[Gate.io: For Beginners] What is an IEO? Difference from ICO and STO


Many people often hear the word IEO on virtual currency exchanges. This is because all major virtual currency exchanges handle it. If you want to earn money through an IEO, you should definitely refer to this article. There are not only IEOs but also ICOs and STOs, so you should keep them in mind at the same time.

What is IEO

The abbreviation for Initial Exchange Offering is IEO. A company that wants to raise funds issues a token and entrusts its sale to an exchange. On the premise of listing and selling, the exchange will investigate not only the tokens to be issued but also the coins, and if there are no problems, the exchange will conduct an IEO for its own users and sell new tokens. . This is a great advantage for development projects that can advertise coins. The funds raised will be used to advance the development of the project. Gate.io has a similar system called Startup. If you are interested, please refer to it.

What is an ICO

ICO stands for Initial Coin Offering and is a method of selling tokens that could be said to have been popular before the IEO. ICO is a mechanism in which each company publishes a branded project on the Internet, and investors purchase tokens in virtual currency. However, in reality, there are many cases of escape after collecting funds, and it became a big problem with the fraud rate exceeding 90%. As a result, ICOs declined at once, and instead, IEOs, which require exchange surveys, became popular. ICOs start selling without any investigation, but IEOs are more reliable as they are investigated by exchanges.

What is STO

STO is an abbreviation for Security Token Offering, and it is a mechanism that sells only tokens that are defined as “securities” such as stocks and real estate. STOs must comply with the laws applicable to securities, so they can be sold legally. Since securities that cannot be handled by IEO are handled on the blockchain, there are many people who also use STO. The big difference between IEO and STO is the presence or absence of a securities system. Tokens issued in IEOs do not have securitization.

Benefits of IEOs

Gate.io has a startup system that is very similar to an IEO, but what are the benefits of this?

Exchange will review

In the case of an IEO, an exchange investigation is always included. Unlike ICOs, we do not sell dubious tokens without investigation. This means that it is very reliable. We carefully check the technical capabilities and the soundness of management, and only after it is judged that there are no problems will we go public and sell. In other words, you cannot participate in the IEO unless you have the selected coin.

Decided to go public

In the case of IEO, the exchange is OK, so it’s like the listing is decided. In the case of ICO, there were many fraudulent coins that did not know whether they could even be listed in the first place. In an IEO that involves an exchange, the listing has already been decided, so you can invest with confidence.

Any user can participate

An IEO has the advantage that any user of the exchange can participate. In the case of IEOs, there are no difficult participation conditions. Anyone can participate in an IEO. Many people want to participate, but it is decided by lottery whether they can participate or not. Exchanges also have the advantage of being able to gather a large number of users by implementing IEOs.