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J.D. Perry, Baton Rouge Finance Pro, Reviews What to Consider Before Investing in an IEO

Originally published on industriat.com

Initial Exchange Offerings (IEOs) are rapidly becoming the dominant form of fundraising for many entrepreneurs and projects in the cryptocurrency space. Unlike Initial Coin Offerings (ICOs), IEOs will have been verified by the exchanges themselves, helping to build trust and transparency. However, it is still important for investors to do due diligence and thoroughly research IEOs before investing.

 

J.D. Perry of Baton Rouge is a results-driven leader with over 20 years of experience in financial analysis, corporate cash management, asset management, environmental mitigation banking, and real estate. As the tenacious leader of Moss Point Financial, Mr. Perry focuses on minimizing risks and building relationships to drive continuous growth and profitability.

 

Below, J.D. Perry, Baton Rouge finance professional, outlines everything you need to consider before investing in an IEO.

 

What to Consider Before Investing in an IEO

1. Which exchange is running the IEO?

2. Have you read the project's white paper?

3. Have you reviewed the team behind the project?

4. How realistic is the project's roadmap?

5. What are reputable news sources saying?

6. Have you read an IEO review?

7. What is the community saying?

 

What is an Initial Exchange Offering?

An IEO is a fundraising model conducted by a cryptocurrency exchange on behalf of token issuers. The exchange running the IEO is responsible for verifying the project and marketing the tokens to reach out to the right investors. To participate, investors must join the exchange running the IEO.

 

Why invest in an IEO?

For investors, IEOs can be considered less risky than ICOs for the following reasons:

  

Security: Registering with a cryptocurrency exchange and completing the Know Your Customer (KYC) and Anti Money Laundering (AML) checks to offer investors a higher degree of security than with ICOs. Large exchanges provide a range of security precautions such as 2-Factor Authentication (2FA) on accounts, and back-end features such as insurance policies and cold-storage for customer deposits.

 

Lower risk: Investing in an ICO is risky as exchanges may not be guaranteed to list the tokens. IEOs, on the other hand, are guaranteed to be listed on the exchange.

 

Due diligence: To some extent, investors can trust that the exchange running the IEO has scrutinized an IEO project.

 

Although IEOs sound more secure than an ICO, there are still some things to consider before investing.

 

Factors to consider before investing in an IEO

It is one thing to join a cryptocurrency exchange and buy an established cryptocurrency such as Bitcoin or Ethereum, but investing these assets in an IEO raises a complex set of issues. Here, we'll examine the eight main areas you should consider before investing in an IEO.

 

1. Which exchange is running the IEO?

 

When you first hear about an upcoming IEO, it's important to check which exchange is behind it. Do your due diligence about the exchange and make your judgment about its trustworthiness. Check that the exchange is open to citizens from your country and that you can register and complete the KYC and AML verification checks.

 

2. Have you read the project's white paper?

 

It can be tempting to think that since an exchange is running the IEO, there is little need to understand the project or the token. However, you still need a full understanding of the project before participating in an IEO.

 

Key aspects of the white paper that you should study include:

 

•    The abstract

Look at the token's unique selling point; what problem is it aiming to solve or help?

 

•    The consensus mechanism

Find out which consensus algorithm that underpins the token, such as Proof-of-Stake (PoS), Directed Acyclic Graphs (DAGs), Proof-of-Weight (PoWeight). Ensure that you understand the benefits and limitations of the consensus algorithm used by the IEO project you are interested in before you decide to get involved.

 

•    The tokenomics section

A vital part of any white paper is the tokenomics section which outlines the value, utility, and usage of the token being offered in the IEO. You should have a full understanding of this section of the white paper before you invest. Look at the credibility of the claims made; are they substantiated? Are credible experts cited? Which sources are used?

Conduct your research online if you need more help. A reputable IEO project should have a Telegram group, a Reddit sub-forum or a forum where you can get more help and clarification.

 

3. Have you reviewed the team behind the project?

 

A reputable IEO project should have a comprehensive website showing the team members and giving details about their backgrounds. If the website or white paper contains only sparse details, do your research. Can you find team members on LinkedIn or their social media accounts? Find out as much as you can about the team behind the IEO project before getting involved. Look for evidence of previous projects they have worked on and their professional backgrounds.

  

4. How realistic is the project's roadmap?

 

You should be able to find an IEO project's roadmap on their official website or in their white paper. Make your judgment about how realistic this roadmap is. Has the project met its key milestones to date? How likely are they to complete their goals? If in doubt, reach out to members of the community to share ideas and gain insights into this aspect of the project.

 

5. What are reputable news sources saying?

 

Reading news from reputable sources is extremely important as many news articles are paid product placements. Although all companies pay for articles to be written when they are just starting out, these articles should be clearly identified as such. Avoid articles that contain promotional language and look for news sources that contain factual information written in a neutral tone.

 

6. Have you read an IEO review?

 

Reviewing an IEO is a highly complex task, so it's best to read a review from a trusted site such as ICODrops. Many of the best ICO review sites also offer IEO reviews that can help you do the background research necessary to understand an IEO project in depth. Although many IEO reviews are promotional articles, several trusted IEO listing websites have developed reputations for offering independent, impartial advice.

 

Some of the best IEO review websites we recommend are:

 

ICO Bench

ICObench features in-depth reviews and ratings for several IEOs. The site gives each IEO transparent ratings and helps investors learn more about the white paper, team, milestones, and funding behind any IEO project.

 

ICO Champs

ICO Champs lets anyone submit a question to the ICO Champs team, who then help by providing answers and evaluating each IEO against set criteria.

 

ICO Holder

ICO Holder offers a clear rating for popular IEOs and clear information about the team, community, popularity, and more.

It is important to read a selection of IEO reviews to build a broad understanding of an IEO project before you decide to invest.

 

7. What is the community saying?

 

Ultimately, you should only participate in an IEO if you feel confident in the project and fully understand it. Asking the community can help you understand things you may have missed, both positive and negative. Most IEOs should offer community support via their Telegram group or other social media channels.

 

Conclusion

Investing in an IEO is undoubtedly safer than participating in an ICO, but investors should still do due diligence. The areas to consider that we've discussed should offer a sound starting point for making an informed decision.  

 

About J.D. Perry:

Before settling in Baton Rouge, J.D. Perry graduated from Lamar University with a Bachelor’s Degree in Finance and received a Masters of Business Administration from the University of Houston. Notably, he is also the holder of the Certified Trust and Financial Advisor (CTFA) certificate among others.

Initial Exchange Offerings (IEOs) are rapidly becoming the dominant form of fundraising for many entrepreneurs and projects in the cryptocurrency space. Unlike Initial Coin Offerings (ICOs), IEOs will have been verified by the exchanges themselves, helping to build trust and transparency. However, it is still important for investors to do due diligence and thoroughly research IEOs before investing.

J.D. Perry of Baton Rouge is a results-driven leader with over 20 years of experience in financial analysis, corporate cash management, asset management, environmental mitigation banking, and real estate. As the tenacious leader of Moss Point Financial, Mr. Perry focuses on minimizing risks and building relationships to drive continuous growth and profitability.

Below, J.D. Perry, Baton Rouge finance professional, outlines everything you need to consider before investing in an IEO.

What to Consider Before Investing in an IEO

1. Which exchange is running the IEO?

2. Have you read the project's white paper?

3. Have you reviewed the team behind the project?

4. How realistic is the project's roadmap?

5. What are reputable news sources saying?

6. Have you read an IEO review?

7. What is the community saying?

What is an Initial Exchange Offering?

An IEO is a fundraising model conducted by a cryptocurrency exchange on behalf of token issuers. The exchange running the IEO is responsible for verifying the project and marketing the tokens to reach out to the right investors. To participate, investors must join the exchange running the IEO.

Why invest in an IEO?

For investors, IEOs can be considered less risky than ICOs for the following reasons:

Security: Registering with a cryptocurrency exchange and completing the Know Your Customer (KYC) and Anti Money Laundering (AML) checks to offer investors a higher degree of security than with ICOs. Large exchanges provide a range of security precautions such as 2-Factor Authentication (2FA) on accounts, and back-end features such as insurance policies and cold-storage for customer deposits.

Lower risk: Investing in an ICO is risky as exchanges may not be guaranteed to list the tokens. IEOs, on the other hand, are guaranteed to be listed on the exchange.

Due diligence: To some extent, investors can trust that the exchange running the IEO has scrutinized an IEO project.

Although IEOs sound more secure than an ICO, there are still some things to consider before investing.

Factors to consider before investing in an IEO

It is one thing to join a cryptocurrency exchange and buy an established cryptocurrency such as Bitcoin or Ethereum, but investing these assets in an IEO raises a complex set of issues. Here, we'll examine the eight main areas you should consider before investing in an IEO.

1. Which exchange is running the IEO?

When you first hear about an upcoming IEO, it's important to check which exchange is behind it. Do your due diligence about the exchange and make your judgment about its trustworthiness. Check that the exchange is open to citizens from your country and that you can register and complete the KYC and AML verification checks.

2. Have you read the project's white paper?

It can be tempting to think that since an exchange is running the IEO, there is little need to understand the project or the token. However, you still need a full understanding of the project before participating in an IEO.

Key aspects of the white paper that you should study include:

•    The abstract

Look at the token's unique selling point; what problem is it aiming to solve or help?

•    The consensus mechanism

Find out which consensus algorithm that underpins the token, such as Proof-of-Stake (PoS), Directed Acyclic Graphs (DAGs), Proof-of-Weight (PoWeight). Ensure that you understand the benefits and limitations of the consensus algorithm used by the IEO project you are interested in before you decide to get involved.

•    The tokenomics section

A vital part of any white paper is the tokenomics section which outlines the value, utility, and usage of the token being offered in the IEO. You should have a full understanding of this section of the white paper before you invest. Look at the credibility of the claims made; are they substantiated? Are credible experts cited? Which sources are used?

Conduct your research online if you need more help. A reputable IEO project should have a Telegram group, a Reddit sub-forum or a forum where you can get more help and clarification.

3. Have you reviewed the team behind the project?

A reputable IEO project should have a comprehensive website showing the team members and giving details about their backgrounds. If the website or white paper contains only sparse details, do your research. Can you find team members on LinkedIn or their social media accounts? Find out as much as you can about the team behind the IEO project before getting involved. Look for evidence of previous projects they have worked on and their professional backgrounds.

4. How realistic is the project's roadmap?

You should be able to find an IEO project's roadmap on their official website or in their white paper. Make your judgment about how realistic this roadmap is. Has the project met its key milestones to date? How likely are they to complete their goals? If in doubt, reach out to members of the community to share ideas and gain insights into this aspect of the project.

5. What are reputable news sources saying?

Reading news from reputable sources is extremely important as many news articles are paid product placements. Although all companies pay for articles to be written when they are just starting out, these articles should be clearly identified as such. Avoid articles that contain promotional language and look for news sources that contain factual information written in a neutral tone.

6. Have you read an IEO review?

Reviewing an IEO is a highly complex task, so it's best to read a review from a trusted site such as ICODrops. Many of the best ICO review sites also offer IEO reviews that can help you do the background research necessary to understand an IEO project in depth. Although many IEO reviews are promotional articles, several trusted IEO listing websites have developed reputations for offering independent, impartial advice.

Some of the best IEO review websites we recommend are:

ICO Bench

ICObench features in-depth reviews and ratings for several IEOs. The site gives each IEO transparent ratings and helps investors learn more about the white paper, team, milestones, and funding behind any IEO project.

ICO Champs

ICO Champs lets anyone submit a question to the ICO Champs team, who then help by providing answers and evaluating each IEO against set criteria.

ICO Holder

ICO Holder offers a clear rating for popular IEOs and clear information about the team, community, popularity, and more.

It is important to read a selection of IEO reviews to build a broad understanding of an IEO project before you decide to invest.

7. What is the community saying?

Ultimately, you should only participate in an IEO if you feel confident in the project and fully understand it. Asking the community can help you understand things you may have missed, both positive and negative. Most IEOs should offer community support via their Telegram group or other social media channels.

Conclusion

Investing in an IEO is undoubtedly safer than participating in an ICO, but investors should still do due diligence. The areas to consider that we've discussed should offer a sound starting point for making an informed decision.  

About J.D. Perry:

Before settling in Baton Rouge, J.D. Perry graduated from Lamar University with a Bachelor’s Degree in Finance and received a Masters of Business Administration from the University of Houston. Notably, he is also the holder of the Certified Trust and Financial Advisor (CTFA) certificate among others.

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