ICO (Initial Coin Offering) - Definition

 

An Initial Coin Offering or ICO for short is a type of cryptocurrency funding mechanism that acts similar to an Initial Public Offering similar to a public company but through a decentralized blockchain. Although a private ICO that does not seek public investment is also conceivable, it is frequently a sort of crowdsourcing. In an ICO, a certain amount of stable cryptocurrencies are offered as “tokens” to investors or traders in return for fiat money or other cryptocurrencies.

If or when the project is successfully launched and the ICO’s financing target is reached, the tokens are marketed as future useful units of currency. ICOs have been used as a means of scams and fraud, and they may violate existing laws or be outright prohibited in some places. From January to June 2018, a record $7 billion was raised via ICOs as the technology has been embraced more and used across different projects in the DeFi space.

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