In the crypto market, fundraising methods have been constantly evolving. From early ICOs to the now popular IEOs, this shift reflects the industry's transition from wild growth to regulation. For investors, understanding these different fundraising models is crucial.
From disorder to order: a comparison of three fundraising models
Initial Coin Offering (ICO) was once the most popular fundraising method for crypto projects. Project teams directly sell tokens to investors, with a simple process and low barriers. However, this very feature of having no barriers led to the emergence of many fraudulent projects. After 2017, with regulatory authorities around the world stepping in—China and South Korea banned ICOs in September 2017, the Vietnam Securities Commission subsequently declared ICOs illegal in October, the Reserve Bank of India issued a ban in April 2018, and Bolivia followed suit in July of the same year—ICOs' credibility was completely shattered.