There are several fundraising methods in the crypto world. Some of the more popular ones are Initial Coin Offering (ICO), Initial Exchange Offering (IEO), and Initial DEX Offering (IDO). All three are similar methods, but ICO’s versus IEO’s versus IDO’s all have their own strengths.
Initial Coin Offering (ICO)
ICOs are a new form of crowdfunding based on cryptocurrencies. To get an idea of what an ICO is, you can think of it as a type of IPO in which buyers purchase coins and not shares in the company. The coins in this case are similar to stocks and can be traded with other coins or converted into currency after they launch.
Initial Exchange Offering (IEO)
The key difference between an Initial Exchange Offering (IEO) and the other offerings is that an IEO is not hosted by the project’s team directly but within a cryptocurrency exchange. Partnering with reputable crypto exchanges can benefit both the project and IEO participants. Those interested in IEOs have relatively high platforms to interact with top projects at their early stages, making them key for investments. The Binance Launchpad is one of the most well-known examples of an IEO platform
Initial Dex Offering (IDO)
With IDOs, tokens are listed on decentralized exchanges almost instantly, thus token liquidity for stakeholders is assured. Unlike IEOs, where teams have to wait weeks or months to be available for trading on centralized exchanges, the funders of an Initial Dex Offering can buy tokens immediately after purchase. The low cost of listing an IDO on a decentralized exchange also appeals to small companies.
IDOs are run by DEXes, but IDO ICOs are not always vetted before being listed on the DEX. This can increase the possibility of scams or lower quality. You should be extra careful with rug pulls as there have been many scam crowdfunding campaigns.
Initial Dex Offering (IGO)
Investing through IGOs requires participants to lock tokens or NFTs for a certain period of time. Depending on the project, these items can be traded outside of the gaming ecosystem on decentralized exchanges and NFT market offers.