If you’re at all familiar with the cryptocurrency scene, you’ve most likely encountered the “ICO” acronym at some point. It stands for “initial coin offering”, and refers to a fundraising model which involves a project offering digital tokens to backers in exchange for funding. Usually, the tokens are designed to serve a function on a blockchain-based platform or service that is in development. Currently, Ethereum (ETH) is by far the most popular platform for conducting ICOs, but other options such as EOS and NEO are gaining traction as well. Ethereum-based ICOs therefore usually accept funding in the form of ETH, NEO-based projects accept NEO, and so forth.
Key ICO Concepts
Most ICO projects provide a whitepaper in which they provide a detailed description of their plans and the key properties of both the token sale and the planned platform and service itself. There is no universal standard for whitepapers, as some contain highly technical explanations while others focus on broader ideas.
The maximum amount of funds the project is looking to raise. If the funding reaches its hard cap, the ICO is considered complete and will not accept any new backers. This number is usually expressed in USD.
The minimum number of funds the project is looking to raise. If the soft cap is not reached before a selected date, an ICO will usually return the funds to its backers. Sometimes, a project will give its backers the option of either receiving a refund or receiving the ICO tokens as originally planned. This number is usually expressed in USD.
Most ICOs have several stages, with earlier stages giving backers a better deal. Usually, backers can get the best bang for their buck in the pre-sale stage. Bonuses are usually expressed in percentages.
Most projects will not offer all of their tokens in the ICO, but will reserve a portion for the development team, advisors, partners, and so forth. If a project is not transparent about the allocation of its tokens, this can potentially be a red flag.
Some ICOs allocate a portion of their tokens to bounties, which involve users performing tasks such as social media promotion or translation of marketing materials in order to earn tokens. If you have the time and skills to perform bounties, they can be an alternative way to participate in an ICO you’re interested in.
How to track ICOs?
You can track the projects in ICO list, where over 2,000 ICOs are listed.