Raising funds for businesses in 2019 is no longer an uphill battle. Today, entrepreneurs are spoilt for choice with options such as incubation funds, venture capital, angel investment, and more. But, surprisingly, it is the blockchain-based crowdfunding that has managed to reign supreme.
By offering a decentralized and optimized platform for raising funds, an entrepreneur could not ask for anything more. Unfortunately, scamsters exploited loopholes in funding models like the ICO to run fraudulent projects which in turn shooed the investors away. However, one of the many highlights of blockchain technology is its ability to evolve and overcome problems. It was not long before we found a solution in the form of Initial Exchange Offering or IEO.
As the name suggests, an IEO makes use of cryptocurrency exchanges to list projects and raise funds. Here, the exchange functions as the trusted intermediary and organizes various compliance and rechecks before featuring projects on their platform.
Meanwhile, the entrepreneur can enjoy a breath of fresh air as the exchange conducts processes like marketing (which have their own limitations) and token creation. Finally, investors find it easy to fund these projects because they are verified and the exchange offers better liquidity options on purchase.
IEOs are taking the market by a storm. According to ICObench, more than 30 IEO projects made it to the market since the beginning of the year. Moreover, this new model has managed to raise close to $160 million in funding. In fact, the trend is spreading like wildfire with more and more number of crypto-exchanges launching IEO services.
Let us take a look at some of the top IEOs projects that managed to turn many heads:
BitTorrent: Considered as the pioneer among IEO projects, BitTorrent laid the groundwork for others. In fact, it was among the first to create a record of sorts as the project hit its hard cap of $7.2 million within 15 minutes. More than 59 billion tokens were sold during the session that took place on Binance.
VeriBlock: Organized by Bittrex, this project outsources security protocols to other blockchains. VeriBlock’s IEO managed to sell out in less than 10 seconds after going live and collected its hard cap of $7 million in a blink of the eye.
Fetch.AI: This project uses artificial intelligence and blockchain technology to create an “economic internet” – a place where agents, hardware, software, and any other financial instrument can coordinate and work together. While Fetch.AI dared to reimagine existing systems, its IEO sale was inspiring as well. According to Binance, this project raised a whopping $6 million in a phenomenal 22 seconds.
Celer: This project is a 2-layer scaling protocol that helps entrepreneurs and companies optimize processes such as payments and transactions on any blockchain network. The Celer IEO raised $4 million in an impressive 17 minutes through an ingenious lottery method used by the platform. Here, interested users register for the token sale in advance by placing orders and pledging the proportionate funds. Once the IEO goes live, the exchange will randomly select from the registered users and process their requests.
Harmony: This project aims at optimizing peer-to-peer networking in blockchain, thereby improving their efficiency. Harmony managed to enjoy a bull-run after it’s IEO sale by registering a spectacular 800% growth in value in less than a week.
When pitted against any other crowdfunding method, the IEO boasts of efficiency and profitability. One report suggested that the token sale for an IEO project lasts for an average of 5.5 days. In comparison, ICO projects take anywhere from 95-100 days and do not guarantee of reaching the funding targets. By promising trust and liquidity as well as better trading options, IEO is driving the next revolution in blockchain-based fundraising.