A review about the new sort of ICO’s, the IEO’s. What kind of projects have been offered on exchanges so far and how did they perform?
After experiencing the 2017 bullrun with all the ICO’s that came along, the entire market had its period of cooling down. Where most cryptocurrencies took a nosedive into the red, including bitcoin that went from its peak around 20,000 USD all the way down until around 3000 USD, that was not the currency that took the biggest beatings. As we have seen in the previous articles concerning the ICO’s that raised the most money during the 2017 bullrun, the returns do not lie. We have seen many cryptocurrencies dive as deep as -98% into the red. In fact, more coins actually went down than the coins that went up during this period.
Now some of the coins that actually did make some returns were all linked to a new phenomenon in the cryptocurrency industry; The IEO, short for, Initial Exchange Offering. With just a letter difference, the whole concept remains the same but it brings a little more security. Where during the ICO phase, projects had to use their funds to finance exchange listings, with an IEO the project is already secured of listing on the exchange that’s hosting the token sale. One thing is for sure, the investors are loving the new form of investing as studies show that IEO’s have collaboratively raised around 1.4Billion so far. Now before we zoom in on which projects that have come along the past couple of months, let’s see who the crypto exchanges are that are initiating these token offerings.
The ruling party in the cryptocurrency industry at this very moment is Binance, with their Launchpad they have set the scene with the Initial Exchange Offerings, the IEO’s. With one of their first projects being the Bittorent token sale on their platform, they have proven to not only provide the service of hosting the token sale, but they are also capable of marketing and financing the initial pump at the start of the exchange listing. History learns that every single project on the Binance Launchpad has been successful so far, with peaks that have brought the investor astonishing returns if they sold at the right moment.
Following Binance, the Huobi exchange is one of the largest exchanges out there. It’s not a surprise that they would participate in the IEO hype that’s currently around. Their first IEO, the TOP project made a pretty impressive jump right after listing on the exchange, with 250% in profits for those that bought during the token sale. Currently, Huobi has done several offerings, one more successful than the other.
One of the most interesting cases is the exchange that’s not even that big, Gate.io. They have made a name for themselves with the enormous returns that their IEO’s have brought the investors. The catch here is that their system allows anyone to invest, regardless of the amount that’s available for sale. What happens, for example, is the goal is set at 120,000 USDT, but the demand is that high that the total investment reaches 21,000,000 million USDT. Meaning that the fundraising goal was oversold with more than 182 times, resulting in the fact that investors get 0.5% of their invested amount. In this case, if the token is listed and it reaches the sky, what would’ve been great returns, can now be pretty disappointing considering the fact that you only got half of a percentage of what you invested.
After mentioning a couple of projects in the description of the exchanges that are causing this euphoria, let’s move on to the list of the project that raised the most and let’s see what they have been up to ever since their token sale, their IEO, concluded.
3. Perlin — Binance Launchpad — Raised $53 Million
As one of the most recent IEO’s and the most recent project offered on the Binance Launchpad, the hype was real surrounding this project. With each and every IEO that was announced on the Binance Launchpad, everyone started expecting immense returns. The thing with Perlin that was limiting these returns was the relatively high market cap immediately after listing on Binance. As most people have experienced, each project that’s listed in Binance has an extra little spotlight shining on them, including Perlin. What happened directly after the listing was a slight disappointment to many. It did not bring the expected peak after listing, it even dumped below the IEO price of 0.077 USD before crawling back up to 0.10 USD momentarily.
Perlin is an extremely ambitious project that’s aiming to revolutionize the $USD 11 Trillion international trade market that’s including the International Chamber of Commerce, Enterprise Singapore and Dubai Chamber of Commerce. They are building a highly scalable proof of stake smart contract platform that’s intended to process more than 31,000 transactions per second with a 0 to 4 second time to finality. These are all numbers and words we have heard before, but Perlin has actually partnered up with quite some impressive partners and has found backing from some big venture capitalists. There is no question that this company will be successful, but will it bring investors the returns that they are expecting? That’s a second question, that only time will tell.
2. Tron Game Global — Multiple platforms — Raised $80 Million
This IEO was held on two exchanges, the LAToken Launchpad and the Coineal Launchpad. After raising 80 million with their GTP token, the Tron Game Global project is a project that seems fishy at first glance. Their website does not look too professional but they claim to have found the solution to laying the groundwork for Internet Decentralization. They claim to have ‘The Easiest Way To Access Money And Assets Worldwide’, please do note the spelling error that’s actually there on their website. After looking on their website I decided to take a look on their Telegram channel to see what their community is up to. This did not contribute to the image as it’s filled with spam and fishing messages by random users. I did not find any information whatsoever on the current development off the project.
After opening their Twitter page, that led me to the Vietnamese version of Twitter, I found out that they are developing a debit card that can be used as a MasterCard. Next to that, I found a dodgy slideshow that would bring the people on the Tron Network great profits. It could be my research that’s wrong, but I am extremely glad I stayed far away from investing in the IEO on both LAToken and Coineal exchange.
1. Leo — Bitfinex — Raised $1000 million — 1 Billion
This was probably the biggest investment ever raised during an ICO or an IEO, in competition with Telegram’s GRAM token sale, that raised even more. Bitfinex is the exchange that’s behind Tether, a story that can be told many times but is debatable every single time. Rising from the ground as one of the first stable-coins, Tether, is still the number 6 on the Coinmarketcap top-100, above any other stablecoin. The big question was if Bitfinex actually had the USD reserve to back up all the printed tethers they had issued before. The LEO IEO would be considered a manner to cover for the gap between the printed Tether and the reserve that was there at the time. Whether this is true, I have no idea. One thing is for sure, the LEO token was in high demand. Selling 1 billion tokens for the price of 1 USD a token, the sale was a success and Bitfinex found themselves a whole lot richer.
After listing on the Bitfinex exchange, and shortly after many other exchanges, the LEO token rose to almost double the IEO price of 1 USD. Currently, it’s sitting at a respectful 1.07 USD, slightly above the price that it was sold at in May 2019. The token is used as an exchange token, giving the option to reduce some of the token fees and for other utilities like lending and margin trading. Nothing extremely spectacular, but let’s see what the future holds.
The IEO cycle has been a wild one so far. Enormous amounts of money have been raised once again, where other projects have kept it fair and square and raised ‘only’ a couple of hundred thousand dollars. I am curious to see what the future holds for these projects. We have seen the performance of most 2017 ICO’s, now let’s see in a year or two what these projects will deliver. Will they accomplish their goals, or will we see new forms of exit-scams and other scenarios like we have seen too many times in the cryptocurrency industry. One thing is for sure, it’s never boring in this industry.
Originally published at changenow.io on September 12, 2019.