IEOs Boost Exchange Tokens, But Cannot Tinder the Next Bull Run
Since Binance restarted its Launchpad platform in 2019, the exchange has recorded gains of over 270% from three initial exchange offerings (IEO). As the new fundraising model is starting to gain popularity, many other green-eyed major crypto exchanges, including Huobi Global, KuCoin, and ZB.com have launched their own IEO derivatives, which were both exceed market expectations.
Recently, Huobi Global has launched its first “selective token sale” of TOP Network on its exclusive token launching platform Huobi Prime. Although the token was sold in the three “Price Limit” rounds, every round sale ended in a few seconds, many investors were not able to purchase the token. Clearly, there is much more demand than supply in this market. Many believe that this new model may tinder the next bull run.
Compare to the traditional initial coin offering (ICO), IEO has less investment restriction, however, most of the IEOs have excluded the U.S. and Chinese citizens due to the regulation issue.
To the crypto exchanges, IEO is a grand innovation: it can be a solution for blockchain projects to raise fund, meanwhile, exchanges can promote their native tokens through the token listing platform.
As thus, many have expressed their concern of the ICO tokens, for example, Ethereum. This speculation is reasonable, at present, the traditional ICO model will be gradually eliminated, and the IEO would become the first choice for project financing. The financing advantage of Ethereum will be nibbled up by exchange native tokens.
For Ethereum, the work team should focus on improving its performance and waiting for the decentralized exchange to rise.
In addition, according to 8BTC, the craze of several IEO project and the short-term market speculation cannot boost the entire crypto market.
We can see that the recent IEO booms only lead to a price surge of exchange native tokens but have no significant effect on the prices of mainstream cryptocurrencies, such as Bitcoin and Ethereum.
IEO is not powerful enough to tinder the next bull run, but undeniable, it is an innovation.