ICO / STO / IEO

Do you want to know more about ICO, STO and IEO?

ICO

1. What is an ICO?

ICO stands for Initial Coin Offering and is one of the most popular methods of raising external funding in the cryptocurrency world.

An ICO is typically used to launch a new service or product, such as a new cryptocurrency token or app. In fact, it is very similar to the IPO (Initial Public Offering). The difference is that one requires a lot of regulation by the stock market, while the other is based on decentralization. In ICOs, the entry barrier to become part of a project is much lower.

2.Advantages

Setting up a project through an ICO is relatively easy compared to STO and IEO.
The cost of launching an ICO is relatively low, especially when compared to an Initial Public Offering (IPO).
The process is fairly straightforward and less cumbersome compared to the other two processes
Government intervention is less, making it a preferable option for fundraising for small investors
More liquidity in a short period of time
The team of founders as well as the employees of the project can be remunerated with the tokens issued initially, for remuneration purposes and as a form of variable compensation, it is much more attractive than the famous phantom shares or stock options that are offered to attract talent.

3. Inconveniences

One of the main drawbacks of this system is that the decentralization and lack of regulation, can favor the emergence of blockchain scams in which there is no solid project behind the ICO.

Would you like to launch an ICO but don't know how to...

Which platform to use for the launch? The parameters you should take into account for your smart contract, tokenomics, monetary policy... The network you should use ERC-20, BEP-20... And above all the legal requirements.

STO, IEO, IDO

1. What is an STO?

STO stands for Security Token Offering and is another fundraising tool, but it is more complex than an ICO.

In an STO, an investment contract is issued that is backed by the security token coins and registered on the blockchain platform.

Here the security token is asset-backed and represents ownership information that is digitally recorded in the blockchain community. It is like a digital certificate much like real-world stocks and bonds offered in exchange for the investment.

2.STO Advantages

STOs deal with real assets and comply with government rules, which is one of the main reasons why it is one of the most reliable investment tools in the world of cryptocurrencies
STOs are more secure due to limited accessibility and only recognized investors who have been properly authenticated can participate in STO operation.
It is good for long-term and serious investors due to high security

3. Inconveniences STO

The process is more complex and the cost of fundraising is higher in STOs compared to ICOs and IDOs.
Due to strict security regulations, cross-border investment is limited.
Low level of liquidity due to strict government regulations. In some cases, investments cannot be collected for a period exceeding one year.

4. What is an IEO?

IEO significa Initial Exchange Offering. In this case companies sell their tokens directly on an exchange such as Binance, Kraken or Coinbase, to individual participants without offering them in an ICO.

This means that in an IEO coins are exchanged directly for ETH (or other cryptoassets) on the IEO platform.

5. IEO Advantages

The vast majority of exchanges are verified by a verification system, known as Know Your Customer (KYC), which guarantees investors a high level of security.
Investors participate directly in the exchange, unlike ICOs and STOs.
Due to the levels of regulation, the platform is trusted and protects investors from fraudulent activities.
Participants do not transfer their contributions to a smart contract, but directly to their accounts.

6. Inconveniences IEO

The cost of fundraising is very high in IEO and the system itself is difficult to set up.
The IEO requires approval by the exchange when listing tokens for the project in question.
Investors have very little control over the exchange’s activities.