An initial exchange offering (IEO) – or ICO as a service (IaaS) – is a process in which cryptocurrencies (broadly, digital assets: coins and tokens) are offered for sale via a crypto exchange. The exchange issues the coins or tokens  on behalf of the project (actual issuer) in the offering process. The project provides the newly mined assets to the exchange, which assumes the role of collecting funds (e.g., Ether, Bitcoin, fiat money, etc.) from contributors, and in return allots the newly mined coins or tokens to them.

An IEO is an event at which cryptocurrency projects and start-ups list their offerings through an exchange in order to raise capital from contributors. It represents a form of blockchain crowdfunding where a crypto exchange provides blockchain projects and startups with a platform to issue their coins and tokens and raise funds from investors. An IEO provides an additional layers of protection for investors embodied in the verification process that crypto exchanges carry out.

The initial exchange offering (IEO) approach is technically similar to the initial coin offering (ICO) crowdfunding model, with a certain exception: in an IEO, the exchange itself facilitates the sale of issued coins and tokens rather than the project or startup. The exchange vets an issuer before allowing it to list its issue and raise funds on its platform. For that reason, among others, IEOs are considered more reliable than ICOs.  Another advantage of using an IEO to launch digital assets is that the asset will be available for trading relatively within a shorter period of time than an ICO. With an ICO, not all offerings make it to the exchange as eligible for listing. But once an offering is verified for issuance via the IEO, the issue will floated for trading within days.

The support accorded by the exchange to a certain offering helps significantly increase post-launch volume (market interest) and reduces issuance costs. In addition, the IEO platform (exchange) provide security for both the insurer and investors, as it manages all smart contract transactions as part of its overall services.