Hello there again Steemians. It's @cosai99 with this week's homework post for Steemit CryptoAcademy Season 5 Week 5 Dynamic Beginners' Course. For today's post, we will talk about an initiative that young crypto-investors may need to boost their pockets, or should I say, wallets while they hold assets. It would be risky to enter a trade in exchange without necessarily trying to trade a token and experience its benefits and risks firsthand. Hence, today we will look at one of the ways to familiarize yourself with trading with a token, to know what guarantee that is attached to the success of the token before it is launched or technically speaking, listed, on the exchange. We are talking about IEO, Initial Exchange Offerings. Such projects grants newbies firsthand experience to live crypto-trading and also let them decide with little risk which token will be profitable to trade with. This lecture was facilitated by Prof. @nane15.

Let's get on with it.

Overview of Initial Exchange Offerings and Binance Launchpad💵📈📊✔

Consider a scenario where a very high prestigious company wants to launch a new product into the market. Now, we know that they do not want to lose out on customers and sales in the long run due to some fuss over a complaint of their product malfunctioning after it was sold to customers. They would naturally want to explore all the potential problems that may arise in the usage of the product. They would also want to present proof of the usefulness of the product. Hence they manufacture a prototype and run a test to see how it will relate to certain conditions and until they are fully satisfied with the results with a certain level of guarantee, they will not launch the product into the market for sales. They will not risk their company over overseeing a little problem which can cause a potential high loss to the company since a lot is at stake.
The same principle applies to investment and investment in crypto in particular for our case. We need a platform where we can run the sales or market trend of the token that has been created to determine the chances of success of the token in the market, alongside the risks attached to the trade. Exchanges do well to create such platforms to do this and hence determine whether to list the token or not by observing the market reaction by doing a "test run". Listing is when the exchange finally puts up a token after being tested on the market and its value deemed appropriate for trading after a period. This can be done through a project called Initial Exchange Offering, or IEO for short.

IEO

The analysis is overlooked by the various exchanges that set up the IEO platforms to run tests and analyse how people respond to the token to be introduced.

Let's take a deeper look into it, shall we?

Explain in your own words what an IEO is.

Let's start by explaining a fundraising initiative just like IEO to get a general idea of what this truly is.

Initial Coin Offering or simply put, ICO is a fundraising platform where companies hosting crypto projects sell utility tokens or the token itself directly to the investor, just to generate enough for it to be traded on the blockchain. Now, these are not regulated by any means and this usually happens before the token makes its way to the coin market. The risk of being scammed is very high since it is usually not regulated and it is not following any set of rules. This is how usually companies generate enough income to get their tokens listed in the coin market for trading. As the years passed, similar issues started to spring up and investors started to lodge complaints. Hence, institutions started to track down such companies and found out most of these companies were a scam and hence lead to the birth of Security Token Offering, STO. STO is a form of regulated ICO and complies with government regulations hence much safer than its predecessor. Here, the companies sell out security tokens to investors and these are very huge amounts of money. This cuts out a lot of potential investors, limiting the chance of the token succeeding since the market may insufficient. This still leaves a potential problem for the company that wants to issue the token. Here, IEO was introduced.

Now, Just like ICO and STO, IEO is a fundraising platform that involves a cryptocurrency exchange to manage the platform and regulate its operation for a period till the token is listed on the coin market for trade. IEO solves the security issue from ICO and opens up the requirement circle the STO platforms face, allowing a lot of potential investors to attain the token, and increasing the chance of the token succeeding in the market trade.

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It must be noted that IEO is fully centralized as it is regulated by the Cryptocurrency Exchange(CEX), which is also a centralized system of trading crypto tokens. The IEO initiates a three-way working protocol where the company that wants to list the company just provides the cryptocurrency token and pays a Listing Fee to the CEX, the CEX vets the investors to see if they are eligible to invest, regulates the sale of tokens to investors and marketing the token, trying to ensure the success of the token market and the investors get to feel safer with the tokens being managed by a known trustee. This creates a win-win-win situation for the three parties. The company can concentrate on building the crypto token. Like I explained earlier, with IEO, the CEX regulates and determines the success of the market of the suggested token by doing a "test run" in its IEO platform. Here, investors familiar with trading with the CEX can look up these tokens and after research, can decide to invest. This generates enough funds to run the building of the token as the exchange brings the investors to the companies. The CEX initiates Know-Your-Customer(KYC) and Anti-Money Laundering(AML) protocols to provide a more secure environment. What makes IEO different from the rest is that in IEO, a CEX manages the sales of the tokens to the investor, unlike the ICO and STO where the company manages that itself.
A good example is Binance Launchpad. This is one of the reputable CEX and the number 1 when it comes to CEX. They follow strict protocols when it comes to trading and also follow KYC protocols, making it safe to invest. Binance does well to offer a bit of information on the IEOs it hosts so investors can be pre-informed about them before investing.

Binance Launchpad

Do you consider IEOs an advantageous way to invest? Explain.

Due to the problems ICO and STO brought up, I believe IEO is an advantageous way to invest.
Why?
Using the IEO is safe since it is managed by a CEX, which is a trusted platform that handles and managed crypto. It is used by many people and it follows strict protocols just to operate. It usually requires a KYC protocol that requires users to provide accurate information to register like passport information or driver's license, which are extremely sensitive. These can help track down users if something goes wrong. So the possibility of being scammed is lowered as compared to ICO.
Also, there is usually a low fee to acquire tokens and this expands the range of requirements for investors to partake in sales of the token. So, a lot of investors can get to buy the token and as they say, the more, the merrier. This, in turn, increases the chance of the token succeeding since the market volume is steadily increasing which of course is the primary goal of every investor, to maximize the profit gains. As we can see, IEO almost solves the problems faced by ICO and STO, putting the minds of investors at ease. But it goes without saying, it is highly recommended that the investor does intensive research about the particular token he/she wants to invest in pre-sale before actually putting in money, to see if the risks are within the margin of capability.

List advantages and disadvantages of participating in an IEO.

Advantages of IEO	Disadvantages of IEO
IEO are extremely SAFE to participate in. This is because the CEX managing the project follows strict protocols to enlist IEO projects of companies who want to introduce new tokens to the blockchain for trading. Most of the CEXs have a high reputation to maintain to continue to gain users to utilize them and hence make it a necessity to do due diligence and check out the company issuing the token to the IEO project. This prevents the incidence of scamming on the part of the company and the investor. Also, they engage the investors to go through KYC and AML protocols to ensure there is transparency in all transactions throughout the IEO project period	There is NOT ANY GUARANTEE that the value of the token to be listed will skyrocket. This is due to the dynamic sentiment of investors. The value will keep fluctuating as per the trend the market will take. There is an equal chance of it losing its value as well. The sentiment of the investors can hardly be predicted and hence the IEO is not a sure way to conclude that the value of a to-be-listed token will rise.
The IEO project DEEMS TO BE VERY PROFITABLE to the liking of investors. This is because there is a lot of support from various institutions that the token receives. Also, there is a buy low, sell high psychology surrounding the who initiative. Hence, there is a high probability that after the token has been listed on the exchange for trading, it will rise to a higher value, bringing a lot of profit to the investors who bought the token.	There may be an issue with HIGH LISTING FEES amongst reputable CEXs. This might create a problem for companies that are now growing, pushing so much capital before even making enough money and also being taxed with high tokens as commission when tokens are sold. This may discourage companies from starting any projects to issue new tokens in the blockchain that can suit different levels of investors.
This also proves to be a GOOD INVESTING GROUNDS for new investors, especially those new to the blockchain. It offers an optimum environment for newbies to practice what they have learnt at a reduced risk. This creates a new era of investors, expanding the blockchain ecosystem. This will boost crypto to a whole new level in the world of investment.	Since IEO is hosted on CEXs, there is the ISSUE OF SOME INVESTORS NOT BEING ELIGIBLE for participating in some potential IEO. This is because some CEXs are available to specific countries and hence investors outside the countries may not have an opportunity to engage themselves in some of the CEXs
There is SMOOTH RUNNING OF THE IEO PROJECT because these are managed by CEXs. The company will only have to focus only improving their tokens and leave the management of the transactions to the CEXs, and as we are aware, CEXs are very reliable when it comes to processing transactions.

Explain how to participate in an IEO, for the process explore various exchanges, choose one of them and explain the process. (Please use screenshots.) (No need to participate, just register, present proof of verified account and explain the whole process, do not use Binance)

As we know, IEOs are hosted of CEXs and hence we will Explore Coinindex, One of the CEX hosting various numbers of IEOs. The goal is to find one IEO that suits your taste. But since we are new to Coinindex, we need to register so we Click the "Sign up" button first.

Coinindex

You can click the "Register" to create an all-new independent account. You can also choose to connect an existing Facebook or Google account to link with, Here, we chose to link to an existing Google account since the Google account is very secure.

Coinindex

We now connect to the Google account.

Coinindex

After that, we get to see the list of IEOs being hosted by Coinindex. We can surf through all of them, and research about them. After, we can choose whichever suits our taste. But for this lesson, we choose to take a look at Kalycoin IEO.

Coinindex

We can read all that KalyCoin is about, their project and tokenomics. When we decide to invest their money into their tokens, we can click the Launchpad or we can go to the IEO website. But we chose to go to the website of the IEO directly.

Coinindex

We can explore the website of Kalycoin as shown below. We have the time remaining for running the IEO project and the buy option there. You can choose to invest by clicking on the Buy button as shown here.

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As soon as you click to buy, you will be directed to a page to download TrustWallet to initiate buying. This is the wallet that Kalycoin uses.

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This illustrates how the transaction in an IEO project in the blockchain.

As an example of a project that had a successful IEO, explain that project. Be on topic. (Use from screenshots.)

One IEO has had a very successful trade after it was introduced in the exchange. This was Voxies IEO, which was a free-to-play, 3D tactical RPG game on the blockchain. This was an IEO where players are put in teams and pitted against other players to fight, Just like in League of Legends. This was available on the Ethereum blockchain. This was hosted on the Coinindex CEX on December 14th, 2021 and ended that same day.

Voxies IEO

This was mainly hosted on the Binance Launchpad though. The token which was used was Voxel and the conversion was 1 Voxel = 0.2 USD( price was subjected to the amount of BNB tokens held in the wallet). The total token supply was 300,000,000 Voxels and the hardcap per user was around 75,000 Voxels(15,000 USD), meaning no one was allowed to earn more than 75,000 Voxels. The token supplied to the Binance Launchpad was 10% of the total token supply. This was deemed a high-risk investment though. The session was paid by staking an amount of BNB and this was subject to the amount available in the user's wallet. The tokens were earned as rewards for the in-game activities and also used for purchases. Users participate in PvP matches.

Gameplay

At the end of the IEO project, the value of Voxel was pegged at 2.53 USD as seen below.

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This is a significant increase in the value of Voxel. Later on December 15th, 2021, the price shot up to 4.38 USD with a market volume of $1.04B, which shows that the investment was profitable.

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Again on December 16th, 2021, the price shot up to 4.79 USD and a market volume of $979.59M, a significant number. This shows how well the token was doing in the market.

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This shows a significant increase of value from 0.20USD to currently 2.94USD, a 1470% increment in value. This shows how the IEO was successful.

Conclusion

We now understand how IEO can help people learn how to invest and where to invest their money into. It provides an optimal environment to gain new experience and also take advantage of incoming tokens that can have the potential of becoming a good investment when it is listed on the trade exchange. We must develop this system more to raise more potential investments and investors.

Thank you for reading Prof. @nane15🙏🙏🙏🙏🙏🙏