In 2017, the concept of IEO (Initial Exchange Offering) was born, but it did not receive great attention. After governments from over the world stepped up the regulation of ICOs (Initial Coin Offerings), IEO came to the spotlight again in 2018. In November 2018, Blockchain Governance & Consensus Committee (BGCC) and Korea Blockchain Startup Association (KBSA) released the IEO Guideline, which laid out South Korea’s regulations on technology products, disclosure lists, and financing scale.

Acknowledging the rapid development of IEOs, OKEx faces a dilemma when it comes to listing IEO projects: despite its ability to bring liquidity to the market, IEOs often lack of support and is highly uncertain at the early development stage of blockchain technology; OKEx, on the other hand, as the leading crypto exchange, needs to respond to users’ needs and assist with the project growth.

The crypto space not only needs to attract enthusiastic entrepreneurs and investors, but also a responsible trading platform. “I believe that IEO is only a small chapter in blockchain history. The blockchain sector is set to grow at a fast pace, and we should take an objective attitude towards the shift”, said Jay Hao, CEO of OKEx.

In April 2019, Jay Hao said that “the market is pushing OKEx to make decisions” in his open letter. The market and users both play an important role in IEO development. After careful considerations, we decided to launch an IEO project listing platform, OKEx Jumpstart.

Figure 1: Development timeline of OKEx Jumpstart

Since the launch of OKEx Jumpstart, OKEx is constantly focusing on how to assist potential blockchain start-ups to grow while protecting the interest of our users and the projects. Our goal is to bridge the communication between projects and investors, as well as building a fair, open, and transparent listing platform for projects around the globe.

We focus on maximizing exposure for quality IEO projects through promotions on various social channels. We also strengthen the communications between investors and project teams through our transparent platform and reviewing system.

Yet we noticed that the biggest obstacle OKEx Jumpstart faces is the risks of speculation in the secondary market, instead of user protection, project selection or market transparency.

The current IEO model needs to be changed

For most IEO investors, whether or not to invest in a project does not simply depend on the project’s outlook or values, but the expected profits they could make once the project is listed on the platform — for they know that projects listed on OKEx could generate significant gains.

Notwithstanding the rosy prospect of our growth, investors are keen on securing a share of token offering, instead of the long-term development of crypto project communities. Unfortunately, this is a structural issue that we see at present. The IEO market, therefore, lies in a clear risk of secondary market speculation and is harmful to the community in the long run.

Speculation is definitely bad for IEOs.

In fact, crypto speculators create a knock-on effect on the market. If IEO investors are merely in for short-term profits, these projects would fail to create a sustainable community and IEO financing would lose its meaning.

The revolutionary nature of OKEx IEO

How to develop a sustainable system while the industry is taking off? How can project teams and communities achieve a synergy effect at the development stage? How does the exchange serve as a third-party market platform and a driver of growth for projects and investors? These are the questions we need to address.

Over the last six months, OKEx has transformed OKEx Jumpstart into a powerful listing platform after numerous trial and error. We have implemented six major updates on the rules to curb speculation and frauds, so that investors can focus on project and community development.

Figure 2: The New OKEx Jumpstart Rules

Long-term ecosystem development

Driven by a sense of empowerment and responsibility, OKEx Jumpstart serves as an unflinching third party between investors and project teams to facilitate win-win cooperation. We wish to tackle the current pain points in the industry through implementing updates on OKEx Jumpstart, to foster a better environment for investors.

As a bridge between quality projects and investors, OKEx Jumpstart is set to offer outstanding services to serve the needs of both parties. We wish to empower projects by leveraging OKEx’s influence in the industry, and to further develop use cases and grow with the community.

Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

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