IEOs are a more restricted type of token issuance, as, unlike ICOs, they require a trusted third party to operate. In this case, the third party is usually an accredited exchange. An IEO can happen in two ways: through the exchange or by a third party using its platform. The first model is the most common and with the most successful examples. The exchange creates and distributes your token.

The fundamental factors that institute IEOs are:

  • Security and credibility of a platform recognized in the market;

  • With an IEO, the user has access to a large consolidated customer base;

  • The token has a greater chance of being traded and, therefore, gaining liquidity in the market;

  • Exchanges have risk assessment mechanisms for each project, reducing the possibilities of fraud and losses for the investor.

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