ICO Vs IEO Vs STO Determining the Nuances in Tokenized Fundraising

TOPICS :   Cryptocurrency
Amit Gupta
Amit Gupta
Apr 23 , 2021 15 min read 682 Views Likes 0 Comments
ICO Vs IEO Vs STO Determining the Nuances in Tokenized Fundraising

Fundraising is the most important part of the present economy. Most of the firms and startups in the world cannot give their services or products if people do not invest in them. While asking for enough funds was never a simpler task, there are some options. Not to show that it disturbed the system with several differences and security problems. But times are revised.

They have changed the view towards raising the funds from the technologies like blockchain. This also eliminates the third parties and raises the clarity in the transactions. The crypto space has seen a wave of revision when the tokenized form of raising the funds has gained fame. Through passing time, the other fundraising has started ICO, STO and IEO started pulling the investors to a new world of crypto assets. But the question is, which is the best of all?

Initial Coin Offering (ICO) Marketing

As per the survey done through Statista, it is seen that ICOs urged for the cryptocurrency industry, which is the biggest among the other industries like business services, infrastructure, banking, and investment. In November its value was $14.8 billion. Crowdfunding has taken Initial Coin Offerings towards the highest duration in the cryptocurrency.

The ICOs are effective as they permit the firms to raise the capital for their succeeding projects by providing the crypto tokens at lesser rates. The new investors have the purpose of investing in ICOs, as setting the ICO is simpler regarding others. If anyone has the then they can launch the Initial Coin Offering ICO marketing to convince the investors to invest in their project.

ICOs need only a lesser amount for participating in the project. It pulls the investors who are immature and the coin owners who seek towards the likely projects as the profit relies on the value of the bought tokens in the future. But ICOs are vulnerable to frauds, and there is no guarantee towards the sustainability of the project. Hence, for the long-term investors, the ICOs do not pose the best choice.

Initial Exchange Offerings (IEO) Marketing

The first IEO raised in the year 2017 however most projects have opted for ICOs. But at the start of 2019, IEO became famous. According to the ICO bench statistics, it is seen that over 94% of the projects have taken part in IEO of these projects 58.32% of projects were posted in the second quarter.

Via IEOs are new to the crypto space they build the mark. They are the same as the old school ICOs. the token in this is not given to the investors, rather than they are offered via an exchange. The companies buy or sell the tokens for the other crypto coins via exchanges and provide to set up the account through the specific exchange and send ETH or other crypto currencies to the account.

What is new about IEOs is the centralization-based model in place? Excluding ICOs in which no tracking through any 3rd party. As administrators, Initial Exchange Offerings (IEO) marketing has the exchange. The crypto project needs to meet the need of the exchange to launch the token sale. Prior to the launch, the exchanges pose out a thorough verification of the project and IEO and make sure that the security of the transactions. Hence the contributors are secured through the exchange in various ways.

Security Token Offering (STO) Marketing

STOs are the most allowed form of raising the funds in the crypto market. Owing to the hardships and complexity, the fundraising policy is not introduced to most amateur investors and project practitioners.

For STO marketing the investment contract is built, which is supported through the security tokens on the blockchain. As it back the security tokens through the assets under the law certificate of the ownership, they favor proper securities. The STOs operate similarly to the older stocks and the investment secured in the digital ledger system.

Investors who purchase the security tokens are the same as those who invest by using genuine bonds and stocks. The security token is the type of crypto-security and is safe through the KYC-AML process and with the other regularity security. As the security tokens are saved through real-life securities, they are the popular choice for accredited investors. It also builds one of the most costly fundraising techniques regarding the ICOs and IEOs.

Final Thoughts

Whether it is ICO, IEO, or STO, investors must remember their capabilities prior to choosing any fundraising way. The ICOs may be the simpler method, as it is a pocket-friendly investment and quicker cashing out options. But it will not be an effective choice for any investors who need better security and align through the standards of the rules and law. Despite STO’s suits to those investors with the bigger budgets at hand.

In the summary, there is no guarantee that in the coming times the STO or IEO, or ICO marketing will be popular. Raising the fund routes keeps growing through time according to the needs of the investors and crypto projects. Did you also trust in the crypto revolution in the current marketplace? Stay in touch to know all the conditions relevant to the blockchain.


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