Initial token offering (ITO) is the concept that investors can access the platform after creating a membership and token holders can benefit from special services within the ecosystem. Initial token offering enables tokenization. With the initial token offering, users can tokenize their assets.

Initial token offering is often confused with initial coin offering. While both concepts are used interchangeably, there is a big difference between them in the cryptocurrency world. Coins have their own blockchain network. Tokens are cryptocurrencies created on an existing blockchain network. Tokens usually work with the ERC-20 standard. For instance, Uniswap is an ERC-20 based token that runs on the Ethereum blockchain network.

What Is Initial Public Offering?

An initial public offering (IPO) is the first sale of shares of a company or organization to the public.

An initial public offering enables any company to raise equity capital with its investors. Initial public offerings are preferred by companies to raise new equity capital to expand, to be acquired by another company or to be taken public by a private company. An IPO is a type of market transaction in which a new financial instrument is sold to investors.

Investors interested in buying a new financial instrument bid to the underwriters who act as intermediaries for the public offering. Underwriters set the offering price of the financial instruments. These financial instruments are allocated to investors. After the IPO is carried out, the shares are traded on platforms and the companies become publicly traded.

What Is the Purpose of Initial Public Offering?

An initial public offering is generally considered a fundraising method used by large companies. An initial public offering is the first time the company's shares are publicly offered for sale and then the shares are traded on the stock exchange. Some of the main motivations for an IPO are to use the funds raised from the sale of shares to increase the company's capital, to provide liquidity for company founders and early investors, and to take advantage of a higher valuation of the company.

What Are the Advantages and Disadvantages of Initial Public Offering?

Initial public offerings have advantages for investors and companies. Some of these advantages are as follows:

• An IPO allows all investors to access investment from the public in order to increase the capitalization of a company. This makes it easier to conclude acquisition deals.
• An IPO increases a company's visibility and brand image, which can help a company's sales and profits.
• An IPO makes it easier for a company to be acquired by another company. Publicly listed companies usually have a higher market capitalization and are considered a more attractive acquisition target because they are easier to finance.

Some disadvantages of initial public offerings are as follows:

• The costs of organizing an IPO are often high.
• In some cases, fluctuations in a company's stock price can be used to assess management performance as opposed to actual financial performance. However, the intensity of stock price fluctuations can distract managers and prevent them from fully assessing actual financial results.

What Is Initial Exchange Offering?

Initial exchange offering (IEO) refers to the platform on which the offering of crypto assets is carried out.

Unlike ICOs, the initial exchange offering is the cryptocurrency platform itself. The initial exchange offering refers to the process by which the sale of cryptocurrencies is realized through platforms. In other words, an initial exchange offering is the sale of cryptocurrencies through a platform, not directly to investors. Developers are not credited with assets directly, but through the platform on which the IEO is conducted. During the initial exchange offering, the platform and the project developers carry out the marketing process together.

What Are the Advantages and Disadvantages of Initial Exchange Offering?

Here are some advantages of the initial exchange offer:

• As an intermediary, the initial exchange offer on the platforms builds investor trust in the platforms.
• Investing in a project through IEOs is easy.
• The IEO is listed directly on the platforms. Therefore, the crypto asset being sold can be listed on the platforms where it is listed.

Some disadvantages of the initial exchange offering are the following:

• The biggest disadvantage of selling through IEO for cryptocurrency projects is the cost.
• In order to sell on a platform, a project must first pay a certain amount of fees to the platform. For this reason, projects that cannot afford it may not be able to apply to platforms to do IEO.

What Are the Differences of IEO and ICO?

There are some key differences between IEOs and ICOs. These differences are as follows:

• IEOs are conducted through platforms. ICOs are carried out directly with the developer team through a website.
• IEOs are carried out in accordance with procedures such as risk management and KYC, which are predetermined by the platforms. The conditions for participation in ICOs vary from project to project.
• The platform where the sale is realized in IEO offers the opportunity to list the project after the sale is realized. After the ICO, projects must access the platforms themselves for token listing.