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Crypto Dictionary

ICO

Definition

Initial Coin Offering. A type of funding using cryptocurrencies.

Deep Dive

Initial Coin Offering (ICO) is a fundraising mechanism used by blockchain-based projects to raise capital by selling a new cryptocurrency token to early investors. In an ICO, the project team creates a whitepaper outlining their vision, technology, and business model, and then offers their newly minted tokens in exchange for established cryptocurrencies like Bitcoin or Ethereum, or sometimes fiat currency. These tokens can represent a share in the project, a utility to access its services, or a store of value.

Examples & Use Cases

  • 1Ethereum famously conducted an ICO in 2014, raising funds to develop its foundational smart contract platform.
  • 2Many ICOs in 2017 were criticized for having poorly defined products and unsustainable tokenomics, leading to significant losses for early investors.

Related Terms

Token SaleFundraisingUtility Token

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