What is IEO, and why has it replaced ICO in the crypto industry

In 2017, against the backdrop of the first major cryptocurrency boom, an analogue of an IPO* for cryptocurrencies emerged — the Initial Coin Offering (ICO). ICO represents the first form of token sale*.

* Initial Public Offering (IPO) — public offering of a company's shares on stock exchanges.

* A token sale is the process of selling tokens to investors to raise funding for a crypto project. Investors buy tokens at an early stage, expecting the value of the asset to grow or to gain access to the service/product of the project. There are different token sale formats — for example, ICO, IEO, IDO, or IGO — that differ in terms of platforms and mechanics.

However, ICOs were free, unregulated token sales that led to massive fraud and scams against investors. According to research from consulting company ICS Statis Group, more than 80% of ICOs conducted in 2017 turned out to be fraudulent.

Since then, token sales have evolved, leading to new formats, one of which became the IEO.

What is IEO, and how does it differ from ICO?

An Initial Exchange Offering (IEO) is the primary offering of tokens on exchanges. While ICOs are conducted on the company's own resources, IEOs are held on specific trading platforms that act as guarantors of obligations between participants and crypto projects. This significantly reduces fraud risks in IEOs, since the exchange controls the token sale process rather than the issuer.

The first IEOs appeared at the end of 2017 on a specially launched platform — Binance Launchpad, designed to issue new tokens for Web3 projects. Binance Launchpad quickly gained popularity among crypto investors, and as of December 2025, more than 70 IEO projects had been launched on this platform.

Other crypto exchanges followed Binance's example and also began launching their own IEO platforms:

ByBit Launchpad,
OKX Jumpstart,
Huobi Prime, and others.

In 2025, IEO projects collectively attracted from $1.2 billion to $1.5 billion in investments. According to statistics, the average return on IEO projects on Binance Launchpad in the first months after launch is around 50%.

Both exchanges and crypto projects benefit from this approach to token sales. In IEOs, crypto exchanges increase trading volume by listing new tokens, thereby increasing their revenue.

Crypto projects, through IEO, gain access to the exchange's large user base and attract its liquidity. In addition, the exchange helps Web-project teams with promotion, although teams incur high listing costs.

Furthermore, due to the wave of fraud in the ICO sector, investors are wary of new Web3 projects. IEO is a way for crypto projects to gain a good reputation, because the exchange team thoroughly checks each project and approves the listing only if it meets the exchange's requirements. The larger the exchange, the higher the due diligence standards, but the better the reputation of the issuer at launch.

Another difference between IEO and ICO lies in the token sale mechanism. ICOs are most often conducted through the project's own platforms in a decentralized manner, using smart contracts, which, without proper auditing, may contain vulnerabilities or deliberately built-in exploits*. In addition, ICO projects do not guarantee that tokens will be listed on exchanges — this may not happen at all. According to ICO Rating research, the failure rate of ICO projects is about 70%.

* An exploit is a vulnerability in a smart contract that allows an attacker to alter its behavior and withdraw funds or gain access to tokens by exploiting an error in the code.

Furthermore, according to statistics, the probability of a token being listed after an IEO is 78%, whereas for ICOs it is only 62%. The share of IEO projects with positive returns, according to the Messari analytics platform, reaches 78% versus 23% for ICOs.

An IEO is a centralized token sale conducted directly on an exchange platform. In case of any failures, the exchange must compensate investors for their losses.

IEO formats

There are two most common forms of participation in IEO:

Launchpool,
Launchpad.

In the first case, in IEO investors do not buy new tokens directly. Instead, they deposit assets approved by the exchange into a special pool and hold them there until the end of the allotted period. In pools, tokens are distributed to liquidity providers in proportion to their contributions. With this approach, each participant receives their share of IEO tokens.

The Launchpad format in IEO involves direct purchase of new tokens before the timer expires, which starts at a specific date and time. Typically, this format works on a "first-come, first-served" basis. As a result, not all investors receive new tokens. To increase the number of successful buyers, exchanges introduce restrictions on the number of tokens available for purchase — allocations.

In both segments, IEOs remain dominated by Binance Launchpad, Bybit Launchpad, and OKX Jumpstart, the most popular IEO platforms among crypto users.

Examples of successful and failed IEOs

One of the most successful IEO projects is Polygon (MATIC), which is now among the leading Layer-2 solutions (L2). After the IEO and exchange listing, the MATIC token (now POL) brought investors more than 36,000% profit. Today, the POL token ranks 52nd on CoinMarketCap, with a market capitalization exceeding $1.3 billion.

Other successful IEO projects include BitTorrent (BTT), which raised more than $7 million in just minutes, and Axie Infinity (AXS), which delivered an investment return of more than 18,000%. Both projects conducted their IEO through Binance Launchpad.

However, even an IEO on a well-known exchange does not guarantee success. For example, the token prices of SportFi (SPOFI) and RingX Platform (RINGX) collapsed to almost zero after listing. Both projects raised $50,000 during their IEO.