What to consider before investing in IEOs?

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What to consider before investing in IEOs?
by APECoin Official June 05, 2020

IEO (Initial Exchange Offering) is a derivative of ICO. It is a fundraising activity that is conducted over a well-known cryptocurrency platforms. The IEO functions as a bridge to the investors.

Few tips to remember before participating in IEO:

You should conduct a due diligence of the project.

You must screen your customer; and of course, understand the marketing & selling processes of tokens. In short, you must review the previous activities in terms of achievement to the people behind the project and the exchange as well. This is a precautionary measure to reduce the risk of losing your funds.

You must delve into the technical aspect of it.

It is imperative to know how robust their software is, how efficient their operations are, and how effective their logistic processes are. On the part of the developer, it is necessary to have a well-defined Whitepaper and even a thoroughly designed website to pave a way for investors to push through their interests. All the significant points must be elaborated to clear their thoughts from any doubts and hesitations.

In some instances, IEO will take their fundraising activity in more than one platform.

It is deliberately required to background check those platforms. In every platform, the requirement varies. In order to join, few of the requirements are signing up & filling up registration, providing government issued IDs. Some platforms may require other documents. This is not a one-hour process, it may take longer than that. Be sure to complete this process before doing the rest.

IEO payment depend.

In IEO, the payments will sometimes depend on the developer based on the digital assets which can be utilized and can be accepted as a currency during the IEO activity. Some IEOs accept the use of BTC & ETH. However, majority of the IEOs will require their own local digital asset for the fundraising activity.

Consider the economic significance.

Looking into the economic significance, the IEO and developer must have a "sound tokenomics." The figures must be laid down with a definite rationale in the eyes of the investors to avoid misconceptions. Moreover, should also consider the sale structure of the token. Be alarmed when the majority sale portion goes to the project developer and the smaller one is yours. This is a big no no!