IEO Performance Report

IEO Performance Report – Q2 2019

OVERVIEW

In the Financial markets, fundraising has come a long way. Especially in the blockchain industry since the 2017 ‘boom’, the crowdfunding mechanism has been evolving.
The fundraising trend in the crypto sphere was ignited by ICOs (Initial Coin Offering), many blockchain firms are choosing the path of IEO (Initial Exchange Offering), to ensure oversight & transparency.

WHAT IS IEO?

An IEO is still technically an ICO, where a cryptocurrency exchange offers a direct listing and launch campaign for a new startup token. IEOs are considered less risky compared to ICOs as it’s in the best interest of the exchange to cater its customer base by doing extensive due diligence. Top & reputable exchanges launch only those tokens which it believes to have a future. Only the members of that given exchange are allowed to participate in the IEOs. Depending on the term & conditions of the exchange, participants may need to undergo know-yourcustomer (KYC) and anti-money laundering (AML) checks.

COMPARISON BETWEEN
IEO & ICO

IEOs ON THE RISE

2nd Quarter of 2019, the cryptocurrency market recorded a growth of 125% in total capitalization with almost $200B injected into the market.

  • In April 2019, IEOs raised $110 million approximately with 34 campaigns.
  • In May 2019, the biggest IEO was hosted byBitfinex. LEO token raised US$1 billion.

TOP 5 EXCHANGES ANALYZED

All the IEOs campaign launched in these exchanges reported record sales with multiple projects reaching their cap in minutes. 50% of the IEO funds flowed into the top 5 exchanges.

Of all the IEOs happened in the 2nd Quarter of 2019, Binance recorded 14.3% of the IEOs campaign in the quarter.
Binance topped the chart with IEOs hosted on its platform returning a staggering 521.5% ROI on an average.
Matic became the top IEO with over 493% ROI on the first day.

KEY OBSERVATIONS:

The IEO mechanism was introduced by Binance in early 2019. Since then, fundraising structure has been booming in the Blockchain Industry.
As the potential participants felt more confident provided by credible exchanges facilitating the IEO, the IEO fundraises increased at an increasing rate. The 2nd quarter recorded total sales of over $1.2 Billion.
The data from the 3rd Quarter will evaluate if the IEO fundraises are still increasing at an increasing rate because there has been an upsurge in factors that contributed to the death of ICOs.
The ICO market boomed & survived only for a total of 3 quarters, starting from the 3rd Quarter of 2017 to the 2nd Quarter of 2018 and since then interests of the investors are at a constant decline.

WILL INITIAL EXCHANGE OFFERING’S FOLLOW THE SAME TREND AS ICOS?

The IEO market is currently following a cycle :

  • Investors are buying a new asset in expectation of price inflation, which in turn increases demand.
  • Increased demand hence converts into the increased price that attracts new users, developers, nodes and on-chain activity which increases the price.
  • Increased fundamentals & price attracts new investors as well as it motivates blockchain start-ups to raise through IEO.

As long as the IEOs respect investor’s expectations the market will keep upsurging resulting in the increasing demand and capped supply.
As the market continues to mature, we will witness this play out

COINSFLARE