ICO (Initial Coin Offering)

An ICO (Initial Coin Offering) is a way for a crypto project to raise money by selling its new tokens to the public, usually before the network or product launches. Buyers typically pay in bitcoin, ether or stablecoins and receive the project's tokens.

The ICO boom

ICOs became widespread in 2017–2018, when thousands of projects raised money with little more than a white paper. Many of them never shipped a product, and a large share turned out to be scams.

Risks

• No product yet. You're buying a promise, not a working network.
• Unclear tokenomics. A big share of tokens often goes to the team and early investors.
• Regulation. In many countries regulators treat ICO tokens as securities.

Proof-of-work coins are usually distributed differently: new coins go to miners as block rewards instead of being sold upfront. If a project does sell or reserve coins before launch, check its premining terms and do your own research.

See also

• White Paper
• Tokenomics
• Token
• Premining
• DYOR