Will IEOs and SETOs become the new trend in cryptocurrency? An analysis

More and more money is being collected by crowdfunding via regulated crypto exchanges. These so-called IEOs are also increasingly being held. In this article we dive into the figures and show that the IEO is a worthy successor to the ICO.

Many different types of investments

But first, what do all these abbreviations mean?

• ICO: Initial Coin Offering. Keep a crowdfunding on your own. Investors receive tokens.
• IEO: Initial Exchange Offering. The same as an ICO but on an online crypto exchagne.
• STO: Security Token Offering. Shares in the form of tokens.
• SETO: Security Exchange Token Offering. Same as STO but via an exchange.
• IPO: Initial Public Offering. First time a company offers shares through the traditional stock exchange.

ICOs were very popular in 2017 and two years later that market seems to have dried up. The IEO has replaced it. There have been more than 65 IEOs in the last six months. Of these, 40 have reached their softcap (minimum number of tokens they want to sell to start the project) or even their hardcap (maximum number of tokens they spend).

15 new IEOs will be launched in the coming three months. It is striking that half of these new IEOs are from projects that have previously held a successful IEO. With this they try to attract more investors for the second or third time.

All in all, there have been 245 IEOs over the past three years with a combined revenue of $ 3.4 billion.

Multiple IEOs per project

There are advantages and disadvantages to think about why you should start an IEO instead of an ICO. One of the advantages is that you can hitch a ride on the marketing machine of the exchange where you want to sell your tokens. The exchange also has a major financial interest in this.

Take an exchange such as Binance as an example. Not only does a project have to pay a substantial amount to be able to offer their IEO on that stock market, investors can only participate in an IEO if they invest BNB in ​​the project. That is the Binance coin itself.

Exchanges not only stimulate IEOs, but also multiple IEOs. So multiple investment rounds. This is similar to how the regular financial market works: With a IPO, large companies raised money several times.

New concept

Because the cryptomarket is constantly evolving, many projects are considering repeating their IEO rounds, especially if the previous one was successful. There is no name for this yet. Sometimes it is simply called a second IEO, in which case the IEO takes place on the same stock exchange as where the first IEO was held. But there are also so-called multi-lunchpad IEOs. Then a project holds several investment rounds on different stock exchanges.

An example of a multi-lunchpad is Robee. They are busy with their third IEO. Founder Artem Popov:

“When promoting a real product, it is very important to offer it to a large audience. If you really have a strong and interesting idea, you must offer equal opportunities to users from different regions to participate. Performing IEO at different fairs is a perfect match for this purpose. ”

Offer security on exchanges

Another new development is the STEO. Dreamr announced the first STEO ever last month, and it will be held at the IDCM exchange. Chris Adams, CEO of Dreamr:

“IEO has replaced the outdated ICO and has established itself as an all-in-one method to attract investments that meet security standards and serve as a reliable way to issue, offer and sell a token trade. STEO is just an expanded version of IEO that combines the stock market offer with the investment attractiveness of the STO model. I think many traditional scholarships have wanted to do something like that for years. “

ICOs may be brokenly regulated and on the verge of extinction, the market seems to be adapting well. For companies looking for crypto investments, and for keen investors, there always seems to be a place.

Disclaimer: this article is not intended as investment advice. Do good research before you get involved with IEOs and such.