entrepreneurs looking to raise capital through sales are still navigating through a difficult regulatory landscape. Different countries still view and quite differently and finding the right location to capture the most investors is tricky.
ICOs have been an undoubtedly positive force for , giving exposure and capital to projects that have pushed the industry forward. Even so, they have been known to have issues with transparency and security, putting them at odds with regulators.
However, crypto exchanges are improving on the original model with the initial exchange offering (IEO). By managing the sales for projects, exchanges provide greater compliance, and give investors trust that projects are likelier to succeed thanks to extensive due diligence. With more exchanges joining the growing trend, IEOs may be a major influence for crypto .
Exchanges Pave The Way Ahead With IEOs
In typical fashion, to the original ICO model. A exchange shoulders responsibility for vaulting all obstacles in the way of young projects. Regulations are just one aspect of this battle, as must carefully monitor their marketing language and advertising (the expectation of profit might alter a ’s asset classification). Additionally, they must create and manage an issuing smart contract, host the crowd successfully, identify destinations for listing the new , and then finally manage their growing economy while pushing past technology milestones.
As changing trends make this process more difficult to undertake successfully, exchanges have leveraged their role as the primary beneficiary of crypto’s bull markets to use their capital and extensive reach to upgrade the fundraising model. IEOs issue directly to a captive audience (exchange members) using their own user wallets and list the on the exchange itself for instant liquidity. They also deploy exchange resources to help projects finish their unique compliance checklist for wherever they intend to launch, leaving young entities to focus exclusively on their solution.
New Entrants Help IEO Market Expand
The IEO concept was first pioneered by ’s Launchpad, which offered a more cost-effective platform for projects. In the time since, several other major exchanges have launched their own IEO platforms, including Bittrex and Huobi.
, BitForex, is quickly catching up with some intriguing IEOs on the docket. The exchange’s Turbo platform has already launched four IEOs and is set to release its fifth with events marketplace .
The company’s EVED coin unlocks a central hub for the various stakeholders in event planning—promoters, talent, caterers, suppliers, events, and sponsors—to find each other and collaborate seamlessly without intermediaries. Evedo has already launched an alpha version and is gaining traction locally in its home country of Bulgaria.
BitForex has also recently launched , the First Islamic Crypto Exchange (FICE), as well as investment , with both showing promise in the early IEO stages. Outside of BitForex, some of the most successful launches so far include BitTorrent and Kamari, both of which surpassed $7 million in funds raised.
A New Direction For Blockchain Capitalization
Even though the regulatory market is across the globe, IEOs offer a glimpse into how can advance its path towards greater compliance and transparency. While ICOs provided the sector the independence it craved from traditional venture capital and lack of control, they left some questions unanswered.
The biggest advantage exchanges can deliver to both investors and traders . Because they depend on their name and image, crypto exchanges are likely to back projects with bigger chances of success while meeting more stringent regulatory and compliance standards.
There are already an impressive number of IEOs in various states of progress, but it’s clear that this is definitely a new trend to keep an eye on. As finds new ways to add legitimacy and transparency to projects and capital raising, it’s also likelier to find greater mainstream respect and .
Most importantly, IEOs reflect a conscious effort by an industry that has largely fought against in the past to finally accept that it must meet regulators halfway to ensure its longevity. As more exchanges come around, IEOs could become the key way for retail investors to safely back promising projects and participate in the sector with greater assurances.
Published at Thu, 18 Apr 2019 23:21:35 +0000