An Initial Exchange Offering (IEO) is a cryptocurrency fundraising method conducted through a centralized exchange. Unlike an Initial Coin Offering (ICO), where projects sell tokens directly to investors, an IEO involves a partnership with a crypto exchange, which acts as an intermediary to facilitate the token sale.

In an IEO, the exchange takes responsibility for listing the token, vetting the project, and providing a platform for users to participate. This gives investors more confidence because the exchange conducts due diligence on the project, adding a layer of trust. Additionally, the exchange handles all technical aspects, such as smart contracts and token distribution, making it easier for projects to focus on development.

One of the primary advantages of an IEO is increased security and reduced risk for investors. Since the exchange vets the project, it offers better protection against scams and fraudulent projects, which were common in the ICO era. Furthermore, tokens are typically listed on the exchange immediately after the IEO, providing instant liquidity.

Investors typically need to hold the exchange’s native token to participate in the IEO, adding value to the platform. While IEOs offer benefits for both projects and investors, they still carry risks, such as market volatility and potential regulatory scrutiny.

An Initial Exchange Offering (IEO) is a fundraising method used by cryptocurrency startups, where tokens are sold directly through a cryptocurrency exchange platform. Unlike Initial Coin Offerings (ICOs), where projects raise funds independently, IEOs are conducted with the involvement of a trusted exchange, which acts as the intermediary.

In an IEO, the exchange screens the project, handles the sale of tokens, and promotes the offering to its user base, increasing credibility and security. This benefits both the startup by providing access to a ready audience and investors by ensuring a level of vetting by the exchange.

However, IEOs often involve higher fees for the project and are centralized, as participants must use the specific exchange’s platform to purchase tokens.