The world of cryptocurrencies continues to flourish and attracts a considerable number of interested enthusiasts around the world. Most people are thinking or have already invested in some of them and are constantly following the developments in the crypto market.
However, just as new altcoins and some abbreviations that are still an enigma appear to many every day, so is the case with famous abbreviations such as ICO, IDO, IPO, and the like.
In order to understand ICO, IDO, and IPO once and for all, what they mean, and what their differences are, we have prepared a valuable text for you.
ICO definition and explanation
ICO represents an acronym for the Initial Coin Offering. It represents the specific type of capital-raising activity in the Blockchain and cryptocurrency universe. ICOs, thus, are considered as an entirely new way of fundraising money.
We have two types of Initial Coin Offerings, the private and the public ICO. As the name suggests, when it comes to the Private initial coin offering, it’s an ICO where only a certain number of individuals are able to participate in the process. Usually, those people have accredited investors, such as financial institutions and high-net-worth individuals.
Public ICOs are quite the opposite thing. They refer to the form of crowdfunding that targets the public in general. Therefore anyone can launch their public Initial Coin Offering.
What is an IPO?
On the other hand, we have an IPO. It’s an abbreviation for the Initial Public Offering. An IPO allows companies to raise capital from public investors. In short, Initial Public Offerings represent the process of offering shares of a private corporation to the public in a new stock issuance.
Learn the main difference between ICOs and IPOs
People are always eager to do an ICO vs. IPO comparison in order to understand what they’re about fully. First of all, ICOs are like IPOs, only in the world of cryptocurrencies. However, the main difference between ICO and IPO is that investing in ICO isn’t a guarantee that you’ll get an ownership stake in the company or a crypto project.
ICO participants are always gambling that their preferred currency, which was at that time worthless, will increase in value above its original bought price sometime in the future.
IDO meaning – explained
Besides ICO and IPO, we also have another term, “IDO”, representing an acronym of the Initial DEX Offering. It stands for one of many innovative and creative fundraising methods. IDO is considered a permissionless and decentralized concept that revolutionized the fundraising ecosystem.
In short, once a specific project launches an Initial DEX Offering, it results in the enlistment of tokens/coins exchange on a decentralized liquidity exchange. DEX refers to blockchain-based apps responsible for coordinating large-scale trading of crypto assets between numerous users in the crypto world.
The difference between ICO and IDO, in this case, is quite simple to understand. IDOs, as we’ve just learned, are offerings that happen on a decentralized exchange or DEX. Unlike an Initial Coin Offering, where all tokens are sold before an exchange listing.
In an Initial DEX offering, tokens are listed on the DEX right away, through which they are launched.