What is an ICO? The “Crowdfunding 1.0” of the Crypto World
ICO stands for Initial Coin Offering — literally, “first-time token issuance.” Imagine this: a blockchain project wants to build decentralized cloud storage. The team writes a whitepaper explaining the vision, technical roadmap, and future plans, then issues a token to the public — let’s call it “ ABCD”. Investors can purchase these tokens using Bitcoin or Ethereum, and the project gains its initial funding. That’s an ICO. Sounds a bit like an IPO (Initial Public Offering), doesn’t it?
But here’s the difference: IPOs have regulation, audits, and a legal framework; ICOs are almost barrier-free: free issuance without a corporate entity or compliance audits.
The Glory and Frenzy of ICOs
In the 2017 bull market, ICOs became one of the hottest fundraising methods. That year, over 800 projects raised more than $6 billion through ICOs. New coins launched almost daily, and many early participants doubled their money in days. In Ethereum’s 2014 ICO, each ETH cost less than $0.30 — today you know the price. These “myths” made ICOs look like “money-printing machines” in the eyes of many investors.
The Problems Were Also Serious
The openness of ICOs birthed countless innovations — but also let scammers slip in. Many projects had no product and no code; whitepapers were copy-pasted; after raising funds, teams vanished. Statistics in 2018 showed that over 80% of ICO projects ultimately failed or disappeared. Regulators then stepped in. The U.S. SEC, Korea’s FSC, the PBOC in China, and others made clear that ICOs carry illegal fundraising risks. Since then, ICOs have largely exited the mainstream stage.
What is an IEO? The Exchange-Run “Crowdfunding 2.0”
The chaos of ICOs created a need for a “middleman” to build trust — thus IEO (Initial Exchange Offering) emerged.
IEOs are led by exchanges. Simply put:
- •ICO = projects issue tokens themselves;
- •IEO = exchanges help projects issue tokens.
For example, when Project A wants to issue a token, it partners with an exchange. The exchange reviews, screens, and promotes the project, and opens a subscription on its platform. Users buy the tokens directly on the exchange, completing the entire process.
An Example
SuperEx launched Super Start, which helped fuel the IEO boom. Thanks to strict review standards, most projects achieved over 100% of expected completion. In recent years, OKX, Huobi, Gate, and other exchanges have also launched their own Launchpad platforms.
The essence of IEO is — the exchange endorses the project, boosting credibility. Investors no longer wire funds to unknown wallets; they participate on familiar platforms with greater safety and traceability.
Where Do IEOs Have an Edge?
Put simply, IEOs are exchange-led fundraising for token issuance. Users no longer send money directly to project teams, but participate via exchanges. It may sound like just a different “intermediary,” but the difference is huge — it brings a safer, more transparent token issuance mechanism.
1. Much Higher Security
The biggest selling point of IEOs: they’re far safer than ICOs.
In the ICO era, you might only see a slick whitepaper and a website, then send funds to a random wallet address. The result? Teams ran off with funds, websites shut down, Telegram groups dissolved — back to square one overnight.
IEOs work very differently:
- •Exchanges review projects: team background, finances, code security, and compliance, etc.
- •KYC: users must verify identity to participate, preventing money laundering or illegal fundraising.
- •Funds are custodied by the exchange, and the entire process is executed by the exchange’s systems; token distribution is open and transparent.
This means users no longer face the risk of projects “disappearing.” Even if a team is unreliable, the exchange stands as a responsible party — one layer of risk is filtered out.
2. Instant Liquidity
Another reason IEOs are popular: you can trade right after buying.
With ICOs, you often had to wait months — or half a year — before tokens listed on an exchange. Market swings and sentiment shifts could lead to an immediate “break below issue price.”
IEOs solve this pain point directly:
- •After the IEO, the token lists immediately on the exchange.
- •Users can trade right away — sell or hold.
This “issue-and-list” model makes IEOs feel like IPO subscriptions for tokens: low barriers, fast circulation, high price transparency.
More importantly, this model gives projects built-in liquidity and attention. Everyone knows: on listing day, exchange traffic explodes.
3. Brand Endorsement and Exposure Dividends
In crypto, an exchange’s brand is a kind of intangible credit. If a project can run an IEO on a top-tier exchange, it implies it has passed stringent screening. For teams, this is a marketing win in itself: Exchanges help with announcements, PR, and AMAs. Built-in exposure to millions of users. Naturally gains investor trust and heat.
4. Aligned with Compliance Trends
A final key advantage — IEOs are closer to regulatory expectations.
As governments increasingly oversee crypto markets, the “anonymous crowdfunding” model of ICOs struggles to survive. Regulators want controllable issuance channels with a responsible entity — exchanges fit this role:
- •Exchanges must be registered and supervised;
- •They have KYC/AML systems;
- •Project fund flows are traceable;
- •Investor protection mechanisms are more complete.
Thus, many countries (especially in Asia) are cautiously accepting IEOs. Compared to the gray-zone ICO, the IEO has become a safer option within the gray.
Risks and Challenges of IEOs
Of course, IEOs aren’t perfect.
- Review ≠ Guaranteed Profit: Exchanges do screen projects, but standards vary. Some exchanges lower the bar to collect listing fees, leading to uneven IEO quality.
- Volatile Secondary Markets: Even if the token surges on day one, it can plunge just as fast. Many IEO tokens halve in price within days. Investors should beware of FOMO.
- Centralization Risk: Although IEOs fly the flag of “decentralized fundraising,” they still rely on centralized exchanges. A project’s fate often depends on platform decisions — somewhat at odds with blockchain’s trust-minimization ethos.
Beyond IEO: IDO and the Launchpad Ecosystem
It’s worth noting that IEO isn’t the endpoint. With DeFi’s rise, IDO (Initial DEX Offering) emerged.
In an IDO, projects launch liquidity pools on DEXs and complete token issuance there. No centralized exchange, no listing fees — but users must be comfortable with on-chain operations.
From IEO to IDO to today’s Launchpads and Launchpools, one trend is clear — fundraising methods are diversifying, but the core goal remains: connect quality projects with early users.
SuperEx’s IEO Platform: Super Start
As the world’s first crypto exchange built on Web3.0, SuperEx has been committed to building the Web3.0 ecosystem, spanning (but not limited to) finance, commerce, education, and DAOs. The IEO platform Super Start is one of its most popular sections.
Super Start is a dedicated IEO channel for high-value projects, providing faster listing pathways and more early investment opportunities for everyone. SuperEx’s base of tens of millions of users also brings projects massive exposure and attention.
Advantages of Super Start:
1. For projects:
- •A much faster listing channel;
- •More detailed opportunities for information display;
- •Project exposure reaching tens of millions;
- •Above-expectation user investment rates;
2. For users:
- •More early investment opportunities;
- •More intuitive project showcases;
- •More precise project screening.
Conclusion
- •ICOs ushered in an era of freedom in crypto fundraising;
- •IEOs taught the market trust and order.
Their emergence and evolution form one of blockchain’s most important narratives over the past decade: from the “wild west of decentralization” to “innovation with boundaries.”
Today’s Web3 world is moving toward greater compliance, stability, and intelligence. IEO isn’t the destination — it’s a bridge. It takes us from speculation to building, from hype to rationality.
And this is exactly the direction SuperEx has always advocated — to make knowledge inclusive for every participant, and ensure every decision is grounded in understanding.