The Impacts of IEOs on the crypto-ecosystem

[coin-investor]

Great points, these IEO are now exchanged new cash cow, they should do everything they can to protect their interest,  if they are just going to go for a pump and dump project and the project that they are going to list doesn't have anything to offer to the crypto world, then they are worse than ICO.

[1714580888]

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[Mrsparks]

It is evident that IEOs may get basterdized soon as many people have suggested because it has now become a manipulative tool for exchanges to pump and dump their native coins on people. With time, as the negativity spreads and get more members of crypto populace unhappy, IEO will be dead

Hmm I even heard some of this exchange buy back the coins themselves that's why many people don't get to get any during the event.. The buy and pump it themselves,then dump on traders....very disheartening..

[Ibrash600]

One of the main advantages of IEOs is trust. As the crowdsale is conducted on a cryptocurrency exchange platform the counterparty screens every project that seeks to launch an IEO on its website. Exchanges do this to maintain their good reputation by carefully vetting token issuers.

Therefore, IEOs can eliminate scam and dubious projects from raising funds via cryptocurrency exchange platforms, and it becomes much harder to scam contributors with IEOs.

[Kokoshayo]

In as much as I share your view on these negative impacts, I don't agree %100 with you. From the look of things, it's positive impact outweighs the negative. Only top exchanges are coming up with IEOs, this gives the project a credible reputation and thus able to pull in more investors into the cryptosphere. These projects also form partnership with these exchanges and this partnership of trust instantly becomes a key part of the value proposition and benefit to all parties, including investor and even traders.

[Nezerlan]

IEO which in full means initial exchange offering is not a new topic in the crypto eco-system. Long before Binance Launchpad, several projects have taken that path to raise funds for there project by offering the native currency of their platform to traders on exchange. I remember observing a few on mercatox some years back. It was definitely no big deal as at that. Today IEO has become a menacing rave in the crypto-space owing to the fact that majority of the ICO in time past have failed to list on reputable exchange for investors. regardless of the hype and uniqueness of a project,  securing reputable exchange with good trade volume is key to the liquidity of digital assets and sad to say it today's crypto investors don't want to wait for products. They rather sell the hype than wait for the long term yield that will accompany this project gaining real-life application.
The impact of this IEO model proposes three debilitating factors on the blockchain community.

1. Lack of widespread distribution of nodes and monopolization of the. Today's IEO model literally plays into the hands of whales. With the likes of bittrex favoring high purchase by a single user. It's not hard to see whales controlling the valuation of these upcoming projects cryptocurrency on exchange. Asides from prices, centralization of nodes can be dangerous as it can lead to treats on the network with respect to mining. A Single-user acquiring a subset of the network can be catastrophic.

2. The IEO mechanism does not truly favor long term growth of this project. Now it's important to note that the majority of these coins sold on exchange are bought not by investors but by traders who actively trade on exchange. Majority of this traders do not no a thing about this project and will dump at the slightest profit or in the face of the slightest loss. Some might say it's part of the market cycle. Weak hands selling to stronger traders but it's key to note that community is very important in crypto compared to other market and it's almost impossible to build suck around traders who do not care or look towards the success of this project.

3. This exchange is also doing too little to protect the interest of participants who take part in these IEOs. In my opinion, it shouldn't just be about raising funds and meeting Hardcaps. These exchange should take up more roles. Some examples I picked up from the Pledgecamp project concept includes. Strategic disbursements of funds raised during these IEO events based on achievements of milestones, certification and other pre-agreed terms all design to ensure this project doesn't just bail off with people's money or fail to develop products that can attract value to the native currency.

In conclusion, a lot more tinkering needs to be done in order for IEOs to continue to flourish and promote the growth of the blockchain community. If steps aren't taken to prevent these impacts, we might see the IEO trend failing just like the majority of ICOs have failed.

The blockchain community by now should be getting used to trends. Just like every other trend the cryptocurrency ecosystem has witnessed I think this phase will pass away too.. People should just enjoy the ride while it last and get ready to exit once scammers begin to perforate the IEO mechanisms.

[anexxty009]

Yobit is one of the exchanges that do an IEO in the past, and they are still doing it now, but Yobit has a bad reputation and so are those projects that they do an IEO, this is thr latest craze in crowdfunding, until now I haven't saw a failed IEO, they are performing well in the market.

This just made me remember how many times Yobit have failed yet they were one of the first exchanges. I turn to agree with you for the fact that since the Launch of binance IEO,  there have not been one that have failed but yet there are more to it that we are yet to see.  

IEO have restricted a lot of potential but low jncome earners from participating due to some of their minimum contribution factors stated, e.g minimum deposit,  verification process on exchanges etc

Also more of this investors (whales) turn to control the market hence they project states decentralisation as their core motive

To add the developers can in turns dump the tokens on investors since they are mostly allowed to send all tokens on to exchange

I will say the arrival of IEO's benefit is temporal and limiting a lot of individuals and that in the future it is dangerous  

[mexite]

IEO is not entirely a new concept or crowdfunding model, it has been existing for a while now albeit on less popular exchanges. However, it became more popular with the entry of Binance and other top exchanges. These exchanges are leveraging on the trust and reputation they have but over the years to support crowdfunding for new blockchain projects and their customers expect that they would have done due diligence on the project before agreeing to raise funds on their behalf.
That said, the major demerits asides the ones you have listed are that few people tend to own a high number of the coins/tokens enabling price manipulations by these fee whales, even while the project is yet to have a product. With more exchanges launching their own IEO platform/launchpad, it's evident everyone is just in for the money. This model of crowdfunding will become saturated soon and unappealing, hopefully the project developers won't drag their name in the mud along the line.
In all, it's not good for the blockchain development in the long run because there is no community backing, so developers are not answerable to anyone and may rogue on the exchange that supported them early. Additionally, as we know that core of blockchain is decentralization, with exchanges holding IEOs, the more it becomes ironic.

[lasisi1]

In my opinion, the IEO rave is just a mirror image of what cryptocurrency has resulted into.. Which is a get rich scheme. I heard people are setting up centers for buying into this IEOs just like we had in the days of Lending coins. The exchange makes it even worse by allowing a single user buy such high amounts . There is a total lack of transparency in the entire process and a lot of shadiness behind the scenes.. This Model of fundraiser is definitely not ideal for the growth of the crypto ecosystem..

[tamango]

I think that IEO is an interesting option but does not changes that fact that many new projects simply don't have innovative and concrete ideas, that's the main problem that most project have and I really hope that some good project will come out so that investors can really come back to this market.

[Augustyusuf]

I think IEO bring positive effect for crypto currency, and start making trust again for investor who already losing it,  and be prepared guys, bull run will come very soon.

[adrianto1995]

IEO is something most hyped now, because of Binance with their successfully IEO that makes other exchanges follow them. Just enjoy these waves, it's a good time to multiple your money. I raised a lot of money while joining FET and CELR IEO...   
But make sure you are only choosing the right IEO before investing...

[celot]

Big effect for IEOS and make ICO project will be dump because many investor always interested with IEO and have sold out just few second, many platform make IEO and have lower interested for investing on ICO.

[lasisi1]

IEO is something most hyped now, because of Binance with their successfully IEO that makes other exchanges follow them. Just enjoy these waves, it's a good time to multiple your money. I raised a lot of money while joining FET and CELR IEO...   
But make sure you are only choosing the right IEO before investing...

My worry is that most of this exchanges ought to also think outside the box just like CZ has done so that it will bring about healthy competition....take for instance Kucoin copying the same lottery format binance has just introduced for their next IEO says it all.....Bring different ideas so there will be healthy competition because now all I see is this will bring rivalry amongst exchanges and it’s actually not healthy for this fragile near bull run market.

[lasisi1]

Big effect for IEOS and make ICO project will be dump because many investor always interested with IEO and have sold out just few second, many platform make IEO and have lower interested for investing on ICO.

The way the trend is going now I really don’t see it lasting long because investors will come to realize that this exchanges are doing this for personal gains holding up almost percentages of the coins and releasing it to few peeps considering the fact that we can’t even see the transparency in all what is being done by the exchanges only for us to hear that sales has probably ended with few seconds.....I don’t really see it stand the taste of time because those that probably got in believes they are 100% sure of making atleast x5 of their investments while other investors coming Afterwards will start thinking of twice of buying ATH

[Cryptoobiobi]

I want to believe that all projects listed for IEO are completely vetted by the exchanges before approval is granted and even though these exchanges have a clause saying that "they are not part of the development of these projects" but its important to note that, they have in a way linked themselves to these project by accepting to partner with them in terms of the IEO.

A lot has been lost to fraudulent ICOs, since only vetted and seemingly good projects will be featured on IEOs, IEO is fit for the modern clime. However, exchanges need to work on the demerits and focus on ensuring that a vast majority of prospective investors take part in the IEO.All IEOs need is regulations and I believe exchanges like binance and Huobi are making new rules, others will follow soon.
Moreover since IEO is more sure than ICO and IEOs are listed automatically, many investors prefare them to ICO. Many ICOs are still struggling for listing even after several months of completing  ICO while others don't list at all.
Again with the ban of ICOs in China, Chinese investors and others can partake in IEO since its legal and done in exchanges

You can visit my thread on all you need to know about IEOs for more info https://bitcointalk.org/index.php?topic=5128008.0

[Osaremien]

I am in support with majority of the points raised in this thread, but i will like to ask, in what ways can a single user owning a large portion of the supply of a cryptocurrency affect the blockchain network?..

[Lektai]

To me ieo is nothing new, as it had been going on the cryptocurrency sphere for quite some time now, the only rave about it now is that it's been offered by exchanges who have a lot to loose if the ieo fails, its just like the ico rave of 2017, for now people should enjoy the ride but do it with caution

[el kaka22]

It just makes sure the ICO that we used to have has been vetted by the exchange as well, it just drops one aspect of the research. We always invested ICO's and hoped that it would be listed on a good exchange, now with thanks to IEO we know that it will be listed there sooner rather than later, some IEO get listed right after the IEO is done, some a bit later but all of them will be listed eventually.

Knowing that gives a breathing room for investors and they know that what they funded will open to trading soon and thanks to that they will probably not lose too much money. Whatever enters the trading realm on exchange usually drops a bit first (the initial dumpers) but usually recovers after couple of weeks and IEO makes sure that period is over with quickly.

[laskybok]

Yobit is one of the exchanges that do an IEO in the past, and they are still doing it now, but Yobit has a bad reputation and so are those projects that they do an IEO, this is thr latest craze in crowdfunding, until now I haven't saw a failed IEO, they are performing well in the market.

This is where those who invest in IEO need to be careful. Not all is worth investing in, just like it happens to other forms of investments.
It is good we already have exchanges who would not want to taint their image and will be careful of the project that comes to their platform.

[Rainmaker45]

Its an important issue you've raised. Crypto is a new economic frontier and there had been new experiments every time.
But with IEO, failure of them would also affect the exchanges, their credibility and trust. Though exchanges do make sure to state they are not involved and risk remains about investment, people would not view it as so.

Exactly..From last year till this year exchanges looked like the only thing that was working In crypto..With some becoming highly reputable and attracting interest from all over the world. I just hope this trend won't end badly with scammers infiltrating the IEO system as a result of these exchange not doing enough to safeguard the interest of IEO participants both during and after the sales event..

I think majority of you guys speaking bad about IEO are only doing so because u failed to buy. There is nothing wrong with IEO and this mechanisms of fund raiser has come to stay.