Overview
An initial coin offering (ICO) is a crowdfunding method where a project sells tokens before a product is built. It was the dominant fundraising model in crypto's early years. ICOs carry high risk and regulatory scrutiny.
How It Works
A project publishes a whitepaper and sells tokens to investors at a fixed price. Funds are used to build the project. Early buyers hope the tokens appreciate.
Why It Matters
ICOs democratized early-stage funding but were plagued by scams and regulatory issues. They set the template for later funding models like IEOs and airdrops. Their legacy shapes token regulation.
Related Concepts
ICOs relate to Token Sales, Regulation, and Securities. They are an early form of token fundraising.