A new Type of ICO
This past week saw the introduction of a new type of ICO to the market. Tarnished by a plethora of scams, and simple incompetence, the ICO market has taken a sharp downturn from its peak. It is important to recognize that this downturn is not the fault of the model itself, but rather the companies which utilize it.
With this in mind, industry leading exchange, Bittrex, surprised the world by announced their aptly named Initial Exchange Offering (IEO).
This announcement is intriguing, because it now attaches the reputation of Bittrex to any IEOs they host. Investors can now expect that any company hosting an IEO has been thoroughly vetted by Bittrex, prior to hosting.
The event itself works in much the same way as an ICO. Participants, however, must be registered users of Bittrex International. As the ICO market continues to slow down, this gives the ‘average joe’ access to intriguing utility tokens. This is an interesting step to see as the market continues to shift towards security token offerings, which are most often restricted to accredited investors only.
Over as quick as it began
Representing one of the very first IEOs, the RAID token offering was canceled this week. While some may view this canceled sale as a hiccup, it proves the validity of hosting events in this manner.
Bittrex was able to confirm, behind the scenes, that a key partnership giving credence to RAID had dissolved. Armed with this knowledge, they felt it best to remove the event from their platform. This type of caution is important when attempting to protect investors.
Upon cancelling the IEO, Bittrex International issued a statement detailing their reasoning behind the move. The following is an excerpt from this released statement:
“We decided to cancel the IEO as a result of significant changes in the business status of RAID. Specifically, a few hours ago, OP.GG terminated its strategic partnership with RAID, which was a vital part of the RAID project. When Bittrex International became aware of this significant event, we did not feel that it was in the best interest of our customers to move forward with the IEO.”
While those interested in RAID were surely disappointed when the IEO was canceled, hours before launch, they can rest easy knowing that there are further opportunities in the pipeline. In addition to opportunities through Bittrex, if successful, it wouldn’t be surprising to see competing exchanges begin hosting IEOs of their own.
It is important to note that IEOs are the result of industry growth. Cryptocurrency enthusiast have gone from relying solely on ICOs, with no investor protection, to being presented with both IEOs and STOs. Both of which offer increasing investor protection.
This growth will allow for companies to appeal to more appropriate markets in their future endeavours, and ease the process of raising funds.
Bittrex International is a branch of U.S. based cryptocurrency exchange ‘Bittrex’. It, however, caters to international markets, hence the name. It was founded in 2019, and is based out of self-dubbed blockchain hub, Malta.