IEOs are conducted on cryptocurrency exchange platforms. In an IEO, a project partners with a cryptocurrency exchange to facilitate the token sale, and the exchange acts as a trusted intermediary that conducts due diligence on the project before hosting the sale. This due diligence process enhances investor trust and potentially reduces the likelihood of fraudulent or high-risk projects. IEOs typically involve utility tokens, which have specific use cases within the project's ecosystem. Additionally, tokens issued in an IEO are often listed on the hosting exchange immediately after the sale, providing investors with liquidity.

In summary, the key differences lie in the platform (exchange for IEOs), token type (utility tokens for IEOs, security tokens for STOs), and the emphasis on regulatory compliance and investor protection (strictly adhered to in STOs). These distinctions make each fundraising method suitable for different scenarios, projects, and risk profiles.