The Disappearance of Crypto ICOs: What Happened?
The era of traditional Initial Coin Offerings (ICOs) in the crypto industry seems to have come to an end. But what exactly happened to them? Although ICOs have not completely disappeared, they have undergone significant changes. To understand this, we need to differentiate between ICOs in a strict technical sense and the launch of new tokens.
Understanding Crypto ICOs
From a technical perspective, an ICO refers to the initial offering of new cryptocurrencies on the market. These offerings typically involve tokens rather than standalone cryptocurrencies with their own blockchains. The purpose of an ICO is to raise funds for a project by selling tokens before the project is initiated.
However, the term “ICO” is no longer commonly used due to the association with the collapse of tokens launched during 2019 and 2020. Instead, alternative terms such as pre-sale, IEO (Initial Exchange Offering), and launchpool are used to describe token launches that occur before a crypto project begins.
The Launch of New Tokens
Rather than focusing solely on traditional ICOs, it is more accurate to consider all launches of new tokens that aim to finance a project before its actual implementation. The majority of ICOs involved selling tokens before the crypto project even started working, similar to a pre-seed round for startups. However, many tokens launched today are associated with projects that have already begun.
In recent years, launchpools have become popular for launching new tokens and native cryptocurrencies. Platforms like Binance’s launchpad.binance.com facilitate the launch of numerous crypto projects. These launches serve as forms of financing for established projects and are comparable to IPOs on stock exchanges.
Airdrops and Marketing Techniques
Another method of launching tokens is through airdrops, where tokens are given away as gifts. While airdrops are not technically fundraising methods, they can be used as marketing tools to attract attention to a crypto project. Often, not all tokens are given away, and creators keep some for sale during the launch.
It’s worth noting that many memecoins start with airdrops and resemble traditional ICOs in their approach. However, the number of disguised ICOs has significantly decreased compared to previous years.
The Failure of Crypto ICOs in 2019
ICOs gained popularity during the speculative bubble of 2017, but many tokens launched during this time turned out to be scams or fundraising schemes. Only a few ICOs were successful, such as Binance’s BNB, Ethereum (ETH), Chainlink (LINK), and Cardano (ADA). However, these success stories were rare compared to the overall number of ICOs launched.
The decline of traditional ICOs began in 2018 and continued into 2019, following the market crash. Since then, ICOs have become less common, and alternative forms of fundraising have emerged. These new methods are more solid and rely less on promises outlined in a PDF document.
By
By
By