The battle for market supremacy: Ido vs eio in cryptocurrency space
The world of cryptocurrencies has increased in innovative new entrants and funding models in recent years, but two of the most popular have been Ido (Initial Dumbole) and IEO (initial exchange offer). Although the two models share certain similarities, they also have distinct differences which can make an attractive for investors than the other. In this article, we will immerse ourselves in the details of each model and explore the one that could be better suited to market domination.
IDO: the initial shock absorber
The IDO model, the abbreviation of “initial dumbole”, is a relatively new funding strategy that has drawn significant attention in the cryptocurrency space. It allows companies to collect funds by listing their project on several exchanges at the same time, rather than by a single initial public offer (IPO). This approach allows projects to draw on the liquidity of different markets and to reach a wider audience.
The IDO model generally involves the following steps:
- Application process : Companies submit a request to list their project on one or more exchanges.
- Funding outlets : The company collects funds thanks to various series of financing, often in exchange for tokens.
- Registration fees : Exchanges pay costs to list the company’s project, which can range from 10% to 30%.
- Income sharing : The remaining income is shared between the investors who bought tokens during the financing tour.
EOE: the initial exchange offer
The IEO model, on the other hand, is an alternative financing strategy that emerged in 2019. It allows companies to collect funds by selling the native token of their project directly to investors at a fixed price. This approach was popularized by projects like Tron and Compound.
The IEO model generally implies the following steps:
- Sale of tokens
: The company sells its native token at a fixed price, generally with an initial token offer of 10 to 100 million.
- Exchange Listing : The token is listed on one or more exchanges.
- Revenue sharing : The exchange of exchanges are generated from the negotiation of the token.
IDO and IEO comparison
The two models have their advantages and disadvantages:
* Risk of diversification : IDO models allow companies to draw on different markets, which can increase the risks of diversification for investors. If a market is falling, it may not affect other exchanges.
* Less regulation : IDO models are often less regulated than IEO, because they do not imply the same level of tokenomics and safety measures.
* higher costs : IDO models tend to have higher list costs compared to IEOS.
Conclusion
Although IDO and IEO models have their strengths and weaknesses, IDO could be a better choice for investors who prioritize the risk of diversification. By allowing companies to collect funds via several markets, IDO models can increase the overall size of the market and liquidity, which makes it more attractive for investors. However, IEOS provide lower costs and potentially greater control over the distribution of tokens, which can appeal to certain investors.
In the end, the choice between IDO and IEO depends on the tolerance to the individual risks of an investor, investment objectives and preferences. By understanding the advantages and disadvantages of each model, investors can make informed decisions that correspond to their investment strategy.
