Gm Gm folks!
Are ya’ll ready for Day 9 of #web3glossary ?
I: ICO, IEO
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We have IPO's in traditional web2 companies, what about web3?
Let’s talk about crowdfunding models in this space!
In web3, we have ICO - Initial Coin Offering. A company seeking to raise capital to create a new coin, app, or service uses an ICO (selling tokens to the public) to raise funds.
Interested investors can buy into an initial coin offering to receive a new cryptocurrency token issued by the company.
What value will you get out of it?🤔👇
This token can have some utility related to the product or service the company is offering , but doesn't gaurantee any equity in the company‼️
2017 was the year of Initial Coin Offering, where project were funded on the basis of white papers.
ICOs are (almost) completely unregulated, so DYOR before investing in them‼️
Back then ICO was a hassle-free mode of fundraising & hence gained popularity. The spike in adoption of ICOs came as a quick money-making opportunity for not only startups and investors but also spammers
Hackers continued robbing investors in the name of lucrative investments until 2019, that's when
IEO's came into picture.
IEO = selling tokens to raise capital with increased regulation.
Its similar to ICO, but unlike an ICO, an IEO is managed by an existing cryptocurrency exchange.
IEO's take care of the entire launch and promotion of the funding process.
IEO’s come with many advantages: more trust, exchange takes care of the whole KYC and AML process and ofc legal protection
Do you think IEO is the concrete future of Blockchain based Crowdfunding economy?
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There are other blockchain funding models like DAICOs and ETOs out there.
If you’d like to know more on this, let me know in the comments. Will share a thread covering these models and their impact on your business!
Thats a wrap for Day 9!
I post a thread covering the new vocabulary of the web - web 3.0, for next 30 days.
It’s like a free crash course on the terms and methodolgies in Web3
📌Follow me @laishawadhwa for more such web3 gyaan!
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