Today, an Initial Exchange Offering (IEO) is simply a type of Initial Coin Offering (ICO), but the main difference lies in the key fact that IEO is NOT open to the public. In other words, only users of the hosting exchange are permitted to participate in the token sale.
ICO allows just about anyone to purchase the token for sale by sending funds to the hosts address, whereas IEO requires users to purchase the token with the hosting exchange’s accounts.
Since the ICO is open to the public, it is able to raise MORE CAPITAL than the IEO in an ideal world, but the drawback of such a model is that, there is A RISK of scammers exploiting investors out of their money by not delivering the promised technology.
Nevertheless, the underlying issue of the ICO is that it is NOT MONITORED by a third party and anyone can launch the ICO.
On the contrary, with the IEO, the exchange is an administrator in which the project team MUST COMPLY with the requirement of the exchange to launch the token sale. As a result, users are protected by the exchange. To further maintain the users trust, the exchange is required to complete a comprehensive assessment of the project prior to launching the IEO.
To sum up, with the IEO, the exchange not only helps users assess projects and filter out scams, it offers a liquid platform to trade afterwards given that a big chunk of the user base is guaranteed. Additionally, it is a much MORE CONVENIENT platform as users can manage their funds in exchange accounts rather than different wallet addresses.
In terms of project teams, it will LESS LIKELY have to deal with the trouble of operational matters. For instance, in an IEO, users of the exchange have all been examined by the exchange’s KYC/AML verification. The exchange also assists with marketing promotions.
As an end note, which one would YOU prefer? ICO or IEO? The Battle begins..