At the beginning of last year, the IEO (Initial Exchange Offering) hyped no worse than the ICO in 2017, marking the end of the crypto winter. Little has been heard about IEO but this does not mean that the market has disappeared.
Here's what we can say from experience:
Here's what we can say from experience:
- IEOs are alive. Now a total of 7-10 token sales are held monthly on all crypto-exchanges of the world. Last summer their number was over 30-40 per month, nevertheless, this is not a drop to zero.
- If a year ago the IEO market volume (the total earnings of exchanges from the sale of the primary listing) was $ 2 million per month, now the figure has fallen tenfold but this is still about $200k.
- The overwhelming majority of IEOs are unprofitable for projects. Not only do they don't raise money, but most of them don't cover the fees from the exchange for the initial listing.
- 70% of all IEOs are on 6 cryptocurrency exchanges, half of their founders are Russian-speaking. It's about the number of token sales. If we take the volume of fundraising, then they mainly come from Binance, OKEX and other major league exchanges.
- The cost of IEO is traditionally calculated in bitcoin, and now it averages from 1 to 5 BTC apart from the major market 'league'.
- In 2020, for the first time since the inception of ICO and then IEO, there is no fundraising data on the market. If earlier ICObench, ICO Rating and others monitored the market and gave an assessment, now almost no one does it. And the market has fallen and amounts of raising provided by projects with exchanges are no longer credible.
- The reason of IEOs popularity in 2019 is due to the machinations of Binance. The exchange was the first to conduct an IEO and, according to the conditions, startups were required to send a half of the funds raised to buy/maintain their token. So, the growth of their rate was predetermined, which helped to increase the hype around IEO.
- The IEOs popularity at the beginning of last year strengthened the trend towards the emergence of separate agencies specializing exclusively in listing on exchanges (both primary and secondary). Now they are either leaving the market (more often) or expanding their product line (less often).
- The most popular token sale format is to conduct IEO not on one but 2-3 exchanges in turn or simultaneously. Less popular formats are IEO organizations on only one exchange or a combination of IEO and ICO (when they try to collect some of the funds via personal account on the project website).
- There are 2 reasons why some crypto startups still do IEOs: a) they hope to successfully raise the funds, b) get the legal access to the exchange's client base.
