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Today I am going to discuss about initial exchange offering along with a mathematical example so that it would be more clear for you to understand about topic.
Initial exchange offering is one of the most suitable method if you want to raise your funds and it is a method that is used by the cryptocurrency projects and I want to save one thing about it that we can say that it is something similar to initial coin offering but not exactly the initial coin offering. In initial exchange offering there is a cryptocurrency exchange which act just like a intermediary or middleman in between the project and the investor. Exchange start to conduct due to a reason of diligence at the project and starts to list the tokens for selling purpose at their platform so from that investors feel very easy to purchase tokens directly from their own exchange.
There are different advantages of initial exchange offering and when I talk about one of the most important advantage then it is enhance the level of security and trust as compared to the initial coin offering which is another fund raising project. When tokens are sold through their own exchange then investors feel their self more confident for purchasing the tokens and investors think that project is legitimate. And not only this exchange is also responsible for handling the selling process of tokens so that investors may participate more and more when the feel such kind of ease.
Initial exchange offering is often have a built in user base which is another beneficial and important significant thing for initial exchange offering. The customers that are existing on the exchange are very easy to participate in the selling process of token which can leads to the generation and creation of more interest and liquidity for the project.
I have explained advantages and one of the most significant things about initial exchange offering in my words but we cannot say that this is a project and process in which day is no risk and challenges involved. As I always say that your own research is very important that's why investors need to do their research before investing in any kind of project so that they may remain safe from any manipulation or any kind of loss. Dependence of the success of initial exchange offering is totally depend on the viability and potential of the underlying project as well as the market conditions that what are going on in the market either there is green signal and Ren signal in the market and if there is green signal and definitely it is the indication of positively in the market which can leads to project to be more successful.
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Not only from the to the point of view I will also love to give an example which would be a mathematical example to make my topic more clearer to all of you so here I am presenting myself with the mathematical example in which you can learn more about initial exchange offering.
For understanding a complete example about initial exchange offering you can imagine that there is a project which is Crypto coin let's say. Now this is a project that want to raise funds by the use of initial exchange offering process involvement and the project have pre-planned to sell 1 million of their tokens at a price of $1 each token. Cryptocoin which is an imaginary project who wants to raise funds have decided to partner with an exchange which is Crypto exchange for conducting the initial exchange offering (just suppose this scenerio).
I hope that above explanation is understandable for all of you and now I want to say that if you are feeling that you have interest in investing in Crypto point and you are deciding to participate in initial exchange offering and you decide to buy and purchase 100 tokens let's say;
If you want to calculate the total cost of the investment you have invested in it then it's very easy to calculate it simply by the multiplication of number of tokens you want to buy or purchase by the price of token so I have explained both of the things in above theoretical explanation of the examples so it's very easy to calculate.
100 tokens × $1 = $100
Now you can see that by keeping in mind the above imaginary example the total amount of investment that someone you can say you and me have invested in cryptocoin through initial exchange offering is $100.
As I have already told that it was an imaginary example that was created by me for giving you an understanding of the topic but price of each token number of tokens that are available for selling and other factors may vary from project to project definitely in a real scenario.
That was all about my explanation about initial exchange offering that how it is important in raising the funds in different cryptocurrency projects as well as how and what is its significance and how it is not free from risk totally and then how we can calculate the total invested amount in a particular project due to the implementation of initial exchange offering. I hope that this is a complete understanding of the topic and points whatever I tried my best to convey.
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