Initial Coin Offering (ICO)

An initial coin offering (ICO) is a way for a crypto project to raise money by selling a newly created token to early supporters, often before the product is finished.

How it works

The project publishes a plan — historically a “white paper” — and offers tokens for sale, usually in exchange for an established cryptocurrency. Buyers receive the new tokens in the hope the project succeeds and demand grows. ICOs are loosely analogous to a crowdfunding round, but backers receive tokens rather than equity.

Why it matters

ICOs enabled fast, global fundraising and funded many projects, but the model also attracted heavy speculation and outright fraud, since tokens could be sold with little built and little accountability. That history prompted greater regulatory scrutiny and the rise of more structured token-sale models.

Example

A new protocol might sell a portion of its tokens in an ICO to fund development before launch.