Binance has just announced a new token sale on its Launchpad. However, it seems that the exchange just copied and pasted the same announcement for a previous IEO, not even bothering to change the links. Binance has since fixed this error, but it points to a deeper problem.
Initial Exchange Offerings (IEOs) are the “new craze.” With ICOs being associated with scams, IEOs have been a successful cash grab for many exchanges. Just like ICOs, somebody will be left standing and holding bags when the music stops.
Binance has just announced a token token sale for Elrond (ERD). However, in its announcement post, the exchange did not even bother to change its links. Instead, the old template for the Harmony IEO was posted again with many of the links directing to Harmony. Binance quickly fixed the error, but it seems like somebody on the backend had a bout of laziness. This may seem minor, but it points how much of IEOs are just copy-and-paste projects which provide no value to the cryptocurrency space. In the end, we will ultimately view IEOs like we today view ICOs: as largely unabashed cash grabs.
There is already a compliant means of selling tokens for crowdfunding. They’re called security token offerings (STOs) which are intended to be legally sound. However, many exchanges have opted to issue IEOs—essentially ICOs with extra steps. There is nothing more ‘secure’ about IEOs other than having an exchange’s name tacked onto it. If anything, it further cements exchanges as being the sole arbitrators in this cryptocurrency market, to our detriment.
Binance’s new IEO demonstrates this in full. The fact that the Elrond IEO announcement is just a copy-and-paste of the previous Harmony IEO should tell us all we need to know: these IEOs are merely copies of each other, functioning as nothing else than flagrant cash grabs.
It’s understandable, of course. Binance wishes to keep the momentum going to make it seem like it’s promoting fresh new projects and “innovations” in the cryptocurrency space. With its IEOs and giveaway promotions, it should be painfully obvious to everyone that it’s merely greater fool’s theory in practice.
Ultimately, IEOs will fall to the wayside like ICOs did. Years from now, it’ll be associated with the embarrassing ICOs craze — as yet another example of how the cryptocurrency space confuses pump-and-dump crowdfunding with actual innovation.
Do you believe IEOs will end up just like ICOs? Let us know your thoughts below.