understand ICO’s concept
To better understand the ICO’s concept, see the following example in the “ICO IEO Rating and Review” article. The names are entirely hypothetical.
A software engineer named Mr. X comes up with an exciting idea to implement using decentralized blockchain technology. Suppose his vision is to build a decentralized platform for advertising. He calls his platform tokens “Xcoin”, with which advertisers can pay their advertisers. So Xcoin is a functional token that if the platform users increase, the token price will also increase.
Mr. X assembles his team to implement his idea as soon as possible. But there was an easily visible problem. To develop the project, they need a budget and capital. Mr. X has several ways to raise capital. It can contract with a real investor or get the capital it needs by convincing a local accelerator company. But now that Mr. X’s project defines a blockchain and token, why not use an ICO and get help from the general public worldwide to raise capital?
But another problem. How to make and sell tokens when the project is not ready yet? Blockchains like Ethereum, which supports smart contracts, come to his aid. Using the Ethereum platform and smart contracts, he quickly builds up some tokens and sets up a white paper with his team, and places it on the ICO site, along with a series of additional project and team descriptions. But what were white papers? The white paper is a term that has been used in recent years for the crypto project description. Join us in the article “ICO IEO Rating and Review” to explain more about these.
Many investors read about his project and invest in it and get tokens for their money. Now, with the funds raised, Mr. X is implementing his idea and building his Blockchain. Ethereum tokens are then transferred to the leading network, the new Blockchain, through a technical process. The project succeeds, the value of Xcoin tokens is multiplied, and the investors who invested in it enjoy a few hundred percent profits. However, it was a dream come true for a few investors. In the other case, which happens more often, Mr. X, after attracting capital, abandons his project and idea and starts his luxurious life with investors’ money.
A brief history of ICOs
Regarding the first project done under the ICO platform, it should be said that this project was done in July 2013. Ethereum also raised capital in 2014 in the same way, and today this cryptocurrency is one of the most important currencies in the world. In 2017, this type of fundraising became so popular that since the ICO became famous in 2017, about 800 ICOs have been offered, raising more than $ 20 billion. Throughout the history of this type of fundraising, many companies have tried to raise capital in this way. Still, among them, we can mention some examples of the most successful in history. Filecoin [Futures], for example, ranks first with more than $ 25.7 billion. Tezos is in second place with about $ 23.2 million. Also, SIRIN LABS Token with $ 157885825 was able to take third place. The Antidolos Media thanks you for joining us in this. This media also invites you to read more about “ICO IEO Rating and Review“.
Severe scams in ICOs
The idea of fraud
What is an initial coin offering (ICO)? The truth is that although ICOs are an exciting idea and can be very profitable, unfortunately, in most cases, they are scams, or the ambitious views of their developers do not work. As a result, the projects have been left without any response from companies. In the article we wrote about “ICO IEO Rating and Review“, we will give you useful information about these scams.
Risk of being scammed
In 2017, many investors suffered huge losses in their dream of becoming rich overnight by investing in ICOs that claimed to solve all the world’s problems. Since there are no specific rules on ICOs in most countries of the world, and since the ICO is an entirely online process and does not require a face-to-face visit, the Ethereum team’s method to raise capital is now a swift idea. It turned out to be a scam. Scammers can easily trap uninformed investors by writing ambitious articles about a dream idea and designing a booming website.
Why aren’t scammers arrested?
Since the investment amount is received in the form of cryptocurrencies such as Bitcoin and Ethereum, due to digital currency transactions’ semi-anonymity, it is challenging to track them, and one should not expect to return them almost after sending the money. According to the latest research, about 90% of all ICOs introduced in 2017 were either fraudulent or abandoned after no results.
These days, because of the risks that ICOs can pose to investors, other methods have been devised to replace them, given the distrust of this type of crowdfunding. In the article “ICO IEO Rating and Review”, we will discuss these alternatives. One of these methods is IEO.
Alternative methods of ICO
More than a dozen alternative methods have been introduced for ICOs. But currently, only two or three of them can be done on a large scale. Two of the leading alternative methods that are widely used these days are IEO and STO. In this part of the article “ICO IEO Rating and Review”, we will address these two positions.
Initial Exchange Offering (IEO)
Initial Exchange Offering, or IEO for short, is similar to ICO. The difference is that in an extensive exchange, digital currency is offered, and investors go to the exchange to buy tokens. Exchange offices introduce more reputable items to their customers due to their expertise in this field. Of course, the scam is not closed yet. So, there are unreliable exchanges that have set a trap for their customers. In the following, “ICO IEO Rating and Review ” will be more familiar with this concept.
Unlike the initial coin offering, which is held directly by a project team, IEO is not. An exchange on behalf of a startup manages Initial Exchange Offering, or IEO, to raise the business’s capital for selling the token. Many digital currency exchanges have started accepting IEOs led by Binance Exchange.
Because large cryptocurrency exchanges conduct the necessary checks before pre-selling tokens, the risk of fraud in this method is significantly reduced. The reason behind that is there is an extensive exchange between the investor and the development team. However, as mentioned, not all exchange offices are valid, and exchange offices may also make mistakes.
Since this article’s topic is ICO IEO Rating and Review, you should pay special attention to this position. The reason for the importance of IEOs is apparent. The reason is that most of the transactions in the field of cryptocurrencies are done in this context. Therefore, if you are active in the cryptocurrency market, you must be thoroughly familiar with this concept
Security Token Offering (STO)
Security Token Offering, or STO for short, is another method of raising capital in digital currencies that is very similar to the ICO. But with features that reduce investor risk, it is likely to replace the old methods soon. Follow the article ” ICO IEO Rating and Review ” to get more accurate information about this concept.
Put, in this method of collecting, tokens must be registered as securities that require legal procedures. Given that the law guarantees the validity of securities ownership, in the STO, investors will have a traditional and formal role in advancing the project in proportion to their investment. The developers and project team are also legally authenticated. In this process, the investment risk is significantly reduced, and the developers’ commitment will be significantly more credible. But, the problem with this approach is that the mission that Blockchain sought will not come true. Because the basis of Blockchain was that in transactions, individuals could trade anonymously.
Since this article’s title is “ICO IEO Rating and Review“, in this section, we intend to talk about IEOs. A significant part of this article will explain. After that, by providing information on how to review and rate projects by Antidolos Media, you will be provided with essential explanations, so do not miss this article and stay with us.
These days, we are witnessing the holding of token pre-sales by big exchanges such as Binance. Holding ICOs and token pre-sales on large exchanges has many advantages for investors, and of course, we can not ignore the disadvantages of ICOs. In this part of ” ICO IEO Rating and Review ” article, we will review essential points about IEOs.
As the name implies, an Initial Exchange Offering means offering tokens based on digital currency exchange. Unlike an initial coin offering (ICO) held directly by a project team, an initial exchange offering is managed by an exchange on behalf of a startup to raise capital in the business to sell the tokens.
What motivates exchange offices to hold IEOs?
Because the process of selling tokens takes place on the platform of exchange, token issuers must pay a listing fee, plus a percentage of their token sales to that exchange. Instead, the tokens sold are listed in the exchange immediately after the end of the IEO. Since a portion of these tokens’ sales goes to the exchange, it will have enough motivation to cooperate in marketing and advertising activities. People who participate in an initial exchange offering of the exchange do not send their funds directly to the startup address but instead, open an account in the organizing exchange and buy tokens through the currencies they have in their exchange wallet. Keep in mind that an exchange’s initial exchange offering significantly alleviates concerns that projects may be fraudulent. In the continuation of “ICO IEO Rating and Review“, we will deal with this subject more precisely.
Exchanges that have an IEO platform
Many digital currency exchanges have started accepting IEOs, which, as mentioned before, are led by Binance Exchange. Binance Exchange has launched an initial exchange offering platform called Binance. In this part of the article written about “ICO IEO Rating and Review”, we want to take a look at these exchanges.
In January 2019, the BitTorrent project acquired by Thorne raised $ 7.2 million in less than 15 minutes by selling its tokens on the Binance Launchpad, reaching its maximum capital. Selling tokens in less than 15 minutes for a startup is like a dream. The second IEO held on the platform was a project called Fetch, which reached its maximum capital of $ 6 million in 22 seconds.
Following the rise of Binance Launcher, other large exchanges have developed their own platforms. For example, Bitmax Exchange has set the Bitmax Launchpad platform. OKEx Exchange has expanded its platform. KuCoin Exchange has developed the KuCoin Spotlight platform, and Huobi Exchange has developed the Huobi Prime platform. The image below shows some of the IEO platforms.
What are the main differences between ICO and IEO?
So far, in the article “ICO IEO Rating and Review” we talked about the whole IEO and ICO. In this section, we intend to address the differences between the two concepts.
The ICO and IEO are fundamentally different in terms of various platforms. These platforms include Collectivisation platforms, smart contract management, know your customer requirements (KYC: know your customer) and anti-money laundering (AML), marketing requirements, startup qualifications, and listing time. In the continuation of the “ICO IEO Rating and Review” article, we will point out these differences.
In the initial coin offering (ICO), the collection occurs through the startup’s official website and the token issuer. Still, in an initial exchange offering (IEO), the collection takes place on the exchange platform.
Execution of crowdfunding operations and smart contract management
In an initial exchange offering of coins, the project developers are responsible for this. Still, in an exchange’s initial exchange offering, these tasks are the exchange’s responsibility because the exchange is responsible for paying tokens to its customers.
Customer identification and anti-money laundering policies
The need for customer identification and anti-money laundering policies in the initial coin offering varies greatly depending on the project type. In other words, in some projects, participants may need to provide identification and records to participate in the ICO. Such documents may not be required in other projects, but in an initial exchange offering, exchange offices adopt such policies to open their accounts. , Participation in the project requires the submission of documents.
The cost of marketing and advertising in an initial exchange offering of coins is entirely the development team’s responsibility, and they are required to pay hefty prices to succeed. Still, in an initial exchange offering of tokens, the marketing of tokens is the exchange itself’s responsibility.
Startup Qualification (Scam Reduction Risk)
There are no restrictions on an initial exchange offering of a coin, and anyone can hold an ICO. Still, at the IEO, the exchange office first reviews the project and, after qualifying, issues a crowdfunding license on its platform.
Listing in an exchange
In an initial exchange offering of a coin, the listing of tokens does not occur after the end of the public offering. Still, in the exchange’s initial exchange offering, the token issued in the exchange office is listed after the end of the public offering.
Benefits of the initial exchange offering
In this part of ICO IEO Rating and Review ‘s article, the Antidolos media intends to talk about IEO’s benefits. In this section, join us to explain the disadvantages of this style of offering cryptocurrencies in the next section.
Trust and reduce fraud risk
One of the benefits of IEO is trust. Since the fundraising is done on a cryptocurrency exchange platform, this exchange carefully examines any project that intends to raise capital through its platform. Therefore, not every project can attract capital in this way. As a result, it must have several quality indicators. In other words, it must pass some standards. Exchanges carefully check everything to maintain their credibility and name. These stages put investors who want to participate in crowdfunding several steps further and gives them more confidence. The initial public offering of the exchange can eliminate fraudulent and suspicious projects.
Consider, for example, the initial public offering of the Raid project. Just hours before the initial sale, Bittrex announced that it would not cooperate with the project and canceled the IEO. The reason for this was the termination of the cooperation between the Raid project and the online game data analysis company OP.GG. According to Bittrex, this cooperation played a vital role in the success of the project. When the exchange office became aware of this issue, it decided to cancel the tokens’ sale because it believed that the exchange users would be dissatisfied with this news. For this reason, in ICO IEO Rating and Review ‘s article, we argued that trust and reduced fraud risk are among the benefits of IEO.
The issue of security in the process of selling tokens is crucial. It has happened many times that due to the sales website’s hacking and the manipulation of the address related to the project wallet or any other reason, the money was sent to another address by mistake. Unfortunately, participants have not received any tokens since then. There is no need to worry about security in the initial public offering. The exchange tries to manage the smart contract, which is related to the sale of tokens. Besides, customer identification (KYC) and anti-money laundering (AML) processes are performed by exchanges. These considerations are because most cryptocurrency service providers have such policies to create an account on their platform.
Start-ups that plan to issue tokens to raise capital will benefit from such a flawless and secure IEO start-up process over holding ICOs. Although they have to pay a percentage of their token sales along with some commission fees to hold an IEO, they are instead given the costly and challenging ICO marketing process. Therefore, the budget required for the exchange’s initial public offering is much less than the ICO. In addition, projects can use the exchanges ‘fixed customer base to attract investors’ attention to themselves.
Since listing on an exchange is one of the first transactions in an exchange, start-up tokens are usually listed on the exchange after start-up.
Disadvantages of the initial exchange offering
As we promised you in the previous section of this article, in this section, we want to address the disadvantages of IEOs. Thank you for being with us so far in “ICO IEO Rating and Review” article.
The first weakness that we will mention in the article ” ICO IEO Rating and Review ” about initial exchange offering is undoubtedly the listing cost. However, an initial exchange offering is a safer and more efficient alternative to ICO. But the costs of selling tokens and exchange fees for startups can be high. The cost of listing in exchange is about 20 bitcoins, while exchange offices usually charge 10% of the token sale amount.
The initial exchange offering process may be limited to one exchange. This can be frustrating for investors who do not have an account exchange office, especially in countries where account creation is prohibited. Creating an account also involves the user process and account verification, and both are time-consuming.
There is a fundamental problem with initial exchange offerings because it restricts participants. That is that most coins are in the hands of a limited number, which may later lead to price manipulation.
In a centralized exchange, you do not own your private keys, and most exchanges transfer assets within their preferred platform (if not all exchanges, most are). This is the case with the initial public offering of tokens, as the investor is not the tokens’ real owner.
Increased artificial demand
Most exchanges force users to participate in IEO only with digital exchange currency (such as BNB). This will increase the demand for digital currency exchange and increase its price sharply. This was one of the main reasons for the sharp rise in the price of Binance Quinn.
Antidolos Media thanks you for joining us in ICO IEO Rating and Review‘s article.
Rating and review of crypto projects
As we explained in the previous sections of this article, we wrote about “ICO IEO Rating and Review” in this section of the article about review and rating. Cryptocurrency review means that a reputable media operating in the field of cryptocurrencies, such as Antidolos, reviews projects. Examining projects can have different dimensions. Definitely reviewing various projects by trusted media users can be an outstanding event for investors. In this way, investors can use the experience of more skilled people in this field. Some of these reviews could lead to the disclosure of fraudulent projects. Of course, this does not mean that the review of projects is supposed to be just a scam of projects. Instead, various dimensions, such as investment risk, return probability, and the practicality of the business idea will be discussed. Also, by comparing the advantages and disadvantages of different cryptocurrencies, they can be called a score.
These scores can make some projects more important to us. For example, suppose a reputable media outlet, such as Antidolos, determines that Project X will be more profitable. At the same time, the risk of investing in that project is much lower than in another project. In that case, Project X has a higher score. Will take. This score is given to projects by reputable media and can be an excellent guide for users to invest.
Antidolos media has done its job well. In the next section, not only will you become more familiar with Antidolos media, but we will also tell you more about the advantages of this media over other media. So do not miss the final part of the article “ICO IEO Rating and Review“.
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