Inwara Research: Initial Exchange Offerings (IEOs) Take Root in Asia Followed by US in Interest
The crypto industry is at a critical stage where it is on the brink of both mainstream adoption and maturity and as a result, we will likely see a situation in the next few months and years where several firms will continue to strive and maintain dominance within the industry while others will fall by the wayside.
One of the ways by which firms can maintain their place within the crypto industry is by staying strong and maintaining their reputation even during things such as scams and hacks which are, unfortunately, somewhat commonplace in the industry. An example of this is Binance who recently suffered a hack that lost them 7,000 BTCs. However, during the process of recovery, the management of Binance was extremely open towards their users about what was going on and did not shroud themselves in secrecy and this, in turn, earned them even more respect and trust among the crypto community. This, obviously, is a great example that should be followed by several films and it seems Bitfinex intends to do just that.
The company has long maintained in court proceedings that they are innocent of all charges but have since made the announcement of the launch of their newest venture. The project, Tokinex, is a project that will help firms launch initial exchange offerings through which crypto-related projects and raise funds through token crowd sales. A look at the recent headlines related to cryptocurrency will show that initial exchange offerings are growing in popularity and in prominence and this is true even outside of the headlines as recent research shows that they are currently leading in the market and at least two dozen exchanges are launching IEO platforms in the near future which signals an upcoming trend.
Because crypto is an emerging market, there is the constant need to raise funds for emerging projects and ideas and there have been many different methods that have taken prominence to do so over the last few years. The first was initial coin offerings which were turbulent as they often saw clashes with various regulatory voluntarily bodies such as the securities and exchange commission who shut down several due to not being registered or for being scams. Now venture capital seems to also have become popular in the last year though not at the same level of ICOs which dominated the market in 2018.
It seems IEOS is the next phase and research has shown several patterns in how they are dominant in certain parts of the world. According to research by in Iwara, Asian countries are dominating the list of IEO launch pads which is ironic considering China and South Korea are not particularly welcoming towards crypto-related fundraising and have banned ICOs, with China banning cryptocurrency altogether. The research suggests that one of the reasons for the sudden interest in IEOS is that they can help boost the price and trading volume of in-house tokens which is a particularly touchy issue considering that many tokens lose their value soon after lanch. Binance, for example, has seen the price of its BNB token rise by 466 percent since they began launching IEOs.
Binance is also credited for making IEOS popular in the first place and also making $85 million with Gate.io leading with $290 million raised.
However, there is some downside to this as there have been several reports of users unwittingly supporting fake tokens. The exchanges in question are not required to take direct responsibility for the users’ investments but it has been suggested by experts that a lot of research and caution should be taken before use as investing in any supposed IEO.