For initial exchange offers, liquidity is the rule

There are many benchmarks for measuring the success of the IBE. The symbolic price, the size of the community, the code sent and the milestones met are all criteria to evaluate the progress of a targeted project. For projects seeking to create the biggest splash possible, liquidity is the crucial factor. The more an IOE achieves trade, the greater the chances of survival.

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Multiple exchanges multiply perspectives of projects

The initial exchange offers are large companies: according to Inwara, the IEO projects have reported $ 1.625 billion in the first half of 2019. The second half of the year continued this momentum, the main platforms of Exchange having maintained their aggressive program of IEO – one per month in the case of Binance. ; 24/7 in the case of small platforms such as Latoken. Investor demand for initial exchange offers also remains strong: the main crypto-telegram channels, maintained by Coinidol, attest to this, as investors claim to be aware of pre-sale and seed distribution rounds for projects that will eventually become IEO on Binance or Huobi.

The initial exchange offer has advantages for investors and project teams over the ICO, but is hampered by a flaw inherent in this fundraising model: there is often little incentives for other exchanges to exchange this symbol. As a result, most of the IEOs will live and die in the stock market that hosted their token sales. For the few IEOs that thrived after the sale, both in terms of symbolic prices and benchmarks, it is no coincidence that they transcended their issuance platform and obtained a great deal of liquidity at the time. during the process.

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Bittorrent remains the liquid leader

The most liquid IEO to date, based on the number of grants on which it is listed, is also one of the oldest: Bittorrent (BTT), launched on Binance last year. Today, it appears on 34 stock exchanges – 24 more than the next highest rated tokens. It is no coincidence that tokens listed on most stock exchanges – namely BTT (34), MATIC (10) and SERO (10) – outperform all others with respect to ROI and ATH KING. The correlation between the number of exchanges and the performance of the project is indisputable.

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For better or for worse, the IEOs have stormed the crypto world, but most projects will never see the kind of liquidity that Bittorrent and Matic enjoy. In fact, of the 65 IEOs launched in the last six months, the vast majority have not even managed to make it to a second exchange. The consequence has been limited liquidity, reduced accessibility / visibility and, in many cases, a project that has actually died before it has had the opportunity to develop a serious dynamic.

A last note on the liquidity of IEO: when it is to secure several listings on the stock market, quality beats the quantity each time. according to Cryptorank.ioBinance leads with a much higher average ROI for its listed chips (94.53%). The resounding success of Bittorrent played a role: it was the first IEO on Binance Launchpad, reaching its funding goal of $ 7.2 million in just a few minutes. Since then, each project has struggled to emulate this success.

Do you think that the OIEs have reached their peak or are they just starting to get started? Let us know in the comments section below.


Images reproduced with the kind permission of Shutterstock and Cryptodiffer.


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Kai Sedgwick

Kai has been manipulating the words since 2009 and bought his first bitcoin at $ 12. It's been gone for a long time. He has already written white papers for blockchain startups and is particularly interested in P2P exchanges and DNMs.

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