The very first Initial Coin Offering (ICO) took place in 2013 by Mastercoin, since then the fundraising vessel phenomenon has exploded. The well-known token Ethereum and 2nd largest by market cap, raised 3,700 BTC in its first 12 hours (approx. $18.5 mm USD at time of writing) back in 2014. Ethereum (ETH) has since been used as the ‘go to’ platform from which organisations launch their ICO’s and in 2017 alone, over $20 billion was raised through ICO’s across the World.

There have of course been a number of fraudulent ICO’s that have tarnished the token sale reputation and struck fear and uncertainty into would-be investors. The early ICO days proved to be an easy way for participants to X5 or X10 multiply their initial investments and the craze continued to grow. Legitimate and fraudulent companies alike set up ICO’s of one kind or another and Bitcoins continued growth fuelled the seemingly endless profit making scheme. It was later revealed that in most cases, these ‘too good to be true’ ICO’s were in fact too be good to be true. In a report published by the Statis Group, over 80% of ICO’s conducted in 2017 were found to be scams.

The scams and failures have been well documented, with news hungry media quick to highlight shortcomings inherent in the crypto funding mechanism. This said, the token offering process has helped some very promising companies launch revolutionary products. These have proven innovative and disruptive, helping advance block-chain adoption and integrating it with a multitude of industry sectors. Even though token sales have witnessed a reduced capital income, the process is still popular. ICO tracking sites such as ICO Bench, showcase and rate the various token offerings that provide a window from which potential investors can peer into.

The hunger for quality token offerings is still present but we are starting to see an evolution in the way they are administered. The term ‘IEO’ will be new to most but is likely to grow very quickly, much like the explosive growth of ICO’s in 2017. Initial Exchange Offerings (IEO) have recently come to the forefront and are seen as the logical next step in token offerings, providing a more secure and trustworthy option for those who are eligible to participate.

What is an IEO?

Initial Exchange Offering is an abbreviation for the “initial offer of exchange” which is a fundraising procedure in which the exchange takes place on behalf of the token issuers. Simply put, an IEO is an ICO but uses an active exchange as an intermediary to the token sale. Huobi, Okex, Binance and Bittrex are amongst a growing number of exchanges already offering IEO’s with more likely to follow over the next few months. Recent high profile IEO’s have increased public interest and attracted more projects to the fundraising mechanism. BitTorrent recently raised $7.2 million in 18 minutes, and Fetch.AI recently raised $6 million in 22 seconds through Binance. Just this week, ICO Bench reported a record sale for the MultiVAC IEO, which reportedly sold $3.44M in 7 seconds.

The exact reasons for the astronomic sales have yet to be clarified but the enhanced exposure through the exchanges is likely to be a key factor. It is also unclear if we are witnessing a terminal decline to ICO’s or just an evolutionary phase that will provide a new wave of enthusiasm through the crypto community.

THE COLLECTIVE IEO

Change is upon us and in response to the evolving climate, THE COLLECTIVE has made a strategic decision to shortly switch its ICO over to an IEO. The exciting news comes following much consideration and after listening to members of the community who have been expressive in their views on the topic. The decision follows the motto that the Community is THE COLLECTIVE and giving power to those within the community is fundamental to the future growth and success of all involved. THE COLLECTIVE believe it is in the best interest for all parties concerned and also to the company itself. The decision which should take effect at the end of April is designed to leverage the benefits of an IEO whilst maintaining the integrity of an ICO. The illustrative benefits to the IEO decision are highlighted below.

Benefits of an IEO

The relationship between exchange and token creators is quite symbiotic. At first glance it would appear the benefits are clearly in favour of the company listing the token but the benefits extend far beyond this.

Benefits to THE COLLECTIVE

The case studies above are obvious examples of the potential benefits to the ‘launched’ company

· THE COLLECTIVE will benefit from extended reach through the exchanges existing user base and their social media platforms.

· The CDEX token will receive automatic and immediate listing upon IEO completion.

· Launching on an exchange provide a higher chance of selling tokens and or reaching the hard-cap.

· THE COLLECTIVE will be exposed to enhanced credibility provided by the exchange in accepting the project.

· KYC and AML checks can be carried out by exchanges on behalf of THE COLLECTIVE

· THE COLLECIVE can shift focus to marketing as the exchange takes over responsibility for token sale and listing.

Benefits to the Exchange

· IEOs will incur a fee which means exchanges are able to charge companies to launch their IEO’s (Current fees unknown)

· Exchanges are likely to attract additional users, especially with popular projects like THE COLLECTIVE

· Increased trade volume prior to and upon completion of the respective IEOs

· Those loyal to particular token offerings are likely to remain as long standing users of the exchanges

Benefits to Participants

· Ability to access multiple IEOs when registered on 1 exchange

· Confidence provided by credible exchanges facilitating the IEO

· Option to participate using multiple FIAT and crypto-assets

· Immediate liquidity provided upon IEO completion for CDEX and other tokens.

· Higher chance of token legitimacy following checks and audits carried out by exchanges

The Future

The huge IEO news is yet another positive move, one that is likely to prove favourable amongst the growing COLLECTIVE community. With multiple utility facets in development and a live MVP through a community management & development company, the IEO is likely to further enhance development and expose a great project to an even bigger audience. The on boarding process for new clients to THE COLLECTIVE is also gaining momentum which will likely result in an increased client base and in an increased demand for the community management & development services.

For more information visit: THE COLLECTIVE