Initial Exchange Offerings (IEOs) have taken 2019 by storm. Following 2017/18 Initial Coin Offering (ICO) craze, IEOs are becoming a new mania which is capturing the middle ground between promising projects and eager investors.
IEOs are exciting phenomena. They are more secure than ICOs, more accessible than security token offerings (STOs), and there’s particular due diligence done by the IEO platform before listing the projects. All these factors raise investors’ confidence in the projects, which results in millions raised in seconds, overbooked platforms, and new, promising projects and coins entering the cryptoverse.
Desirable characteristics of IEO platforms
In our “What is an IEO?†guide we’ve counted more than 32 IEO platforms. All of them are different, and some of them are better than others. One must mind that most exchanges have a monetary incentive to launch as many IEOs as possible as they make good money by doing so. This raises a fundamental question – which IEO platforms are the best?
These are the key factors to pay attention to when choosing an IEO platform:
- Exchange/platform reputation. Credibility and reputation of exchange are the most crucial factors when choosing an IEO platform. Since exchanges vet all IEO projects, you have to trust them completely. IEOs provide lucrative opportunities for the exchanges, and all IEO profits come from eager investors like you. Therefore, you have to look for exchanges that are genuinely focused on the quality of the projects instead of useless token sales. Always do your own research (DYOR).
- Ease of use. Participation in an IEO should be as frictionless as possible. Unlike ICOs, IEOs are mediated by the exchanges, so it is their responsibility to make it accessible even for novice investors.
- Liquidity. A solid IEO platform should have an abundance of investors willing to trade the token. Remember that an IEO token is listed on its exchange almost immediately after the IEO, so you want to be sure that you have no issues when selling it later.
- Security and stability. IEOs attract many investors from various backgrounds, so the IEO platform must be robust and secure. No one wants to risk losing their funds to an incompetent exchange, which is prone to all sorts of cyberattacks, technical glitches, or bad performance.
- Multi-coin support. IEOs are an increasingly popular way for exchanges to increase the value of their native token. However, most investors don’t want to be limited to one or two coins when investing, so having multiple options definitely helps.
Based on these criteria, we’ve selected the top 5 IEO platforms that are worthy of your attention.
1. Binance Launchpad
Binance Launchpad is the pioneering IEO platform which launched in 2017 just to become mainstream in 2019. It had many successful IEOs, including Matic Network (MATIC), BitTorrent (BTT), Celer Network (CELR), Fetch AI (FET), Bread (BRD), and others. At pixel time, the average ROI for Binance IEO investors is nearly 580%.
Binance Launchpad is arguably the best token launch platform on the market. It is backed by one of the top exchange’s in the world and is led by a class act Changpeng Zhao. The launchpad is powered by leading technology (capable of processing over 1,400,00 orders per second) and high-level partnerships, which bring an abundance of investors to every token sale. Hence, liquidity is rarely a problem with Binance.
In fact, Binance’s Launchpad has attracted so many investors it had to introduce a “lottery method†to give everyone equal opportunity to invest. In most cases, investors must purchase BNB (Binance’s native token) to participate. Besides, the platform supports all sorts of languages and devices, making it easier to invest in IEOs regardless of where you are.
In sum, Binance Launchpad is both a pioneer and a leading IEO platform in the market. Although it requires luck and BNB tokens to enter a sale, its solid relationships with industry leaders, high-profile investors, and industry-leading advisors make it a high-quality platform, which is why it tops our list.
2. Gate.io Startup
Gate.io Startup offers an initial exchange offering platform that also offers an opportunity to purchase blockchain assets at a discount. As a result, it’s offerings come with three distinct labels:
– Initial exchange offering (red label). Used for crowdfunding and launching new crypto and blockchain projects into existence.
– Noninitial exchange offering (blue label). Used for crowdfunding existing blockchain and cryptocurrency projects that would like to exchange some of their coins for extra funding.
– Discount deals (orange label). Gate.io startup also offers you an opportunity to purchase major crypto-assets like Bitcoin (BTC), Ethereum (ETH), XRP and others with 20% or so.
As of 2020, the launchpad has already launched over 40 offerings, and all the projects seem to raise substantial amounts of either USDT or Gate.io’s native Gatechain (GT) tokens. In terms of raised capital, it’s most successful offering was the initial sale of Crypto Neo-value Neutral System’s tokens (CNNS). The offering raised 3124% of its goal and got 112,484,289 USDT in total – a substantial sum for a new crypto project.
In April 2020, Gate.io’s IEOs still have net positive average profitability, thus making the platform a great option for IEO investors.
3. OK Jumpstart
OK Jumpstart by OKEx is an excellent platform for quality blockchain projects. It offers a high-quality liquid market, top-notch exposure, and token listing opportunity in one of the most popular exchanges in the world.
OKEx introduced a subscription plus allotment approach to avoid oversubscription. This way, there’s a brief 30-minute subscription window before an IEO, which closes if the max limit is reached. Then, the allotment part follows: an investor must hold a minimum of 500 OKB (OKEx exchange token) for seven days or at least 3,500 OKB at the snapshot time before the token sale. The allotment amount is based on your OKB holdings. The more OKB user has, the more significant the allotment amount one gets. OKB is the only accepted token on OK Jumpstart IEO platform.
The average ROI on the OK Jumpstart platform is approx. -20% as of April 2020, but it is mostly a result of the negative price action due to the recent market crash. The average all-time high ROI on OKE’s IEOs is more than 570%.
All in all, the platform checks all the required marks to be one of the top IEO platforms – a reputable, easy to use high liquidity exchange, powered by top technology and credible team.
4. Bittrex IEO
Bittrex doesn’t have a unique name for their IEO platform, but it is unlikely that they need one. It is a long-established and popular cryptocurrency exchange with sturdy security measures, infrastructure, and liquid markets.
Although the exchange had some troubles before launching its first IEO for RAID project, Bittrex IEO made the headlines with VeriBlock token sale which lasted 10 seconds.
Bittrex doesn’t have an exchange token, so its token sales raise funds with Bitcoin (BTC). That makes its IEOs more accessible to everyone. However, it hasn’t introduced any “fair distribution†procedure either, which means you have to be extra fast to make your IEO purchase count.
Currently, the Bittrex IEO platform is negative in terms of profitability. Despite that, Bittrex remains a competitive IEO platform with many hot projects on it.
5. Huobi Prime
Huobi Prime by Houbi Global launched in March 2019 to provide ambitious crypto projects with funding. It’s a powerful platform built on top of one of the exchanges with leading trading volume.
Huobi Prime boasts of its innovative Direct Premium Offering (DPO) feature. It stands out due to the following advantages:
- Rigorous project screening process, which ensures that only premium projects make the cut.
- All purchased coins are immediately deposited into a user’s account and can be traded on Houbi Global for Houbi Token (HT).
- Early access to coins below market prices.
- Equal opportunity for both big and small players, where individual purchases cannot exceed $1,000 worth of HT.
- There are periods of tiered price limits that mitigate extreme volatility when the market opens.
As such, Houbi Prime has proven to be a robust and reliable IEO platform with a decent incentive structure.
6. KuCoin Spotlight
A former top 10 exchange, KuCoin, is trying to regain its significance with KuCoin Spotlight, its native IEO platform. After upgrading the exchange to a new 2.0 version, it is still one of the best and most recognized exchanges in the market.
KuCoin Spotlight IEOs are powered by its native KuCoin Shares (KCS) token, and the token sales follow the first-come, first-served principle, so you have to be faster than other investors. The platform itself is secure, easy to use.
In sum, KuCoin Spotlight ranks among the best IEO platforms out there. Although there have been some complaints from the investors who didn’t manage to make their purchases on time, it has been an issue with most IEOs.
IEO returns
IEOs raised approx. $1.688 billion in 2019 (including $1 billion Bitfinex LEO token IEO). According to PwC, it is expected that IEOs will continue to overtake ICOs in the near future.
The average return in an IEO varies by the project and platform. The best performing IEOs to date (March 28, 2020) are the following:
- Sero (SERO) – Gate.io Startup – 5.14x price increase.
- WazirX (WRX) – Binance Launchpad – 4.64x price increase.
- Matic Network (MATIC) – Binance Launchpad – 3.98x price increase.
- GoWithMi (GMAT) – Gate.io Startup – 3.68x price increase.
- HyperDAO (HDAO) – OKEx Jumpstart – 3.04x price increase.
- Reserve Rights Token (RSR) – Houbi Prime – 2.22x price increase.
- ROAD (ROAD) – Binance DEX – 2.11x price increase.
- THORChain (RUNE) – Binance Launchpad – 1.87x price increase.
- Wirex (WXT) – OKEx Jumpstart – 1.82x price increase.
- BitTorrent (BTT) – Binance Launchpad – 1.77x price increase.
Looking at current and average returns since IEO by exchange platform, Binance and Gate.io rank at the top of the list. On the opposite end, BitMax, OKEx, Huobi Global, Probit, Bibox, Bittrex and KuCoin BitMart, EXMO, Lbank, Bitforex, DigiFinex, and Bgogo offerings have a negative net ROI.
Conclusion
IEOs provide excellent opportunities for investors, exchanges, and projects. In turn, they are becoming an increasingly important part of the crypto ecosystem. Although users in countries like the United States cannot participate in most of them yet, such collaboration between exchanges and users bring more credibility to the altcoin space, which could, in turn, weigh the scales towards more positive regulations for everyone.
