ICO (Initial Coin Offering)
In short: An ICO, or initial coin offering, is a first-time token sale in which a new crypto project sells its tokens to the public, usually in exchange for…
An ICO, or initial coin offering, is a first-time token sale in which a new crypto project sells its tokens to the public, usually in exchange for established cryptocurrencies such as ETH or BTC, to fund its development.
Why it matters
ICOs let projects raise money from anyone with a wallet, without banks, venture investors or a stock exchange listing. Buyers usually receive tokens meant to be used in a future product, often with no ownership stake, no claim on profits and little legal protection. Many ICO-era projects never delivered, and some were outright scams. Regulators in several countries have treated certain token sales as securities offerings, and later fundraising often moved to other formats, such as IDOs.
Example
A team publishes a whitepaper describing a planned platform and deploys a token contract. During the sale, buyers send ETH to the sale contract and receive the new tokens at a fixed rate. The tokens may later be listed for trading, but if the platform is never built, they may have little or no use.