The ICO fever in 2017 proved to be a very high-risk environment for individuals wanting to participate in new blockchain project token releases, from accidentally sending funds to the wrong wallet, or some project teams absconding with funds.
For a user, an IEO is easy to participate in as they don’t need to manage on-chain transactions with different wallets on different blockchains. Instead, a user only needs an account on the exchange and some funds in their account and can participate completely through the trusted website’s interface. Additionally, the exchange is staking its reputation behind the projects on its platform, offering a higher degree of trust behind the project.
For a project looking to raise funds, an IEO offers the promise of an immediate userbase that can see their product, and depending on the size of the exchange’s audience, could mean that the project can reduce their outside marketing funnels for fundraising, allowing them to focus only on the development of their product.