ICO (Initial Coin Offering)
A fundraising method where a cryptocurrency project sells newly created tokens to early investors before the token is publicly tradable. ICOs were extremely popular in 2017-2018 but attracted significant regulatory scrutiny due to widespread scams and securities law violations. Many jurisdictions now require ICOs to comply with securities regulations.
“Ethereum raised approximately $18 million in its 2014 ICO, selling ETH at about $0.31 per token. While ETH became enormously successful, the vast majority of 2017 ICO tokens went to zero.”
STO (Security Token Offering)
A regulated fundraising method where blockchain tokens represent ownership in an underlying asset — such as equity, debt, real estate, or revenue shares — and comply with securities laws. STOs offer more investor protection than ICOs through regulatory compliance, including investor accreditation requirements, prospectus filings, and transfer restrictions.
Token
A digital asset created on an existing blockchain rather than its own native chain. Tokens can represent a wide range of assets and utilities — from currency and governance rights to real-world assets and collectibles. Unlike coins (BTC, ETH) which are native to their blockchain, tokens are created using smart contracts on platforms like Ethereum (ERC-20, ERC-721).
Crypto Fundraising
The various methods by which blockchain projects raise capital to fund development. These include Initial Coin Offerings (ICOs), Security Token Offerings (STOs), Initial DEX Offerings (IDOs), venture capital rounds, community token sales, launchpad platforms, and retroactive public goods funding. Fundraising methods have evolved significantly in response to regulatory pressure, with greater emphasis on compliance and fair launch principles.
Tokenomics
The economic model and design of a cryptocurrency token, encompassing its supply schedule, distribution plan, utility within the ecosystem, value accrual mechanisms, inflation/deflation dynamics, and incentive structures. Well-designed tokenomics align incentives between all stakeholders and sustain long-term value. Poorly designed tokenomics can lead to unsustainable inflation or wealth concentration.