<p>In the age of technological advancement, along with the upsurge of non-fungible tokens, many new types of token sales are found which can be grouped in three main forms: ICO, IDO and IEO. Each form of trading tokens provide users with benefits as well as drawbacks. Let’s find out <strong>each type’s features</strong> and <strong>predict their futures</strong> with <a href="https://www.builder.news/" alt="Builder.news" title="Builder.news" target="_blank" rel="nofollow" class=""><u>Builder.news</u></a>.</p><h2><strong>Initial Coin Offering (ICO)</strong></h2><h2></h2><p class="prosemirror-p-center"></p><p class="prosemirror-p-center"><img src="https://cdn.builder.news/news/11ecf06e16c74e86a8e6023f659fee92.jpg" alt="Initial Coin Offering (ICO)" title="Initial Coin Offering (ICO)" width="600" height="400" class="lykafe0"></p><p class="prosemirror-p-center"><br></p><h2><strong>What is ICO?</strong></h2><p dir="ltr">Known as the pioneer of token selling, ICO was first introduced in July 2013 by MasterCoin. Through ICO trading platforms, investors earn particular cryptocurrency in exchange for their monetary investments in the project previously. Generally speaking, it is a means of crowdfunding through the sale of digital currency.&nbsp;</p><h3><strong>How ICO works</strong></h3><p dir="ltr">Issuers can raise tokens on a blockchain of the ICO platform. Investors who meet the conditions to be listed into the whitelist of the exchange will be able to trade tokens. After the executive trade, coins will be sent directly into their crypto wallet. The tokens that investors received allow them to get into accession with certain features of the projects that the issuing company is carrying out. Not only helping open fund sources of software projects but also these tokens deal with traditional financial structures.</p><h3><strong>Popular ICO launchpads</strong></h3><ul><li><p>Equilibrium</p></li><li><p>Radiologex</p></li><li><p>Kubecoin</p></li><li><p>KOLnet</p></li></ul><h3><strong>Advantages of ICO</strong></h3><p dir="ltr">Transparently, ICO brings obvious benefits to users. Anyone from anywhere is able to purchase tokens with an economic liquidity premium. An ICO project could be launched easily in comparison with STO or IEO. Companies only have to provide whitepaper, a website of related products and the team carrying out it. Additionally, the barrier to entry is less, allowing tokens to be sold globally. The buying-in procedure is brief and swift as well. ICO requires a low debut fee, therefore it is suitable with new investors. Moreover, that it is less impacted by the Government allows investors to completely control their money.</p><h3><strong>Disadvantages of ICO</strong></h3><p dir="ltr">On the other hand, it is undeniable that ICO contains quite a lot of potential danger. Its vulnerable security system might well incur human errors, result in third-party’s discrimination. Moreover, ICO-related regulatory mechanisms are not fully available. Besides, projects launched on ICO trading platforms have a low success rate, contrary to the high risk of being scammed.</p><h2><strong>Initial DEX Offering (IDO)</strong></h2><p dir="ltr"></p><p class="prosemirror-p-center"></p><p class="prosemirror-p-center"><img src="https://cdn.builder.news/news/11ecf06e16c755d8a8e6023f659fee92.jpg" alt="Initial DEX Offering (IDO)" title="Initial DEX Offering (IDO)" width="600" height="341" class="lykafe1"></p><p class="prosemirror-p-center"><br></p><h2><strong>What is IDO?</strong></h2><p dir="ltr">Recently, the number of frauds on ICO suddenly increased. For instance, a simple form of con is phishing, in which conners send a suspicious link with an attractive invitation to make a great deal to steal investors’ personal information, then take their tokens on the platforms. That is one of the reasons why ICO is being estranged. Together with the decline of ICO, the world witnessed the acceleration of IDO, a new type of token sale. It is a fundraising method in which the IDO coin is issued via decentralized liquidity exchange. This type of token sales relies on liquidity pools, allowing companies to launch a token and access immediate liquidity. Besides, the average ROI of the projects which started with IDO is pretty high. According to the most recent statistics, Polkastarter, one of the most remarkable IDO platforms, has an average ATH ROI of up to 27,100% in February 2022. Based on the statistics provided by <a href="https://cryptorank.io/ido-platforms-roi" alt="Cryptorank" title="Cryptorank" target="_blank" rel="nofollow" class=""><u>Cryptorank.io</u></a>, none of the IDO platforms has average ATH ROI lower than 1113.00%, which indicates this type of token sales’ stability.&nbsp;</p><h3><strong>How IDO works</strong></h3><p dir="ltr">IDO platforms operate based on decentralized exchanges. When a crypto project lists their tokens on the DEX, users commit their funds through the platform. They have to stake an amount of tokens and wait for the whitelist to be confirmed. The time waiting frequently lasts for a week or a fortnight. In this stage, the staked tokens are locked and cannot be used to participate in any project. Once the user’s name is addressed in the whitelist, they are able to trade tokens in the launch event. Then the final distribution and transfer will be settled by the DEX. The whole process is automated and takes place via smart contracts on the blockchain.</p><h3><strong>Popular IDO launchpads&nbsp;</strong></h3><ul><li><p>BoostX</p></li><li><p>Bounce</p></li><li><p><a href="https://www.koistarter.io/" alt="Koistarter" title="Koistarter" target="_blank" rel="nofollow" class=""><u>Koistarter</u></a></p></li><li><p>PAID Network</p></li></ul><h3><strong>Advantages of IDO</strong></h3><p dir="ltr">IDO owns some distinct advantages that stabilize its place among all types of token sales. First thing worth pointing out, it is unnecessary for users to deal with the project and its smart contract directly. A trustworthy IDO platform would have a certain number of successful completed deals, therefore you could collate to sign in the most effective contract. Secondly, you don’t have to reveal your personal information in order to conduct a transaction: a wallet and funds are all you need. In addition, IDO usually has an anti-whales measure, which means no single investor is able to buy a huge number of tokens.</p><h3><strong>Disadvantages of IDO</strong></h3><p dir="ltr">Despite possessing convenient functions as listed above, IDO still has fatal weaknesses. That customers’ personal information is not vital could be a system loophole for illegal dealers to sneak in. Consequently, lacking of KYC would abet unconstitutional organizations launder money. Besides, participating in a project’s token sales requires users to have a huge number of launchpad tokens to seize a sizable investment and a proper return.</p><h2><strong>Initial Exchange Offering (IEO)</strong></h2><p></p><p class="prosemirror-p-center"></p><p class="prosemirror-p-center"><img src="https://cdn.builder.news/news/11ecf06e16c75b39a8e6023f659fee92.jpg" alt="Initial Exchange Offering (IEO)" title="Initial Exchange Offering (IEO)" width="600" height="338" class="lykafe2"></p><p class="prosemirror-p-center"><br></p><p dir="ltr"></p><p dir="ltr">In recent years, ICO has been replaced by an advanced type of token sales, which is IEO. With IEO, investors can purchase for tokens even before they are listed on the market as long as they have an account on the platform.</p><h3><strong>How IEO works</strong></h3><p dir="ltr">On the launchpad, the digital currency exchanges raise capitals in replacement of the project owners or token issuers. As a response, they earn a listing cost and sometimes an interest of the token sale’s profit. Hence, with IEO, token issuers purchase for their cryptos or tokens on crypto exchange platforms. Besides, IEO’s security and privacy policy is preferred to that of ICO, which promotes IEO’s popularity.</p><h3><strong>Popular IEO launchpads</strong>:</h3><ul><li><p>Binance</p></li><li><p>Gate.io</p></li><li><p>Huobi</p></li><li><p>KuCoin</p></li></ul><h3><strong>Advantages of IEO</strong></h3><p dir="ltr">The first thing must be noticed is all IEO platforms have been verified with KYC and AML, ensuring security for investors. IEO’s security system can effectively protect users from scamming. Unlike ICO or STO, investors could participate in exchanges directly. Besides, instead of using smart contracts, investors purchase with their account.&nbsp;</p><h3><strong>Disadvantages of IEO</strong></h3><p dir="ltr">As the other side of the coin, IEO still has some inconvenient limitations. The biggest adversity is that IEO is not free. For instance, crypto projects which desire to launch tokens on the exchange would have to pay a high listing fee. Furthermore, there is a considerably high probability that the exchange would be manipulated by some whales holding a large number of tokens.</p><h2><strong>The future of token sales</strong></h2><p dir="ltr">Long story short, the future of each type of token sales above might be different from others. ICO is widespread and easy to manipulate; however, the fact that its system lacks security and has a low success rate while the possibility of fraud is high. From our perspective, in the far future, ICO <strong>might no longer be used</strong>.&nbsp;</p><p dir="ltr">On the contrary, IEO is getting more and more widespread since it is secure and easy-to-use. Henceforth, IEO would <strong>be utilized and attract more users</strong>.&nbsp;</p><p dir="ltr">IDO is also potential and being trendy. IDO requires low cost yet offers investors immediate liquidity and transaction. If IDO-related platforms upgrade their control system, the future of this type of token sales would be <strong>brighter</strong>.&nbsp;</p><h2><strong>Key takeaways</strong></h2><p dir="ltr">To summarize, the following table indicates the difference among three types of token sales:</p><p dir="ltr"></p><table><tbody><tr><td data-colwidth="91" style="background-color: [object Object];"><p></p></td><td data-colwidth="314" style="background-color: [object Object];"><p class="prosemirror-p-center">ICO</p></td><td data-colwidth="346" style="background-color: [object Object];"><p class="prosemirror-p-center">IDO</p></td><td data-colwidth="294" style="background-color: [object Object];"><p class="prosemirror-p-center">IEO</p></td></tr><tr><td data-colwidth="91" style="background-color: [object Object];"><p class="prosemirror-p-center">Definition&nbsp;</p></td><td data-colwidth="314" style="background-color: [object Object];"><p>A type of token sales on the market</p></td><td data-colwidth="346" style="background-color: [object Object];"><p>A type of token sales on centralized exchanges</p></td><td data-colwidth="294" style="background-color: [object Object];"><p>A type of token sales on decentralized exchanges</p></td></tr><tr><td data-colwidth="91" style="background-color: [object Object];"><p class="prosemirror-p-center">Description&nbsp;</p></td><td data-colwidth="314" style="background-color: [object Object];"><p>Projects listing tokens on crypto media and community to raise funds by trading tokens</p></td><td data-colwidth="346" style="background-color: [object Object];"><p>Projects listing tokens on centralized exchanges. These platforms are responsible for raising funds as well as assure the projects’ reputation. Besides, a certain percentage of profit would be shared with the exchanges.</p></td><td data-colwidth="294" style="background-color: [object Object];"><p>Projects listing tokens on decentralized exchanges. These platforms would expand and foster their ecosystems while CEXs would provide new projects with their latest technology.</p></td></tr><tr><td data-colwidth="91" style="background-color: [object Object];"><p class="prosemirror-p-center">Regulation</p></td><td data-colwidth="314" style="background-color: [object Object];"><p>Projects develop freely</p></td><td data-colwidth="346" style="background-color: [object Object];"><p>CEXs are authorized to bear responsibilities via smart contracts</p></td><td data-colwidth="294" style="background-color: [object Object];"><p>DEXs and the projects are responsible</p></td></tr></tbody></table><p dir="ltr"><br></p><div class="pr-block-special"><strong>Disclaimer:</strong><br>This article is intended for and only to be used for reference purposes only. No such information provided constitutes advice or a recommendation that any investment or trading strategy is suitable for any specific name.</div><p dir="ltr"></p><p></p><p dir="ltr"><br><br></p>

Token sales appear in several types. You want to have a closer look at them and their prospects? This article is cut out for you!

Types of token sales and their future