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How to Invest in IEOs: Step by Step

Do you feel that you missed the ICO gravy train? Fret not, for IEOs (Initial Exchange Offerings) are now here.

More secure, more likely to succeed, and potentially more profitable than initial coin offerings, IEOs are likely the wave of the future.

What you need to know now is how to invest in them. Here are some of the IEOs offered by exchanges, along with information about how to invest.

  Binance Launchpad OKEx Jumpstart Huobi Prime Bittrex International KuCoin Spotlight
Exchange volume Massive. Rated #1 by CoinMarketCap. Good. Ranked #2 by CoinMarketCap. Good. Ranked #3 by CoinMarketCap. Not particularly impressive. Ranked #47. Not very impressive. Ranked #41.
Dedicated IEO platform/page Yes. Launchpad is the gold standard in this regard. Yes. Clear IEO rules. Yes. No. IEO announcements made through Twitter. Yes.
Track record Outstanding. Some of the most hyped and pumped IEO tokens launched. Decent. Decent. Some failures mixed in. Decent.
Allotment Method Intricate, lottery-based allotment. Better than “first come, first served”. Subscription allotment procedure. “First come, first served”, with eligibility requirements. “First come, first served”. Used to be “first come, first served”. Changed to lottery.
Own Exchange coin Yes. BNB (Binance Coin). Yes. OKB. Yes. HT (Huobi Token). No. Uses bitcoin for IEOs. Yes. KCS (KuCoin Shares).

Binance Launchpad: The Top Option for IEO Investors

With Binance being one of the top digital asset exchanges, its Launchpad naturally offers itself up as the top IEO investment option.

The platform has seen a number of successful IEOs already. It has also racked up some valuable experience in this budding vertical.

Tokens sold or slated to be sold through Launchpad are:

  • GIFTO. Could be bought for BNB and ETH.
  • BREAD. Had BNB and ETH sessions.
  • BitTorrent Token (BTT). Had BNB and TRX sessions.
  • Fetch.AI. Only sold for BNB.
  • Celer. Only sold for BNB.
  • Matic. Only sold for BNB.
  • Harmony. BNB only session.
  • Elrond.  BNB only session.

Taking part in these IEOs is a bit more complicated than sending some ETH or BNB to an IEO address. Binance has developed a lottery-based system. It has designed this system to reward those who hold BNB (its own exchange token).

Preceding the lottery draw, there is a “holding” period, during which the BNB holdings of would-be investors are assessed. Those with bigger BNB balances get more lottery tickets. The maximum number of tickets is 5.

During the draw, the system randomly selects winning tickets. For each winning ticket, the participant automatically sends in $500 worth of BNB. The freshly acquired tokens land in the winner’s account.

Why is there a need for such a convoluted allocation system? Handing out IEO tokens evenly to all those who hold BNB would spread the goods thinly. Individual investors would end up with not much more than dust.

On the other hand, sticking to the “first come, first served” approach would deny most investors the opportunity to grab any IEO tokens at all.

OKEx Jumpstart: Stock Up on OKB

In its own right, OKEx has emerged as a successful IEO destination as well. The Jumpstart IEO platform only accepts the exchange’s own OKB token for acquisitions.

Tokens thus far sold though Jumpstart are:

  • Blockcloud (BLOC)
  • ALLIVE (ALV)
  • En-Tan-Mo (ETM)

To invest in such digital assets on Jumpstart, you will need OKBs and you will have to follow the subscription allotment procedure.

  • Start out by holding as large a balance of OKB as possible.
  • Holding this hoard over a longer period is important. The system determines your allotment coefficient based on it.
  • Take part in the two subscription sessions for the privilege to receive an allotment.
  • If you do get an allotment, the cost of your new tokens will be automatically deducted from your OKB balance. Your new digital possession lands in your account.

Huobi Prime: A Better Path to Premium Blockchain Projects?

Huobi‘s approach to IEOs is a rather unique and somewhat “raw” one. “First come, first served” sums it up well.

Of course, there are eligibility requirements involved too. These revolve around the average daily HT (Huobi Token) holdings of investors over the 30 days leading up to an IEO.

Tokens launched through Huobi’s Prime are:

  • NEW
  • TOP

If you want to invest through Huobi Prime, this is what you need to do:

  • Make sure you fulfill the eligibility requirements. Hold enough HT, over a sufficiently long period. Fortunately, eligibility requirements are flexible and they change from one IEO to another.
  • Log into Huobi Prime and start trading. The system sells IEO tokens in three rounds of free-for-all frenzy. Each round lasts 30 minutes, with 20 minutes of effective trading.
  • Simply place a buy order for the IEO token and hope that it goes through. Token prices are capped during the trading rounds.
  • You can only pay for your new tokens with HT.

Bittrex International: A Taste of When IEOs Go Wrong

Bittrex has dabbled in the realm of IEOs alongside the mentioned bigger exchanges. Its experience has not always been positive, however.

Unlike Binance, OKEx, and Huobi, Bittrex does not yet have an exchange token of its own. It makes announcements concerning its upcoming IEOs through Twitter. There is no way around it; its IEO infrastructure is less evolved.

Some of its past IEOs flat-out failed. Such was the case of RAID. The Ocean Protocol ended up losing money as well.

VeriBlock, on the other hand, and STP were successful.

As an investor, you should bear in mind that by taking part in an IEO, you agree to its terms. These terms usually spell out that you may lose your investment.

How do you pay for the IEO tokens if there is no “Bittrex Coin”? You use bitcoin and you buy through the Bittrex exchange. Be aware that token sales happen on a first come, first served basis. It is a little bit of a Wild West out there.

The only eligibility requirement seems to be a verified Bittrex account.

KuCoin Spotlight: The IEO Little League?

KuCoin is not one of the heavy hitters of the IEO scene. That said, it already has four IEOs under its belt and it is looking to step up its game.

IEOs hosted by KuCoin Spotlight:

  • MultiVAC
  • Trias
  • Chromia
  • COTI

In the beginning, KuCoin used the “first come, first served” approach. For its latest IEO (the COTI one), it made the move to a lottery-based allotment. KuCoin’s own exchange coin, KCS (KuCoin Shares) also has a role in the IEOs.

What You Need to Know About IEOs

The IEO model is superior to the ICO one for several reasons.

  • Exchanges offer newly launched digital assets to their users only.
  • The exchange lists the IEO asset immediately after launch.
  • Exchange launchpads and incubators only accept projects that live up to their standards.
  • Exchanges scrutinize whitepapers and analyze tokenomics, project status, marketing, etc.
  • IEOs command more trust and security.

Potential IEO Pitfalls

With IEOs proclaimed the way of the future, scores more exchanges are looking to burst onto the scene.

For now, most IEO tokens have been very successful. When the true IEO rush begins, the question arises: will this model prove to be sustainable?

Some exchanges are already planning to turn IEO listing fees into their main sources of revenue. With greed added to the mix, listing standards may take a hit. The ones paying for that hit will be the investors. As is the case with all forms of investing, the caution “Buyer beware” applies.

Subscribe to the Bitcoin Market Journal newsletter for more in-depth analysis of the emerging IEO scene.

The post How to Invest in IEOs: Step by Step appeared first on Bitcoin Market Journal.

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