Initial Coin Offerings (ICOs)

An initial coin offering (ICO) is a mechanism for raising funds for a cryptocurrency-based project by offering digital coins to participants. An ICO is similar to an IPO in traditional financial markets, where stocks are issued to participants. The distributing company has the right to limit the supply and preset the price of the token.

It can also maintain a dynamic supply, and prices may vary depending on the resources received for the project. ICOs are of two types, depending upon the participants: Private ICOs and Public ICOs. ICO is a relatively new mechanism; therefore, it has some regulatory issues associated with it as well.