United States – ICO, IDO, and IEO have different meanings, yet crypto traders are struggling to differentiate the three. We’ll help you understand these before you get into trading.
The cryptocurrency market is inventive in obtaining funds for new enterprises. In the traditional funding industry, VCs, Venture Capital, or loans are the two ways to boost funds. On the other hand, this tactic breaks the founders of the new project.
The digital asset market is expanded, and new ventures can make money while cooperating with the community. It’s all thanks to the financial methods available. Startups in the cryptocurrency and blockchain can trade their altcoins for real money or other digital assets. The money from the selling is utilized to grow the initiative.
ICO stands for Initial Coin Offering, IDO stands for Initial DEX offering, and IEO stands for Initial Exchange Offering. These are ways how digital asset projects raise funds.
The ICO is crowdfunding, and this method is the first way for crypto and blockchain firms to raise funds from investors. IPO or Initial Public Offering is akin to an ICO in the stock market.
Investors can buy a blockchain-based altcoin of a company in an ICO. Later, the altcoin purchased by this company is available for trade on a CEX, which stands for Centralized Exchange or in DEX, which stands for Decentralized Exchange.
The IEO is comparable to ICO in a lot of ways. The primary difference is that ICO is on a Bitcoin or BTC trade platform. Companies that start the crypto trade are the exchange platforms. BTC exchange platform will serve as a neutral third party. The project will utilize the exchange services, and the exchange will float the altcoins on behalf of the project. IEO lets investors buy altcoins before it’s introduced in the market, which opens opportunities for more profits.
The crypto exchange will assist the procedure, which is why the projects that want to raise money through the process should include the necessary details to make the project look more convincing. It needs to provide a proposal wherein the exchange backs the analysis.
As for IDO, it lets blockchain-based projects boost funds by trading the altcoins on DEXs. IDO became popular as a crowdfunding structure for DeFi or Decentralized Finance and DApps or Decentralized Applications, even though most are DApps.
RAVEN started the first IDO in June 2019, which is on the Binance DEX. The project was successful, and some developed on the crypto market, including Universal Market Access Protocol IDO and ShushiSwap IDO.
In the industry, it continuously creates new projects. Most of these projects need finance, and the three methods provide the ideal chance to create the funding for the project’s success.