ICO, IEO and IDO

An ICO, or initial coin offering, is a way for a crypto project to raise money by selling newly created tokens directly to the public, usually in exchange for bitcoin or ether. Ethereum itself raised funds through a token sale in 2014. ICOs boomed in 2017 and early 2018, when projects raised billions of dollars, often with little more than a white paper.

Many ICO projects failed or turned out to be scams, and regulators, especially the US SEC, took the view that many tokens sold in ICOs were unregistered securities. Fundraising then shifted to other formats. In an IEO (initial exchange offering), a centralised exchange runs the sale and lists the token, as with Binance Launchpad. In an IDO (initial DEX offering), tokens launch through a decentralised exchange or launchpad.

Whatever the format, early token sales are among the riskiest investments in crypto. Check the team, token allocation, vesting and whether you are even legally allowed to participate.