You’re probably familiar with Initial Public Offerings or IPO’s, but since we’re in the crypto world let’s explore Initial Coin Offering or ICO’s.
ICO’s are the offering of tokens attached to a blockchain project for the sake of raising capital for the venture. These tokens can be redeemed by the holder in the future for products, services or even equity offered by the issuing company.
Many view ICO projects as unregulated securities that allow founders to raise an unjustified amount of capital, while others argue it is an innovation in the traditional venture-funding model.
Since 2013 ICO’s have often been used to fund the development of new cryptocurrencies. The pre-created token can then be sold and traded on cryptocurrency exchanges, like CoinSmart, if there is demand for them.
With the success of Ethereum’s ICO, more and more crypto projects used this method to fund their development. ICO has become a tool that could revolutionize not just currency but the whole financial system. Some crypto enthusiasts believe ICO tokens could become the securities and shares of tomorrow.
Some examples for successful Initial Coin Offering on Ethereum are:
- Singular DTV
- First Blood
- Digix DAO.
For more in-depth information about ICO’s use the buttons on the left to read Savvy and Genius level articles!