5 Initial Exchange Offering Platforms: Overview, Comparison – COIN360
SUMMARY
June 27  |  15 min read

5 Major IEO Platforms: a Comparison

The COIN360 Editorial Team

Initial Exchange Offerings, or IEOs, are the token crowdsale system that has de facto replaced ICOs in 2019. How do they differ from each other? How much money have the top IEOs raised? What’s the ROI for IEO-launched tokens? We answer these questions and more in our review of the top 5 IEO platforms and their tokens.

Binance Launchpad

Binance Launchpad Initial Exchange Offerings

Binance is one of the biggest cryptocurrency exchanges in the world, and its CEO, Changpeng Zhao (CZ), is one of the most recognizable characters in crypto. In December 2017, the team became pioneers by launching the first ever IEO platform — Binance Launchpad. However, after two sales the platform stopped listing new projects until the February of 2019. According to a recent blog post, ever since the reintroduction of the platform in 2019, Binance Launchpad has helped projects raise roughly $27M in total, with an average ROI of 513.56% for their tokens.

The first Binance Launchpad sales, for BitTorrent and Fetch.AI, were some of the first instances of IEO sales that were deemed highly successful.

How Does the Offering Process Work?

Binance Launchpad has had two modalities. The first was a first-come-first-served system. The last launch to use this system was Celer, in March 2019. Basically, users who complied with the exchange's normal KYC AML requirements and with an established minimum amount that backers must purchase could take part.

The second and current modality, a lottery, was used for the last two crowdsales, Matic and Harmony. It has just been confirmed for a third: Elrond.

Under this new modality, traders who wish to take part in the sale are able to claim up to a maximum of 5 lottery tickets based on the minimum amount of BNB that they hold during a certain period of time prior to the lottery draw date. This was later modified to count the average amount of BNB held during that period.

24 hours before the lottery date, traders will be able to select how many lottery tickets they wish to claim. Once this period elapses, lottery tickets are randomly selected based on the tail digits of the tickets until the amount of maximum potential winning tickets is reached. If a user claims a winning ticket, the corresponding amount of BNB will be automatically deducted from their holdings.

At first, 100 BNB was the minimum amount that had to be held in order to claim a lottery ticket, but this was later lowered to 50 BNB.

Lottery Controversy

The Launchpad's new lottery system has been criticized for its lack of transparency and for the unnecessarily great risk it undertakes. Because the price of BNB can fluctuate so much over time, it's possible that even users who draw a winning ticket could lose money in the end.

Additionally, the community reaction to the announcement of the format change was mostly negative due to the fact that the new format heavily favors whales and big-time investors to the detriment of regular traders and users of the exchange. Members of the community claimed that the initial amount of BNB that was needed to be part of the sale was already higher than what most Binance users held. In a similar vein, users on Twitter questioned the move because whales could just create multiple accounts to circumvent limitations and claim more tickets. Others have stated that the party that benefits the most is Binance itself, as forcing people to hold BNB tokens has only driven its price up.

In response to the situation, CZ took to Twitter to address the negative feedback. He warned against reducing the amount of BNB required to claim tickets as it would reduce the chances of drawing a winning ticket. He also downplayed the possibility of whales having multiple accounts and abusing the system by saying that strong KYC measures were already in place.

Binance CEO Changpeng Zhao addressess negative feedback about the new lottery format

Binance’s CZ starts off a thread addressing some of the negative feedback to the format change and clarifies that the new format is not decisive yet.

Despite warning traders against it, the minimum amount of BNB required was lowered to 50. However, the issue still remains. The price of BNB opened at $15.24 on the day of the announcement of the lottery format—which theoretically meant that people had to hold $1,524 in BNB tokens in order to be able to claim a lottery ticket. Since then, the price of BNB has rocketed, and one BNB token is worth, at press time, $33.43. This means that even though the minimum amount was lowered, people who wish to take part in the sales need to have more than $1,800 worth of BNB tokens in their accounts.

Recent Token Sales

Celer Network (CELR)

  • Mar. 19 2019.
  • Total token allocation: 597,014,925 CELR.
  • Public sale price: $0.0067.
  • Current price: $0.015837.
  • ROI: 136.37%.

Matic Network (MATIC)

  • Apr. 24, 2019 (ticket claim date).
  • Total token allocation: 1,900,000,000 MATIC.
  • Public sale price: $0.00263.
  • Current price: $0.019899.
  • ROI: 656.62%.

Harmony (ONE)

  • May 27, 2019 (ticket claim).
  • Total token allocation: 1,575,000,000 ONE.
  • Public sale price: $0.003175.
  • Current price: $0.019830.
  • ROI: 524.567%.

Huobi Prime

Huobi Global Initial Exchange Offerings

As a reaction to Binance's Launchpad, Huobi Global created their own IEO platform: Huobi Prime. Not only does this platform enable backers to purchase tokens in exchange for Huobi's native HT; it ups the ante by making tokens instantly tradeable on Huobi Global. It was announced in a Mar. 20, 2019 blog post, which described it as a “Direct Premium Offering” platform.

Counting the short-lived Huobi Lite platform, Huobi Global has held four IEOs, all of which have been successful.

How Does the Offering Process Work?

At the beginning, token sales conducted via Huobi Prime were held through a three-round offering process on a first-come-first-serve basis, with token prices increasing with each round. With the announcement of subsequent sales, some variations to the format were made. The last Huobi Prime sale, for Reserve Rights (RSR) tokens, only consisted of two rounds, the first one being completed on a first-come-first-serve basis, and the second one being completed through system matching.

In terms of eligibility, Huobi Prime initially set a minimum daily average of 500 HT during the 30 days prior to the sale as a participation requisite. This was changed in their last sale, which modified their eligibility criterion to consider only traders who held at least 1,000 HT over the 7-day period that preceded the sale, citing an “overwhelming demand” and low success rates in previous sales as the reasons behind the change. This change further alienated small-time investors as, at press time, $3,710 in HT holdings are needed to participate in sales that have 1,000 HT as the threshold for participation.

A modification for spending limits was also introduced to the system. At the beginning, accounts were limited to spending $1,000 in HT over the three rounds of token offerings. With the announcement of their second token sale, they introduced the idea of a tiered individual cap based on the lowest amount of HT held during the preparation period, which would change from sale to sale. For their last project, their first tier (for people who held at least 1,000 to 2,000 HT daily) was capped at $400, whereas their fifth and final tier (for people who held at least 5,000 daily) was capped at $2,000.

Huobi Lite

An additional platform, dubbed Huobi Lite, was initially announced in May of 2019. It was considered a streamlined and “ultra fast” version of Huobi Prime, whose objective was to offer smaller projects to a wider audience of traders on a weekly basis. It featured shorter listing cycles and more overall flexibility. Only one Huobi Lite sale was conducted, for ThunderCore (TT). It was conducted in only one 30-minute round that resulted in the selling of 33 million tokens.

After its first sale, however, Huobi Lite was rebranded into Huobi FastTrack, a platform where users can vote with their HT to decide which project gets listed on Huobi next. Ross Zhang, Huobi Gobal’s Head of Marketing, was quoted as saying that Huobi Lite had resulted in confusion and “too few coins being distributed (to) too many users”.

Controversy

Huobi Prime’s first IEO, for the TOP Network token, was highly successful. However, the sale was highly controversial due to the fact that many users experienced problems during the sale. One of the reported problems was that the HT balance of multiple users got momentarily reverted to 0, leaving them out of the IEO, despite holding the required amount of HT. Much like the case of Binance Launchpad, the community claimed that this sale heavily favored whales and bots, since it was virtually impossible for most users to purchase TOP tokens. Further sales introduced modifications to their individual spending caps and token offering rounds to avoid this from happening again.

Huobi community members express disgust over Huobi Prime IEO sale

Users who tried to be part of the IEO reported that their HT balance reverted back to 0 momentarily, making it impossible for them to be part of the sale.

Recent Token Sales

Project Newton (NEW)

  • Apr. 16, 2019.
  • Total token allocation: 2,000,000 NEW.
  • Public sale price: Three separate coin offering rounds with each token valued at $0.001667, $0.002000, and $0.002400, respectively.
  • Current price: $0.002847.
  • ROI: 70.79%, 42.36%, and 18.63% for each round.

ThunderCore (TT; conducted via Huobi Lite)

  • May 9, 2019.
  • Total token allocation: 33,333,333 TT.
  • Public sale price: $0.015.
  • Current price: $0.014407.
  • ROI: -3.953%.

Reserve Protocol (RSR)

  • May 22, 2019.
  • Total token allocation: 2,000,000 RSR.
  • Public sale price: two separate coin offering rounds with each token valued at $0.000598 and $0.0010998, respectively.
  • Current price: $0.002804
  • ROI: 368.90% and 154.96% for each round.

Probit Launchpad Premium

Probit Launchpad Premium Initial Exchange Offering

Unlike Binance and Huobi, Probit is not exactly known for being one of the top cryptocurrency exchanges—at press time it is ranked 68th among all crypto exchanges. Nevertheless, they have built a reputation for their IEO support. Shortly after Binance reintroduced its Launchpad, Probit followed suit and held a successful IEO for Spin Protocol (SPIN) on Feb. 11, 2019. Since then, ProBit has served as an IEO platform for more than 40 projects. In fact, one of their latest IEOs, for the Boltt Coin token, sold out in less than a second.

Other recently completed campaigns include projects such as TranslateMe Network, Origin, Spin, and Azultec.

Probit IEO sale of the Origin token

ProBit’s Origin token sale live on their website.

The Launchpad Premium IEO platform was announced on June 11 with the IEO for SportX (SOX), a decentralized sports ecosystem platform, as the selected project. The main difference between regular Probit IEOs and Launchpad Premium IEOs is that the latter are listed on the exchange on the same day as the IEO takes place, providing rapid liquidity to people who take part of the sale, much like Huobi Prime IEOs.

How Does the Offering Process Work?

IEOs in Probit work in a straightforward manner. Users top up their wallets with the cryptocurrency they want to use to purchase tokens, and then they conduct the trade on the IEO listing page, indicating how many coins they want to exchange. Each IEO has different minimum/maximum limits for purchasing tokens. Typically, five different cryptocurrencies are supported as payment methods: BTC, USDT, ETH, XRP, and PROB, the exchange’s proprietary token. Using PROB for IEO sales is beneficial for traders, as Probit typically offers an additional discount for token purchases conducted in PROB. Additional trading fee discounts will also apply for users who wish to use PROB in the sales, though the added discount rate will depend on how much PROB they are holding (from 10% for users who hold 0 PROB in their accounts, to 50% for users who hold more than 50,000 PROB).

Probit also allows for IEOs to have multiple sales rounds, with some projects having five different rounds to sell tokens at press time.

The SOX Launchpad Premium sale worked in a similar fashion to other Probit IEOs, with the main difference being that only BTC was supported as a payment method. The maximum amount of SOX that could be bought was 125,000 SOX for each of the two days of the IEO (about 0.139 BTC; $1,580 at press time), with no prerequisites to partake in the IEO other than purchasing more than 10,000 SOX (0.011125 BTC; $127.76 at press time). Since no further Launchpad Premium IEOs have been announced, it is unclear at press time if they will also be BTC-only or if they will include additional payment options.

Recent Token Sales

SportX (SOX)

  • June 16, 2019.
  • Total token allocation: 5,000,000 SOX.
  • Public sale price: $0.01.
  • Current Price: $0.02453447.
  • ROI: 145.35%.

Coineal Launchpad

Coineal Initial Exchange Offering platform

Coineal is one of Asia’s biggest crypto exchanges, typically ranked among the top 10 exchanges by adjusted volume. Much like the other platforms, Coineal started their Launchpad sales shortly after Binance. To date, 17 projects have held their IEOs on Coineal, with roughly 75% of them reaching their funding goal. Coineal held its first IEO on Mar. 28, 2019, when it held the IEO for the InterPlanetary Web project.

Projects that have finished their IEOs will also have their tokens listed on Coineal, although trading will be made available at a later date. In the case of the InterPlanetary Web project, the token was listed on the exchange on Apr. 10.

Some of the projects that have conducted their IEOs on Coineal and reached their goal include RedFOX Labs, Izichain, and Digipharm.

How Does the Offering Process Work?

Coineal works in a similar way to Probit: users only need to go to the IEO sale page and input how many tokens they will be buying. However, Coineal works with the concept of “orders”, which puts limitations to the buying process and forces buyers to use a specific cryptocurrency. For example, one order in the RedFOX IEO meant that 50 USDT could be used to purchase 1,000 RFOX tokens. Users could add multiple orders to purchase more tokens, but orders could only be purchased in integers.

Some Coineal IEOs have additional bonuses, such as gift and referral bonus. Additionally, there are IEOs that are exclusive. Users can only participate in said offerings if they have an invitation code.

Recent Token Sales

There have been multiple sales that are more recent than the ones listed below, but these tokens have yet to be listed on Coineal or any other exchanges, which makes it impossible to calculate their ROI.

RedFOX Labs (RFOX)

  • Apr. 17, 2019.
  • Total token allocation: 35,000,000 RFOX
  • Public sale price: $0.05 (through orders where 50 USDT bought 1000 RFOX).
  • Current price: $0.028629,
  • ROI: -42.742%.

Blockbuster (BBX)

  • Apr. 22, 2019.
  • Total token allocation: 30,000,000,000 BBX (only 21,580,048,000 BBX were sold)
  • Public sale price: 0.00000064 ETH (at the time, $0.0001088128; through orders where 0.0064 ETH bought 10000 BBX).
  • Current price: $0.00001213.
  • ROI: -88.852%.

IZIChain (IZI)

  • Jun. 6, 2019.
  • Total token allocation: 32,750,000 VC.
  • Public sale price: $0.1 (through orders where 50 USDT purchased 500 IZI).
  • Current Price: $0,096693.
  • ROI: -3.30%.

Coinbene MoonBase

Coinbene MoonBase Initial Exchange Offering platform

This Singapore-based exchange opened its doors in 2017, and is one of the biggest players in the South Asian market. Coinbene also started their own IEO platform in 2019, calling it “Coinbene MoonBase”. It was first announced via Twitter on Apr. 11.

To this day, there are records of three IEOs conducted via Coinbene MoonBase: A.I. Prediction Ecosystem (AIPE), Custody token (CUST), and CryptoMillions (CPMS). All IEOs have sold out in less than a minute thus far.

Announcement of AIPE presale finishing on Coinbene MoonBase

Coinbene tweets about the AIPE presale selling out.

How Does the Offering Process Work?

The IEO sale structure of Coinbene MoonBase is similar to that initially used by Huobi Prime. MoonBase IEOs are conducted through three presale rounds that have different durations. Once again, prices start at their lowest the first round, and then increase with each successive round.

The original announcement for the MoonBase platform indicated that only people who held CONI (Coinbene token) could take part in the presale, but subsequent reports only indicate a reward program for CONI holders. The second and third MoonBase IEO make no reference to CONI tokens at all.

A purchasing limit of 500 USDT for all three rounds was applicable to all accounts for the first sale, with the second and third IEOs reducing the limit to 200 USDT. MoonBase IEOs are limited only to people who have previously passed Coinbene’s KYC.

Recent Token Sales

To this day, only the first Coinbene MoonBase IEO has had the token listed on exchanges.

A.I. Prediction Ecosystem (AIPE)

  • Apr. 27, 2019.
  • Total token allocation: 1,200,000,000 AIPE.
  • Public Sale Price: Three separate coin offering rounds with tokens valued at $0.01, $0.012, and $0.015, respectively.
  • Current Price: $0.01068013.
  • ROI: 6.8%, -10.99%, and -28.79% for each round.

Custody Token (CUST)

  • Jun. 5, 2019.
  • Total token allocation: 100,000,000 CUST.
  • Public Sale Price: Three separate coin offering rounds with tokens valued at $0.006, $0.008, and $0.0012, respectively.
  • Current Price: Token has not been listed on any exchanges yet.
  • ROI: --

CryptoMillions (CPMS)

  • Jun. 19, 2019.
  • Total token allocation: 12,000,000.
  • Public Sale Price: Three separate coin offering rounds with tokens valued at $0.5, $0.7, and $0.9, respectively.
  • Current Price: Token has not been listed on any exchanges yet.
  • ROI: --

Final Thoughts

In general, all IEO platforms are highly successful services through which startups can raise significant funding. The demand for the tokens in IEOs is usually much higher than the supply. This is why it is not a rare occurrence to see an IEO reach its hard cap in a matter of seconds, and why only some projects have failed to reach their goal. If this dissonance between supply and demand didn’t exist, there would probably be no lottery formats nor very short sale periods.

The way in which more famous exchanges have dealt with this issue have led to an unfortunate commonality: platforms end up favoring big investors over everyday traders. The first of such cases occurred when Binance, the pioneer of the modern launchpad platform, changed to a lottery format and left the majority of its users out of it because of the high requirements. Huobi Global was quick to follow in Binance’s footsteps and promptly held its first sale, where a big part of the community could not be part of the sale either because their HT holdings reverted back to 0 momentarily, or because the hard cap of the sale was reached in an instant, which led to the belief that bots bought everything before human traders could complete the transaction. Maybe unsurprisingly, this is something proper to the pioneers and perhaps most established launchpad platforms, as newer or lesser known platforms are not usually known for these types of controversies. After all, projects hosted on more famous exchanges have the best chance at having a sought-after token, which makes it more enticing and profitable for whales and bots. Lesser known platforms, on the other hand, might be more welcoming to regular traders who wish to take part in an IEO, but the projects might not have as much potential, and there are fewer probabilities of it having a high ROI.

Thanks for reading,
The COIN360 Editorial Team