ICOs have plummeted since December to only a fraction of the money raised the previous two years. This has been in large part to scammers that have burnt investors and governments acting accordingly. ICOs are banned in many parts of the world, making the investor pool much smaller than it was before – while at the same time locking the door for companies who might otherwise take the plunge.
This has to lead to a new innovation in the form of IEOs. Initial Exchange Offerings are similar to Initial Coin Offerings in one way – they both offer companies a way to sell tokens to raise funds for their venture. Where they differ is that an IEO is an exchange listing at the same time. IEOs have become a buzzword recently, and there have been a number of exchanges that have been thrust into the limelight due to their Initial Offering products.
Binance, for example, has set the bar when it comes to doing an IEO. Their work with BitTorrent and Tron has set a gold standard for others to follow. Everything from marketing to listing to due diligence was done as close to perfect as could be.
That doesn't mean there aren't problems with the IEO craze. The biggest problem is the FOMO fueled frenzy of people who simply do not want to miss out on this new innovation in the same way they missed out on the ICO craze.
That is leading to more and more investors that are buying into IEOs with little to no regard for the underlying product, protocol or team that lies behind the project they are investing in. One of the main problems with ICOs was that unscrupulous actors started to take advantage of the hype – and while many might think that this is impossible with IEOs, think again.
While many claims to do the due diligence for you, their beloved customer, it is not always done properly. The companies that are launching IEOs put stern warnings that these launches are not endorsed by the company doing them. That should say enough about them to get people to sober up and focus on investing fundamentals.
If it were that easy, the ICO market would never have failed. People are looking at the work exchanges are doing, and are ignoring the fact that their decision needs to be based on their due diligence. At least ICOs were honest – if you didn't bother to look at the underlying whitepaper and try at least get a grasp on the tokenomics of the project, you only had yourself to blame. Now, with exchanges "vetting" projects, it seems many have given up doing their homework and are throwing good money at launches that they would never have considered earlier.
An old school method for raising funds in the cryptocurrency market is a Token Generation Event. They still, to this day, offer a better and more sound exposure to the market than IEOs do. Funding in the crypto space should be about building a community that backs your proposals, not just riding wave upon wave of ever-increasing hype to get as much money as possible. That is what LiquidApps thinks at least, and they offer the soundest pathway to true investment. That means not dreaming of overnight crypto millions and investing in a project that has robust business and technology fundamentals behind it.
It is on the EOS network, and has a Dapp structure to it – and they plan to help other startups fund themselves the same way. A startup that is made to help other companies get funds and for investors to invest wisely. Now that is something worth looking into.
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