Without question, one of the major reasons for the tremendous interest in Binance-based IEOs is the returns they have brought to investors. However, with the last couple of projects generating minimal ROI, traders are now discussing what it would take for the massive returns to come back.
Initial Exchange Offerings (IEOs) launched on Binance Launchpad created major headlines at the beginning of the year, as most of them brought massive returns for investors.
More recently, however, investors have been left with a sour taste in their mouths as the last few IEOs haven’t had anywhere near the same returns.
Take the Perlin project, for example. Despite the augmented holding period and the reduced number of winning tickets, the IEO generated returns of 5-7x. While this might seem like a lot, especially to those coming from traditional financial markets, when you factor in the decrease of the BNB price during the holding period, the actual returns weren’t that substantial.
As such, traders and other members of the cryptocurrency community are coming up with theories as to when IEOs will return to their former glory. Take Mac, a cryptocurrency trader with a considerable Twitter following:
| Name | Status | Date |
|---|---|---|
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finished | 13/08/20 |
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finished | 21/04/20 |
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finished | 03/02/20 |
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finished | 24/04/19 |
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finished | 19/03/19 |
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finished | 23/10/19 |
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finished | 16/09/19 |
While enjoying nice returns is definitely the purpose of IEO investment for most retail investors, it’s not the core purpose of the idea.
Initial Exchange Offerings were created in order to attract interest in legitimate projects. Investors were meant to spend their money on well-researched projects backed by reputable exchanges. The fact that an exchange as reliable as Binance puts its name behind a project is a serious endorsement, and so far it has worked out pretty well for the projects involved.
However, more and more people have been investing in these projects solely for the returns. Hence, as the returns decrease over time, their interest could fade. This is not only bad for the projects but for the entire field, because it indicates that people are not really interested in actual developments but rather in solutions that could bring them quick and easy returns.
Meanwhile, Binance has announced the winning tickets for its latest IEO, the Band Protocol. The trading of BAND tokens begins tomorrow, and it will be interesting to see how things unfold this time.