Crypto glossary
IEO (initial exchange offering)
An IEO (initial exchange offering) is a token sale run by a centralized exchange on its own platform, which vets the project and usually lists the token.
In an IEO, the exchange acts as the sales venue and gatekeeper. It reviews the project, sets the sale terms, sells the tokens to its own verified users and normally lists the token for trading shortly after. Buyers do not need to send funds to the project directly, because the purchase happens inside their exchange account.
The format took off in early 2019, after the ICO boom faded, when Binance Launchpad ran sales that sold out in minutes; other large exchanges soon launched similar programs. Participation is often limited by lottery or by how much of the exchange's own token a user holds, and KYC is required.
The exchange's involvement adds some screening, but it is not a guarantee of quality, and the exchange earns fees and often tokens from the project. Many IEO tokens fell well below their sale price, and in some jurisdictions these sales can fall under securities rules.
Example
A user holding the exchange's token for the required period receives an allocation of 500 new tokens at $0.05 each, paid from their exchange balance, and can trade them when the listing opens.
Related terms
Latest articles on IEO
- SEC Commission Advises Against Investments in Unregistered Initial Exchange Offerings (IEOs)
- Kava Labs to Sell Tokens on Popular IEO Platform Binance Launchpad Next Week
- Binance Launchpad To Host $300,000 Airdrop For Band Protocol IEO
- Binance Announces Perlin [PERL] Network as 8th IEO on the Launchpad
- Binance Announces WINk Gaming Platform as the Next IEO on the Launchpad
