All you need to know about ICO, IEO, IDO

The blockchain and cryptocurrency industry aims to tackle the reliance on centralized platforms and financial structures. In the decentralized world of cryptocurrencies, the question is how can businesses fund the introduction of new tokens?
Fortunately, Cryptocurrency market has proven to be innovative when it comes to fundraising. The three most popular means for cryptocurrencies to generate capital are initial coin offerings (ICOs), initial exchange offerings (IEOs), and initial DEX offerings (IDOs).
We will delve into each of these fundraising strategies in detail, highlighting their benefits and drawbacks.


ICO (Initial Coin Offerings)

ICOs were once the go-to method for raising funds, with start-ups only needing to present a white paper outlining their planned system’s operation to attract investors. A token sale would then take place, with the coins serving as potential working units of currency.
Regardless of the fact that they were introduced in 2013, ICOs only gained popularity in 2017, when they reportedly raised a staggering $5.6 billion. However, this strategy’s peak was short-lived, coinciding with Bitcoin’s all-time high. and other factors not limited to fraud, availability of tools, low success rate. The general public lost trust and interest in this strategy quickly. Reports indicate that only 84 projects managed to raise about $350 million in 2022. 


IEO (Initial Exchange Offering)

IEOs, like ICOs, promise investors that their tokens will be listed on the market and that they will not be taken advantage of. However, IEOs have faced intense scrutiny in the crypto industry, and the requirements for projects to participate are higher. This has led to a higher level of trust among dealers and the wider crypto community. In fact, some of the most popular blockchain projects, such as Polygon and Elrond, began. This method as well had it shortcomings ie liquidity issues etc.


IDOs (Initial DeX Offering)

An IDO, combines elements of both an ICO and an IEO, but with a twist: instead of using a centralized exchange (CEX), it utilizes a decentralized exchange (DEX). This allows projects to offer their new crypto tokens to the public through a DEX. Investors can participate by locking funds in a smart contract through a conventional IDO prior to the token’s release.
When the project issues its token, investors receive the new tokens in exchange for their contribution.
IDOs offer projects a speedy and cost-effective way to distribute tokens and raise funds, while providing investors with a higher level of security compared to ICOs. To participate in most IDOs, investors must register by adding their names to a whitelist through a website or social media platform.
Below are the pros and cons of each method used to fundraise for new crypto projects


Its important to keep in mind that the method with which a project uses to fundraise on its own is not sufficient to prove that its worth buying. There are very many factors that go into the success of a crypto project. We will endeavor to keep sharing more educational content to help you out on this journey. 

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