2019 was meant to be the year of the IEO. Or was it the STO? Whatever the case, it’s had its share of both, with mixed results. While the number of successfully completed token sales and the number of IEO launchpads has increased significantly, secondary market demand has been underwhelming. As emerging projects study the performance of this year’s favored fundraising vehicles, they’re faced with a conundrum: stick with a tested formula, or eschew the three-letter models for something new.
The Jury’s Out on IEOs
It’s hard to know what to make of this year’s initial exchange offerings (IEOs). Compared to their forebears – the projects that ICO’d two years ago – IEOs are clearly better in certain respects. Greater transparency, as mandated by exchanges, has prevented exit scams and compelled projects to actually ship code and build stuff. Greater liquidity, aided by the guaranteed exchange listing that comes built into the IEO model, has also been an improvement. Crowdfunding projects are better off this year, too: with the rise of token creation platform Simple Ledger Protocol, startups have the option of launching token sales on Bitcoin Cash, providing an alternative to the ERC20 token standard and the rising network fees on Ethereum.
But what about the quality of the projects themselves? This year, IEOs have brought us a whole lot of smart contracting platforms, dapp scaling solutions, and crypto protocols, but there hasn’t been much originality on display. Where the ICO era birthed prediction markets from Augur, a global exchange in Binance and decentralized token trading from 0x, today we have Elrond and Emogi.