How Liquidity Determines IEO Success

The success of an initial exchange offering (IEO) is measured based on a set of indicators. To assess a crypto project’s progress, one needs to know the token price, number of community members, completed roadmap stages, and promises fulfilled. However, the essential objective of an endeavour striving to disrupt the market is liquidity. The more cryptocurrency exchanges host a project’s IEO, the higher the chances to let the token gain traction.

Liquidity of the initial exchange offering

More crypto exchanges, better perspectives

Initial exchange offerings are a rapidly growing thing. According to Inwara, IEO-embarked projects sourced 1.63 billion in H1 2019. In the second half, the trend kept on growing, driven by major exchanges that preserve the momentum on their launchpads. For instance, Binance hosts IEOs every week.

On the other hand, investors show higher and higher interest in initial exchange offerings. This is proven by Telegram channels and Bitcointalk topics where people monitor crypto startups founders of which promise IEOs. Moreover, potential investors request those who hadn’t been going to take up an IEO to carry out the procedure. Everyone tries to be the first in the presale or Round 1.

Though an IEO may be beneficial to the project team and investors, there is one nuance that makes this model not that flawless. It’s weak drive to get listed on other exchanges. As a result, most IEOs remain limited to the crypto exchange that hosted the token sale. To this end, practice shows that those few prosperous IEOs demonstrating great token prices and showing off other performance indicators, earned all that because of having deployed on several exchanges.

IEO liquidity rating

BitTorrent holds the liquidity leader ground

Launched last year, BitTorrent is now considered one of the earliest IEOs. Today, the BTT token is ranked the most liquid by number of exchanges (34 as of the date of writing this text) where it’s listed via IEO. BitTorrent outpaced rival tokens: exchange offerings of Matic Network and Super Zero both spawned on 10 platforms. In total, those three top performers are way too greater than their competitors in terms of current ROI and all-time high ROI. The relationship between the number of exchanges and project success is more than obvious.

The one fact is initial exchange offerings turned up the heat in the crypto market this year. The other fact, however, is that most of the token projects are not likely to achieve the same liquidity as BTT, MATIC, and SERO. This said, from 65 IEOs launched since 1 June, over a half couldn’t make it to another platform beside their launchpads. As a result, they faced restricted accessibility, little liquidity, and poor momentum.

In the context of listing on a bundle of cryptocurrency exchanges, the quality still overrules the quantity. And market-leading endeavours became what they are just because they managed to land on right exchanges.