Initial Exchange Offerings (IEOs) are the new buzzword in the Blockchain and cryptocurrency world. On the surface, an IEO appear to be different from an ICO in that it combines the token sales and exchange listing into a single event.
Hence, traders and investors who buy into an IEO can expect to begin trading immediately. In contrast, when you buy into an ICO, you’ll start waiting and hoping that it succeeds enough to make it to an exchange.
One of the reasons ICOs crashed was that unscrupulous people started launching ICOs to raise money with nothing more than a shiny landing page.
Now, the problem is that the IEO wave might end up being another cleverly disguised ICO madness where people raise millions of dollars from an unsuspecting public with nothing more than a landing page, a verbose whitepaper, and a listing on an exchange by propagating hype and FOMO.
Why the IEO is not necessarily the future of crypto fundraising
Many of the companies that were not able to launch their ICOs before the ICO bubble burst are now changing their market entry models to include an IEO. Interestingly, an IEO looks trendy and many people tend to follow the crowd to be a part of the next big thing.
The worst part is that IEOs present a false sense of security in that traders and investors expect that the exchange listing the offering would have conducted a measure of due diligence before listing such projects.
Hence, the mere mention of an IEO is leading into many people into a FOMO-fueled frenzy to buy. With ICOs at least; there’s a sense of due diligence when you read through the whitepapers, tech papers, and try to make sense of the tokenomics.
With IEOs, the mere fact that an exchange is listing a project seems to absolve buyers of the responsibility of due diligence. Unfortunately, the small print of many IEOs often include the warnings that listings are not endorsements.
Another problem with IEOs is that they ride too much on speculative hype in which the underlying value of the tokens has nothing to do with its security or utility value.
The problem with riding the speculative wave is that the bubble will eventually burst. A tweet, breaking news, or a whale movement can erase gains overnight causing retail traders and investors to be left with an empty bag.
The old-school Token Generation Event still offers more protection
Token Generation Events (TGEs) are somewhat old-school for raising funds in the crypto market; yet, they provide a fundamentally sound exposure to the market than IEOs.
LiquidApps is one of the few projects that still believe in building a community organically rather than just riding new waves to raise funds.
If you are not looking for an opportunity to become an overnight millionaire through crypto; then, you might want to take some time to look beyond IEOs, to projects taking the TGE route to crowdfunding.
Liquid Apps’ DAPP Token is being delivered through a TGE that generates new DAPP Tokens on an ongoing basis at a pre-defined annual inflation rate. The new DAPP Tokens will be distributed pro-rata to the DAPP Network service providers as the incentive for powering the DAPP Network. The public sale will take place over 333 days in 444 cycles by a Vendor Smart Contract.
Over the last two months of starting its TGE cycle, LiquidApps has raised more than $1,946,617 as seen in its public wallets here and here at a price of $4.72 per EOS. It also has a total EOS balance of 247,009 EOS; hence, there’s still a large room to attract investors who strongly believe in the long-term prospects of the project.
Block.One’s EOS itself raised funds through a similar token sales event in which it raised more than $4B over the course of 1 year. The quality of the kind of investors who bought into EOS, the dedication of the developers, and the resilience of the community have all helped EOS maintain its position in the list of top 5 Cryptocurrencies by market cap despite the gloomy bearish trend in which more than 50% if projects that have launched in the previous 2 years have fizzled out.
What can LiquidApps teach us about investing in crypto projects?
Real value drives real projects
LiquidApps wants to proactively solve the potential scalability challenges that could slow down the growth of EOS as a vibrant competition to Ethereum. LiquidApps delivers an innovative vRAM system that functions as an alternative storage solution for developers.
It’s DApp Network and DApp Service Providers also serve a range of network functions that makes it much easier and affordable to deliver DApps.
The incredible functionalities that LiquidApps and its native DApp token brings to the EOS network shows a fundamental value proposition. Hence, the team is not in a hurry to ride the wave of hype to raise as much money as it can before the hype starts to mellow down. The fact that the crowd sale will run for almost one-year shows that the team are playing the long game.
Before you buy into that next IEO, take a moment to reflect on whether the founders are trying to raise as much money as they can within the shortest possible time OR whether they believe in their project enough to play a long game.
Disclaimer: This is a contributed article and should not be taken as investment advice.
