Initial Coin Offering (ICO)
An initial coin offering (ICO), also known as a token sale, is a crowdfunding method used by blockchain projects to raise capital. New cryptocurrency networks or decentralized applications (dApps) typically use their own native digital currency to allow users to interact with the network or service. Typically, a percentage of the total supply of these native currencies are sold during the ICO, usually in return for an agreed sum of Fiat money or another digital currency such as Bitcoin.
The highly volatile nature of ICO has made them popular with investors and speculators, but as an unregulated method for crowdfunding it has often been abused for fraudulent purposes. This has led to some countries, such as China, to ban them outright.
There is no current standard methodology for performing an ICO, but smart contract platforms such as NEO are often used to facilitate the process. NEX and Moonlight, two projects with their tokens on the NEO blockchain, have both released ICO contract templates coded in Python and C# respectively.
- "China bans ICO". BBC.