Crowdfunding is a standard procedure many startups and entrepreneurs use to raise funds and start their own businesses. Here you can collect the necessary funds from many investors. In this traditional mode of crowdfunding (initial public offering), funds are raised by selling a portion of the company’s shares.
On the other hand, cryptocurrency crowdfunding is also a method of fundraising in which funds are raised using crypto tokens. The crypto ecosystem is dominated by various cryptocurrency fundraising models such as ICO, STO, IEO, IDO, IFO, etc. The most popular methods are Initial Coin Offering, Security Token Offering, and Initial Exchange Offering.
P2B, a crypto fundraising platform, offers you several solutions to secure all the gains your project gets during IEO or IDO crypto events. You can simply jump to the listing or try out additional advanced strategies; we’ll provide test results even there.
What is Crypto Fundraising and why is it needed?
The concept of fundraising has been popular for the last hundred years. Every person starting a new business will obviously need to raise funds to open it. Many fundraising methods are used to raise the required capital, such as finance, bank loans, peer-to-peer lending, etc.
After that, many new fundraising methods emerged. In this regard, many new methods of crypto-crowdfunding were introduced after the advent of cryptocurrency, which is successfully used in the crypto market. To start a cryptocurrency fundraising campaign, you must have your own crypto token.
What crypto-fundraising methods are there on the P2B platform?
IEO (Initial Exchange Offer)
The Initial Exchange Offer is a well-known cryptocurrency fundraising method many startups and entrepreneurs use to raise funds. A fundraising startup will create a crypto token and a white paper. An IEO is similar to an ICO, where the sale of tokens will be carried out by the exchange, and the funds will be collected by them and then transferred to the startup.
Central authorities will be involved in an IEO when an exchange conducts a token sale. You must register as a startup on the exchange, KYC will be verified, and funds will be raised accordingly. It is also considered a safe method of crypto crowdfunding. To launch an IEO, you can turn to a top-notch IEO development company in the crypto space. Find out more here.
Benefits of presenting your token through IEO
- More legitimacy
- Startups don’t have to worry about selling tokens
- Convenient interface
- Speedy process
- Secure token sales are in progress
IDO (Initial DEX Offer)
IDO is a crypto fundraising approach that pools investment capital from retail investors. IDO was created to compensate for the shortcomings of the “traditional” ICO crypto crowdfunding model. Because IDO operates on DEXs instead of a centralized exchange, DEXs can be considered decentralized liquidity exchanges.
IDO is the latest model for crypto projects seeking to raise funds from investors. But they are not without limitations. For example, DEXs are less scalable. ICOs and IEOs can often raise over $1 billion. For DEX, this is unheard of.
Benefits of presenting your token via an IDO
- Using smart contracts
- Providing instant liquidity after the sale
- No registration is required
- Available fundraising method
Liquidity pool-based platforms such as Uniswap are increasingly becoming the platform of choice for raising funding and distributing DeFi tokens. IDOs are gaining popularity and could become the new industry standard.
Currently, DeFi projects raise funds mostly through IDOs. But that doesn’t mean that projects from other areas of the crypto sector can’t use this funding model. Nevertheless, it is unlikely that IDO will completely replace ICOs and IEOs.
In 2019, Binance Launchpad alone hosted a total of more than 50 IEOs that raised more than $159 million. But IEOs were not as large and hype as ICOs-they did not create a new wave of hype in the cryptocurrency market.
Nevertheless, unlike ICOs, now IEOs are still a popular fundraising format for young projects, but most of them are not in demand among cryptocurrency users.
In addition, regulators, particularly the SEC, consider IEOs analogous to securities offerings. Therefore, this model is not used to raise funds among U.S. users of cryptocurrency exchanges.
For the trading floor, IEO is an opportunity to make extra money and get new customers who will come for prospective tokenization. For investors, the process of participating in IEO is very simple – you just need to register on the exchange. Token issuers also benefit from conducting IEOs on exchanges: it is faster and easier than conducting an ICO themselves. In addition, all exchange clients immediately become potential investors – there is no need to spend money on advertising, and the reach is much wider.
As cryptocurrencies and blockchain technology become mainstream, they have caught the attention of traditional gatekeepers. These include regulators, banks, and financial institutions. As mentioned, some rules can be helpful as this market is rife with scams and low-quality projects. Implementing investor protection and excellent stability through regulations may not be such a bad thing.
Crypto-innovations have come a long way in such a short time since the introduction of ICOs.IEOs, IDOs, and other newer innovations in fundraising are here and are rapidly gaining popularity compared to other newer approaches such as ICOs. What new crypto fundraising technologies will appear in the future? This remains to be seen.
IEO and IDO crypto-project funding methods are effective because they attract the token’s popularity and help trade it successfully. These activities require significant promotion and are often limited by the startup’s relatively tiny marketing budget. An IDO or IEO launch pad for selling cryptocurrency is best suited in this case. Starting a token sale with your cryptocurrency is easy on P2B. We have a carefully crafted launch process that ensures the success of the token sale and steady growth thereafter.
Attracting investment in young crypto projects is getting more sophisticated every year. However, this does not mean that you should blindly rely on the integrity of issuers and the security of the trading platform in the case of IEO and IDO.
That’s why we remind you that before investing in any project – study its white paper and technical documentation, look for information about team members and developers’ experience, as well as reviews of other cryptocurrency users about the project.