The launch of cryptocurrency projects has evolved significantly since the emergence of Bitcoin in 2009. As the crypto ecosystem matures, different methods of funding and distributing new cryptocurrencies and tokens emerge. Let's look at some of the most common types of launches in the world of cryptocurrencies.
Initial Coin Offering (ICO):
The Initial Coin Offering (ICO) was the first launch model used for cryptocurrency projects. In an ICO, development teams issue and sell tokens at an early stage of the project to raise funds. Investors purchase these tokens with established cryptocurrencies, such as Bitcoin or Ethereum, or even fiat money in some cases. The funds raised are used to finance the development of the project, and in return, investors receive tokens that represent a stake in the project.
Process of launching a project through an ICO. Source: WallstreetMojo.
DEX Initial Offering (IDO):
Initial DEX Offering (IDO) is a launch method that takes place on a decentralized exchange (DEX). In an IDO, projects issue and sell their tokens directly on a DEX, allowing for greater decentralization and accessibility. Investors can participate in the purchase of tokens using existing cryptocurrencies or by providing liquidity to the required exchange pair. IDOs have gained popularity due to their more inclusive approach and the ability for retail investors to participate early in the project.
Process of launching a project through an IDO. Source: Cointelegraph.
Initial Exchange Offering (IEO):
The Initial Exchange Offering (IEO) is similar to an ICO, but instead of selling tokens directly to investors, the project collaborates with a cryptocurrency exchange. The exchange acts as an intermediary and carries out the token sale on behalf of the project. Investors can purchase the tokens using the cryptocurrencies accepted by the exchange. IEOs offer greater trust and security for investors as the exchange carries out a verification process and meets legal and regulatory requirements.
Process of launching a project through an IEO.
Source: Clear House Accountants.
Initial Game Offer (IGO):
The Initial Game Offering (IGO) is a type of launch specific to projects related to the video game industry. These projects issue and sell tokens that are used within the game or on online gaming platforms. IGOs allow investors to purchase tokens that can be used to purchase items, unlock special features, or participate in the in-game economy. This launch approach combines elements of the ICO or IEO models and has become popular due to the growth of the blockchain-based gaming industry.
Features of the Binance gaming project launch platform. Source: Cointelegraph.
Initial Farm Offer (IFO):
The Initial Farm Offering (IFO) is a launch model that focuses on projects related to agriculture or generating yield in cryptocurrencies. In an IFO, investors contribute their cryptocurrencies to a “farm” or “pool” and receive tokens in exchange. These tokens represent a share of the profits generated by the farm, either through actual farming activities such as growing crops or raising livestock, or by participating in yield generating mechanisms such as liquidity in DeFi protocols.
Pancakeswap IFO Launch Pad. Source: BSC News.
Initial Loan Offer (ILO):
Initial Loan Offering (ILO) is a type of launch that allows projects to raise funds by issuing and selling tokens representing loans. Investors purchase these tokens and in return receive interest payments based on the revenue generated by the project. ILOs are commonly used in decentralized finance (DeFi) projects where investors can participate in the lending market and earn returns based on the interest generated by lending activities.
Cresio, a project that reserved part of its funding allocation to an ILO. Source: Cryptocurrencies and ICO.