Initial Exchange Offering and Binance Launchpad - Crypto Academy/ S5W6 - Homework post for Prof @nane15
Hello Prof @nane, having gone through the lecture note(Initial Exchange Offering and Binance Launchpad) for this week to my understanding, below is my attempted homework.
EXPLAIN IN YOUR OWN WORDS WHAT AN IEO IS.
IEO is an abbreviation for Initial Exchange Offering. This is usually done when new projects are to be introduced into an exchange. Simply put, it is an activity of raising funds for incoming or new projects on an exchange. Therefore, for these funds to be raised, the project members or team offer presale of the tokens that will be of use for the projects at hand. The time of presale is when investors are given the opportunity to buy and own the tokens at a very cheap rate. The money generated from this presale is otherwise used in the continuation or moving forward of the project.
IEO(Initial Exchange Offering) is synonymous to ICO(Initial Coin Offering) but the only difference is that the activities of the IEO is controlled and oversee by a central authority which is a centralized exchange. Whenever there is a new project or token or cryptocurrency on ground and it is to be listed into an exchange, it passes through the period of presale.
DO YOU CONSIDER IEOs AN ADVANTAGEOUS WAY TO MAKE AN INVESTMENT? EXPLAIN.
Certainly, I consider IEOs a very advantageous way to make an investment with my following
reasons:
Being an investor, when tokens are bought or invested in during the period of presale, there is a greater chance of them making profit especially when the token is launched or listed and the price of the token also increases in value than the price it was initially bought.
Since exchanges do the listing of a project's token, there is a high probability of it being profitable because projects that perform IEOs normally stand a chance of getting supports from investors which will cause an increase in the price of the token.
Carrying out a project really requires a lot of finance and it cannot be handled by a single person. Therefore, for the continuation of any project, IEO is usually used to raise funds for the project.
LIST ADVANTAGES AND DISADVANTAGES OF PARTICIPATING IN AN IEO.
Below are the advantages and the disadvantages of participating in an IEO:
Profit Making: In the course of being a part of an IEO, an investor is opportune to gain or make profit from the project because as the project is being supported in the process of the presale, it gives room for the token's increase in value.
Early Access: Participating in an IEO gives the participants an opportunity to access a project's token early before the token is listed for trading purpose.
Safe and Secure: Since exchanges are in charge of organizing an IEO and also listing a token, investing by participating in IEO is safe and secure as scam IEO will compromise the trust of the particular exchange that listed the token.
Below are the demerits of being a part of an IEO.
Participating in an IEO is profitable but at times it may cause great loss as some of them might be scam. Therefore, investors who put in greater amount of their money in the project will loss massively. Also, there is a situation where some investors invest in a project token, and when the value of the token increases, other investors who do not have patience will want to sell their tokens which will cause a fall( either massive or a bit) in the price or value of the token.
Most IEOs are not for everyone to be a part of as they are in need of or as they deal with people who invest in large quantity. Therefore there is restriction to the people who participate in IEO.
As it is known, crypto tokens are unpredictable. Therefore the price at which a token was bought during presale might be greater than the price when it is being listed on an exchange which is also losses to the investors.
EXPLAIN HOW TO PARTICIPATE IN AN IEO, FOR THE PROCESS EXPLORE VARIOUS EXCHANGES, CHOOSE ONE OF THEM AND EXPLAIN THE PROCESS. (USE FROM SCREENSHOTS.) (NO NEED TO PARTICIPATE, JUST REGISTER, PROOF OF VERIFIED ACCOUNT AND EXPLAIN THE WHOLE PROCESS, DO NOT USE BINANCE)
To be a part of an IEO, one has to search for exchanges with active IEOs and also make sure to carry out better and accurate analysis on the project to see to it that its IEO is not scam. Investors usually summon courage to participate in an IEO because of the particular exchange hosting it. No exchange will want to soil it's name or compromise its trust, therefore, no uncertain project will be introduced. After analysing the project, make sure all the laid down rules are met and followed.
Then go ahead and register and also complete it by registering your KYC before participating in any IEO by buying some token in the presale level. Now I'll be exploring different exchanges before choosing one of them to explain the participation process.
Above is the list of an IEO consisting of, kaly coin, runnode, zedxion,etc
- Gate .io
- Huobi Global
- Kucoin
- Binance
I will be explaining the participation process with kucoin.
First, visit the kucoin exchange with the link coincodex.com before choosing the token of your choice. I chose velo.
Step 2:
Click on finish Launchpad
Step 3:
I was redirected to a page to sign up where I had to fill in my number, verification code before clicking on next.
Step 4: I setup a password for myself and also confirmed to make sure I typed the correct thing.
I have successfully signed up on the exchange as can be seen below
AS AN EXAMPLE OF A PROJECT THAT HAD A SUCCESSFUL IEO, EXPLAIN THAT PROJECT. BE ON TOPIC. (USE FROM SCREENSHOTS.)
As said before, IEOs are organised and hosted by exchanges. Below is an example of a project with a successful IEO;
BitTorrent: This is a peer-to-peer file sharing network that is used to distribute decentralized electronic data, information, details and files to users across/ over network. The BitTorrent IEO made up of two sessions which are;
a session where the BTT token could be purchased with BNB and
another session where the same BTT token can be purchased with TRON. This IEO happened on the 28th January, 2019.
Therefore,in these two sessions, the BNB was able to sell 23.76 billion BTT in the pace of 14 minutes while the TRONS sold 35.64 billion BTT in the pace of 15 minutes. Now, the current price for BTT is $0.002832 with the market rank as #57.
CONCLUSION.
IEOs are of immense help in the aspect of people going into the world of cryptocurrencies. IEOs gives people early knowledge about a particular token or tokens that is or are coming into existence in the crypto world and exchanges. Carrying out analysis on the type of project token in which an IEO is being offered is necessary so as to curtail being scammed.
Thanks a bunch Prof. @nane15 for such a wounderful and impactful lecture, it is my pleasure to be a part of this task.
