Clear DefinitionsInitial Exchange Offering
1 min read
Pronunciation
[ih‑nish‑uhl eks‑chaynj aw‑fuh‑ring]
Analogy
An IEO is like a company doing a direct listing on a stock exchange instead of selling shares privately.
Definition
A fundraising event where tokens are sold directly on a cryptocurrency exchange platform, which often conducts due diligence and provides listing support.
Key Points Intro
IEOs leverage exchange infrastructure via:
Key Points
Exchange vetting: Platform screens projects before listing.
Immediate liquidity: Tokens tradable on the host exchange post‑IEO.
User KYC/AML: Exchange handles identity verification.
Fee structure: Projects pay listing fees and revenue share.
Example
Binance Launchpad IEOs require projects to complete a rigorous application; successful token sales are instantly tradable on Binance.
Technical Deep Dive
IEO smart contracts integrate with exchange wallets. Users commit funds via the exchange UI, which calls the sale contract on their behalf. Exchange enforces participation limits, whitelists, and distributes tokens. Post‑sale, tokens are credited to user accounts for trading.
Security Warning
Exchange insolvency or hacks can result in loss of committed funds; choose reputable platforms.
Caveat
Centralized exchange control can conflict with decentralization ethos.
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