IEO vs ICO vs STO - Key Differences!

While IEOs take place on a cryptocurrency exchange (already existing platform), ICOs and STOs are conducted independently on platforms built specifically for the purpose of raising funds. An ICO or Initial Coin Offering is a crowdfunding mechanism that does not require numerous verification processes. For this reason, they are easier and more cost-effective to launch. ICOs are at a low point and therefore, entrepreneurs who can afford to shell out a bit more from their wallet, opt for Security Token Offerings.

The key differentiating factor of an STO is its necessity for compliance with the regulations of governing bodies. The tokens offered to the public during an STO are called security tokens. These tokens are backed by real-world assets that enhance their credibility. Investors who fund these projects are assured financial security with the collateral that the entrepreneur or startup provides. This collateral can take the form of equity, debt, gold, and more. STOs are comparatively more expensive than ICOs. The numerous verification checks and formalities add to the costs involved.

More recently, the IEOs are making waves in the blockchain industry. By providing entrepreneurs with the golden opportunity to meet genuine investors and offering investors good sources for investment, IEOs are godsent. Moreover, with all the mania going around, now is the perfect time to launch an IEO. The novelty of the IEO is causing it to attract the attention of the public which will, in turn, bring in funds.

Benefits of IEOs

A Token Issuer relies on the exchange’s user base to fund his/her project. A renowned exchange attracts numerous genuine investors to whom your project will be visible. The media will also cover IEOs that are launched on these exchanges. Basically, listing on an exchange is a form of publicity.

Another indirect benefit to the users is the high standards that the exchange expects. Token issuers who want to pass all the screening tests ensure that their project is worth listing on the exchange and catching the attention of investors.

This fundraising mechanism has so much potential and if taken advantage of, can bring entrepreneurs success to their business. Initial Exchange Offerings have a bright future in the crypto universe. With the world moving towards a blockchain-powered system, IEOs are on the rise and will soon become the norm. If you are looking for guidance with this process, then Blockchain App Factory is the place to go. We are an IEO Development & marketing Company that specializes in providing customizable blockchain-based solutions.