Ok Jumpstart – OKEx’s New Initial Exchange Offering
The OKEx trading platform has confirmed the introduction of its Initial Exchange Offering (IEO), known as Ok Jumpstart. The platform is intended for supporting blockchain-based startups in launching their tokens on the OKEx cryptocurrency exchange. According to OKEx, the IEO allows project teams to focus on their goals by sparing the time and resources used in getting listed on exchanges.
The Differences Between IEOs And ICOs
The main difference is that unlike ICOs, IEOs are not open to everybody. To participate in the token sale, investors must be active users of the exchange platform offering the IEO. This is because IEOs require users to buy token using the exchange’s account, whereas, in ICOs, users can buy tokens by sending funds to a designated wallet address.
Theoretically, the concept of ICOs is better than IEOs. The problem, however, is the prevalence of fraudulent ICOs, which has greatly impacted their credibility. IEOs, on the other hand, are more genuine and the security of user funds is guaranteed by the hosting exchange.
IEOs are less risky than ICOs. For customers, the exchange platform helps in preventing fraud, as well as guarantees the liquidity needed for trading. Also, customers benefit from the custodial services for digital assets offered by the trading platforms.
Similarly, project teams can ease operational hassles by adopting IEOs. For instance, the exchange takes care of the KYC/AML compliance processes. Further, the exchange provides liquidity for the project’s clientele.
The biggest shortcomings of the IEO model are its lengthiness and expensiveness. Both users and project teams are required to accomplish several processes during an IEO token sale. Regardless, its demands are worth the extra security that it has over the ICO model.
Increasing Popularity Of The IEO Model
Besides OKEx, Bittrex is the other exchange platform that already has a running IEO token sale. It is expected that in the future, these platforms will compete effectively with decentralized exchanges.