Initial Coin Offering (ICO) is a blockchain-based method to raise funds. ICO was a revolution, and it attracted a lot of investors. But some challenges came along. Many scam projects came up, and it was a tedious job for investors to find a worthy and reliable project. For the company that is seeking funds, ICO was a time-taking process. It takes time for investors to notice your project, read the white-paper and then invest. This is where IEO is being useful.
In short two significant challenges,
In an IEO, established exchanges do the listing on behalf of the company. For instance, I pay Binance to list my token in their exchange for investors to invest. As Binance has a broad user base there’s a good possibility for my project to get the attention of the investors. Binance before listing performs due diligence, this way they ensure credibility. And thus, the challenge one ‘scam projects’ is avoided.
Most of these exchanges assure quick listing and once it is done the tokens are immediately available for trading. The second challenge ‘time-taking process’ is also avoided.