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ICO, IEO and STO.

Cryptocurrency capital raising.



ICO is the 'acronym used for "Initial Coin Offering" and is a financing method used by companies to obtain the resources needed to develop their projects.

This mechanism was the first and main method of fundraising in the cryptomonetary space for companies operating in the sector.

The main advantage of an ICO is its flexibility. In fact, thanks to the blockchain system, it is possible to receive capital from investors without the need to go through complicated financial processes. A successful ICO is directly reflected in the demand for the token and consequently its price. This is why a startup planning to launch an Initial Coin Offering puts a lot of effort into the marketing campaign of an ICO.


An IEO, on the other hand, is a closed fundraising tool and is therefore not open to all investors. IEO stands for "Initial Exchange Offering" and is a procedure adopted by an Exchange to raise capital on behalf of a specific company. To carry out an IEO, a company, must meet certain requirements specifically requested by the exchange. The launch of a token is not free as in ICOs but subject to the decision of the issuer. For this reason, the risk of investing in an IEO is lower than in an ICO.

Finally, it should be added that if a startup after an ICO wants to list its token on exchange platforms, it must meet certain requirements demanded by the various exchanges.

In contrast, in an IEO the team automatically gets the support of the Exchange to list the token after crowdsale.

Nowadays, many major exchanges have their own IEO platform. For example, Binance has Binance Launchpad, Bittrex has Bittrex International IEO, Bitmax has Bitmax Launchpad, OKEx has OKEx IEO, and Huobi has Huobi Prime.


An STO, on the other hand, is a capital-raising tool much closer to traditional finance than the previous two proposed initial offerings.

STO stands for Security Token Offering and is in effect a participatory financial instrument. Through an STO, the company intends to raise capital by issuing cryptocurrencies through the use of a blockchain platform.

In this case, the token offered to the public is a true representative instrument of an asset class such as a stock, bond, or derivative security.

Thus, STOs are subject to the regulations regarding the issuance of financial instruments and subject to authoritative control.

The token guarantees the authenticity and ownership of the security entered into the smart contract through the use of DLT(distributed ledger technology).

This enables the company to raise venture capital without having to resort to the banking system but still offering both its investors a degree of security.

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