IEO

In an IEO, the exchange itself runs the token sale on a dedicated launchpad, requiring buyers to hold an account and pass identity verification on that platform before they can participate. Because the exchange screens the project, sets the sale terms, and typically lists the token for trading within days of the sale closing, IEOs remove much of the manual risk that plagued the earlier Initial Coin Offering (ICO) era, such as sending funds to the wrong smart contract address.

The model took off in January 2019 when Binance Launchpad hosted the BitTorrent (BTT) sale, which sold out in minutes and pushed dozens of other exchanges, including OKX, Huobi, and KuCoin, to launch competing launchpads that same year. Projects such as Fetch.ai and Matic Network (now Polygon) raised funds this way before listing directly on their host exchange, giving early buyers instant liquidity that ICO investors often lacked.

An IEO still carries real risk. Exchange vetting is not regulatory approval, and a listing does not guarantee a project's long-term viability or price performance after launch. Access is also gated: buyers usually need to complete KYC checks, hold the exchange's native token, or qualify through a lottery allocation system, which limits participation compared with a fully permissionless Initial DEX Offering (IDO) run on a decentralized exchange.

Regulators, including the U.S. SEC, have cautioned that an exchange's involvement does not make an IEO a registered or approved security offering, so buyers should still research the underlying Token Sale terms rather than relying on the platform's reputation alone.