Crypto tokens are a major element in the expanding digital assets universe. One of their most important roles is in crowdfunding for blockchain-based projects, as with the Initial Coin Offering (ICO). Other types of token sales have emerged, such as the IEO and the IDO, so today we break it all down for you.
What you'll learn about token sales
- The differences between ICOs, IEOs, and IDOs
- How each type of token sale has a unique set of pros and cons.
- Why Quadency uses an innovative token sale approach for optimal reach and liquidity.
What is a token sale?
A token sale enables a blockchain-based project to issue cryptocurrency tokens to a specified pool of investors or users for crowdfunding purposes during a scheduled sale event. The tokens generally grant access to the particular platform while the sale helps to fund the development of the project’s technology.
Token sales may vary from a private sale or presale, to different public sale offerings, including the ICO, the IEO, and the IDO.
Token sale participants usually pay for the tokens using Ethereum, Bitcoin, Exchange Tokens, or fiat. They expect a lower price than when the token is tradeable on global markets.
Don’t miss out, join the QUAD public sale today!
ICO, IEO & IDO - What’s the difference?
Initial Coin Offerings (ICOs)ICOs opened the world up to digital crowdfunding using cryptocurrencies in 2013. Decentralized ICO token sales became popularized in 2017 during the great ICO Boom. Projects could use Ethereum and other platforms to issue a smart contract-controlled token and hold a token sale privately or publicly from their own website.
- Pros: ICOs democratized the act of investing as anyone globally could participate, often anonymously. Startup projects found it easy to raise capital globally through the ICO.
- Cons: Getting an ICO token listed on cryptocurrency exchanges, ensuring liquidity, and staying within regulations became out of reach for many legitimate projects. Scams became rampant due to a lack of due diligence and the ease of launching an ICO.
Initial Exchange Offerings (IEOs)
IEOs evolved from the ICO revolution to create better security during token sales by involving a partner cryptocurrency exchange as the token “launchpad”. Token sales that are IEOs happen directly on the exchange after due diligence by the exchange.
- Pros: The projects and their tokenomics must pass due diligence. The token has near-instant liquidity on the partner exchange plus access to their user base and marketing engine.
- Cons: The token sale process became more centralized. Participants must have an account on the exchange.
What is an Initial DEX Offering (IDO)?The latest in the digital crowdfunding evolution, the IDO is launched from a decentralized exchange (DEX), which performs due diligence prior to listing a project on its launchpad.
- Pros: The IDO helped to increase liquidity on decentralized exchanges while providing a more decentralized way to crowdfund that is also compatible with DeFi protocols and liquidity pools.
- Cons: Token sales that are Initial DEX Offerings usually do not yet have the scale of IEOs, meaning less funds are generally raised. Additionally, some DEX launchpads may be too technical for the average token sale participant.
How token sales benefit exchanges like Quadency, and their usersICOs popularized crypto-based crowdfunding with many projects raising millions to fund their development. At the same time, listing platforms and exchanges gained more exposure and users. With the emergence of IEOs and IDOs, both the token sale participants and the exchange launchpad can realize different types of benefits:
The exchange can perform due diligence to ensure only good projects are raising funds on its platform. This can be also good for sale participants and platform users.
Centralized and decentralized exchanges alike have investor protections in place that also protect the platform.
With each project and new token comes new growth and marketing opportunities for a CEX or DEX, adding more value to the exchange as well as potential sale participants and the project that is crowdfunding.
The QUAD Token Sale - The Best of All WorldsThe Quadency team has undergone a private sale and a pre-sale, providing access to QUAD tokens to early investors and our users. Now major efforts are underway to build liquidity, raise awareness, and add value for our QUAD token holders:
- Quadency is running its public sale directly from its secure platform.
- Efforts are underway to list QUAD on the most innovative IDO launchpads to bring better visibility of Quadency and QUAD to the DeFi community.
- We're also actively working on listing the QUAD token on top exchanges to expand our reach to the greater crypto world.
Quadency is a cryptocurrency portfolio management platform that aggregates digital asset exchanges into one easy-to-use interface for traders and investors of all skill levels. Users access simplified automated bot strategies and a 360 portfolio view with a free account.
Disclaimer: The content of this article is for general market education and commentary and is not intended to serve as financial, investment, or any other type of advice.