At the beginning of the new year, the coin opened the curtain of the IEO "issuing the first exchange" stage, which shaped the myth of BTT.
The IEO is like a charity in the snow, giving hope to the hopeless exchanges and hungry leek in the bear market.
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At that time, the parties had different views on IEO. Exchanges such as KuCoin believe that this is the way to recommend boutique projects for users. Each family is imagining and emulating a similar model; but some radicals believe that IEO is just another round of tricks to cut leeks…
After a few months, what did the IEO bring? The Odaily Planet Daily interviewed a number of retail investors, exchanges and projects. How would they evaluate the IEO?
"IEO and even the entire currency circle are actually traffic business." Some people expressed their feelings.
Obviously, the IEO melee did not change the exchange structure. The three major exchanges, namely, the currency security, the fire currency and the OK, have harvested a large amount of traffic through the IEO; however, some exchanges that imitate the IEO model have not gained traffic, and even the original word of mouth has been corrupted by IEO. Gate is a typical representative.
Some IEO project parties have received financing and publicity, and some have been nicknamed for currency prices. How much does the user earn from IEO?
The undercurrent is surging under the bustling. The IEO pattern is getting worse, and it is still unknown whether it can survive for a long time.
Retail investors: the short-term income is hard to find, not as good as the platform currency
When it comes to the “IXO” model, many people will think of the ICO (Initial Coin Offering), which was once a smash hit in 2017 and is a myth.
However, over time, ICO problems continue.
According to the Stalis Group , 78% of ICO projects in 2017 eventually proved to be a scam, 7% of projects failed or died, and only 15% continued to trade on exchanges. Even on the exchange's projects, many projects have broken, the wealth effect is no longer, and investors' interest in ICO has plummeted.
“One of the benefits of IEO is that the exchanges screen items directly on the exchange, so don’t worry about running on the project before,” said investor Shen Mu. He has invested in an ICO project called the Six-Point Guild. However, the project had already run before the project, and Shenmu lost 100 ETHs (about 600,000 yuan).
Previous ICO fundraising basically went through several processes: project initiation – private placement – public offering – on the exchange. The IEO model eliminates the project-side public offering, which is funded by the exchange and directly credited the exchange.
“ICO is a stupid game. Every year, the project is very scarce. It is even more difficult for the project to be recognized by the big exchange. During the IEO period, the platform has helped us to screen the project.” Senior blockchain investor Wheat said.
Most retail investors have similar ideas to wheat, and the IEO project has gained a lot of popularity, and it is hard to find a sign.
Xu Kun, vice president of OK strategy, also believes that this type of current is more suitable for retail investors, which is equivalent to the risk control in the exchange.
However, Xu Kun also said that in addition to relying on exchanges to screen projects, investors themselves should also strengthen their awareness of investment risk management and control, and should deepen their understanding of the project to prevent potential hidden dangers.
According to statistics from the Odaily Planet Daily, the IEO projects of the three major exchanges have experienced a decline, but most of them have risen to varying degrees so far, and the maximum profit can reach 2-46 times.
(The three major exchanges IEO project, Note: the fire currency project is not financing)
In addition to IEO, OK has only launched three projects in the past three months. The currency is on average 5 items per month, of which the highest in March, 7 items on the line; the fire coins are launched 4 times per month through FastTrack. However, none of these projects have received such high attention from the IEO project, and the market has performed poorly and some have even broken.
(Nearly three months non-IEO channel on the currency project)
If you grab the IEO share, users will certainly earn it. However, the success rate is too low, and it is a pick-up in the secondary market.
Many investors have concluded that investing in IEO projects is not as good as “investing in exchanges” – that is, direct speculation and investment in platform coins.
"The most profitable person in this wave is the person who holds the platform currency." The BTC-based wheat is credited to BNB through the pledge BTC to participate in the IEO; after the end of the IEO, the token obtained is sold, and the monthly income is 5%-15%. But he admits that the income is still better than the platform currency.
The words of wheat are not empty. Compared with the income of dozens of times of IEO projects, the gains of platform coins are small, but they are "stable". Since the beginning of this year, the cumulative increase in platform currencies of the three major exchanges has exceeded 200%: BNB (440%), HT (272%) and OKB (230%).
Exchange: brand exchange traffic, lively is still head
Last year's bear market led to a different degree of decline in the trading volume of the exchange, and some small exchanges even shut down directly.
The essence of IEO is the exchange of exchange brands.
"Cryptographic currency transactions are essentially the same as the Internet, and they are actually a traffic business." The ETM team told Odaily Planet Daily that the IEO model can activate inventory users and bring incremental users to the exchange.
The launch project, especially other competitors, does not have this project, and can aggregate all traffic focused on this project to the trading platform.
An IEO project party revealed that an exchange has signed an exclusive agreement with it to require that the project not be able to go online to other trading platforms within 2 months to prevent traffic from being robbed.
The effect of IEO is significant. According to Tokeninsight data, exchange volume has been on an upward trend since February 2019, and the transaction volume has doubled from January to March.
At the beginning of this year, the bull market has not yet shown signs. Spot market trading was weak, with global cryptocurrency trading volume of just $15 billion in early January.
With the popularity of IEO, the new gameplay has also increased the activity of market transactions. Until the Bitcoin recovery on April 2, the global cryptocurrency day transaction more than doubled to $33 billion.
"Before everyone said that the contract (depth) is very good, now the spot transaction volume and daily activity of OK have increased a lot. In a way, Jumpstart contributed a lot of power." Xu Kun told Odaily Planet Daily.
IEO is equivalent to brand gambling traffic, and the exchange has spared no effort to promote the project. The IEO project is more deeply bound to the exchange brand. Once the project is broken, the reputation of the exchange will inevitably cause serious damage.
In April of this year, Gate Exchange launched the first IEO project CNNS. After the project went online, it opened higher and lower, and the next day directly squatted, triggering investor rights protection.
"But's (Gate predecessor) accumulated word of mouth, so that the "CNNS incident" was ruined. "Investor Chen sent out a feeling, "If the platform IEO project is not good, I will think that your platform is derelict. ”
He told the Odaily Planet Daily that it is currently only involved in the IEO projects launched by the three major exchanges. "The three major (exchanges) projects, the rate of return is relatively high. Small exchanges are still forgetting, the risk is too high, the break is serious."
According to CryptoRank , the top five platforms in the history of IEO are: Gate (1237%), Coin (1039%), OKEx (684%), Fire (640%), and BitMax (437%).
IEO is a double-edged sword, and the exchange is more cautious when it comes to IEO projects.
“IEO is also a better brand building tool. If the previous project is not good, it can go offline directly. Now it is more harmful to the brand. The IEO project has the endorsement of the exchange, and the input cost is greater, which means it has a stronger motivation to review the project.” OK researcher Zhao Xuchu explained.
It is understood that Jumpstart's operations team needs to talk about a dozen projects each month and select one project to go online. In this regard, Xu Kun commented, "It is not necessary to go online one month. If there is no good project, you can not push it. In the screening project, the platform must be lacking."
On the project issue, the exchange's audit criteria are also more stringent. “In the OK review standard, the technical strength of the project is the most critical indicator. The project selection is more inclined to have a technical team, must have code development capabilities and achievements.” Xu Kun said.
In addition, OK also requires that the project founding team not only have technical staff, but also members who understand the cryptography or blockchain foundation. The project cannot be discussed on paper. If the project is endorsed by a large institution, the possibility of approval will be higher.
Project: Public relations needs are greater than fundraising
“IEO means that public relations needs are greater than fundraising needs. We will not use IEO to raise funds at all.” An anonymous project told Odaily Planet Daily that “it is a traffic rush and no meaningful fundraising.”
Many investors and project parties told the Odaily Planet Daily that the general project parties need to pay a certain amount of “market-making” fees to the exchange before the IEO fundraising on the online exchange, if they want to go to the three major exchanges (fire coins) , coin security and OK) IEO, this market-making fee will be even higher, and the exchange's last fund-raising money compared with the market-making fee is simply a drop in the bucket.
The farce of the digital currency exchange Bibox and SKR tears open the last piece of IMO's fig leaf.
In April of this year, under the wave of IEO, the Bibox IEO platform Orbit launched four projects in one breath.
According to the SKR project interviewed by 31QU, Bibox promised to start SKR at the beginning, and as a starter, SKR would pay a “guarantee” of 200,000 USD to Bibox; and ask them to pull the price to 5 to 10 times after they went online. There is a need to pay another $1.25 million to $2.5 million, while SKR plans to raise only $250,000. SKR was unable to afford the high market-making costs, and the conflict with Bibox was intensified.
It can be seen that compared with the market making and the issuance expenses, the money raised by the project party is simply a drop in the bucket.
“In fact, many IEO projects are very poor. The biggest advantage of IEO is that it has gained a liquidity. Maybe it makes market capital and the money it raises, but it gets liquidity, and then it can pass some other The way to cash in." Standard Consensus Senior Analyst Li Zipeng said.
“The core of IEO is the traffic business. In the first phase of the project, the entire transaction volume will be concentrated on this project, and the attention will be very high.” The ETM team who had conducted the IEO at OK also believes that traffic is the key. “The bull market has many projects in a month. The bear market IEO model has several projects in a month, and the project discrimination will be very high.”
As for fundraising, ETM said that fundraising is not the focus of its attention. "2 million, 3 million US dollars, not a big deal for the project, but IEO can get a lot of attention and traffic from C-end users."
The exchange will use its own resources to support the IEO project announcement, and even actively help the project to mediate the media.
“From the results, the price/performance ratio is relatively high, and we are still quite satisfied.” ETM said that after the IEO, the ETM currency address doubled.
Therefore, ETM believes that the IEO model is currently suitable for three types of projects: one is a project that requires less traffic before it is announced; the other is a project with strong financial strength, because the market value management and declaration in the IEO process need to spend money. Third, in projects with more financing and higher valuations in the bull market, some tokens can be sold at discounts to increase liquidity.
How long can IEO play?
For IEO, retail investors have developed an established perception: if the project party does not pull the plate, it is to cut the leek. Most of the public opinion and financial pressures are concentrated on the project side.
Many industry insiders always believe that the quality of the project is the most important factor in the sustainability of the IEO model.
The IEO really boosted the enthusiasm of the digital currency market this spring, helping the market recover from the bear market downturn.
“In the short-term, IEO is indeed successful, but in the long run, it will gradually decline. The short-term success is because IEO has indeed boosted the market enthusiasm, and it has also reached a record high in terms of the amount of financing in May. It is said that it will not succeed in the long run because it is The model is not sustainable. First, it lacks the necessary supervision. Second, under the competitive landscape of multiple exchanges, the decline in the quality of IEO will become inevitable,” said analyst Guo Yajun.
According to Inwara's data, as of June this year, only 30% of IEO projects have the lowest functional realization products (MVP, Minimum Visible Product), and the remaining 70% of IEO projects cannot prove the ability of project development.
He observed that since the rise of the IEO in March, the premium of the new IEO project has become lower and lower after the launch, and the break rate has become higher and higher. After the peak of May, the amount of IEO financing has become lower and lower.
According to the latest data from coinschedule, IEO began to fall rapidly after a global high of $1.1 billion in May. The amount of financing in June was only $100 million, even lower than the total amount of financing in April.
Even if the bear market is gone, under the bull market that belongs to only BTC, the IEO of the big exchange is one of the few ways that the small currency can get attention.
Unfortunately, the dividend of IEO is not much.
Author | Qin Xiaofeng, Wang Ye
Edit | Lu Xiaoming
Produced | Odaily Planet Daily