ICO and IDO
ICO and IDO are first-time sales of a new project's tokens to raise money. In an ICO the team sells tokens itself; in an IDO the sale runs through a decentralized exchange or launchpad.
How it works
An ICO (Initial Coin Offering) is a direct sale from the team: you send ETH or stablecoins to the project's contract or address and receive new tokens. ICOs peaked in 2017, when projects raised millions on a whitepaper alone. Many never shipped anything.
An IDO (Initial DEX Offering) runs through a decentralized exchange or a launchpad platform. Tokens often go straight into a liquidity pool, and trading starts the same day. There is also the IEO, a sale through a centralized exchange that picks the projects itself.
Rules for these sales differ by country: regulators often treat tokens as securities, and some sales are closed to residents of certain countries. The early price looks attractive, but investors often have vesting (gradual unlocking), and when it ends the supply on the market jumps.
In an IDO you buy 10,000 tokens at $0.05, so $500. On day one the price is $0.15, but only 25% of your tokens are unlocked. The rest arrives in parts over six months, and by then the price has dropped to $0.03. Across all your tokens you end up with $300, not the promised multiples.
The main mistake is jumping into a token sale out of FOMO without checking the team, tokenomics and unlock schedule. Many ICOs turned out to be scams or simply failed. Only put in what you could lose entirely, and never send money to an address from a chat or a private message.
Questions and answers
What are ICO and IDO in simple terms?
They are ways for new crypto projects to raise money by selling their tokens before or as they hit the market.
What is the difference between an IDO and an ICO?
An ICO is run by the team itself, an IDO through a decentralized exchange or launchpad, and trading usually starts right away.
Is it legal to take part in an ICO?
It depends on the country: in some places such sales are regulated like securities offerings or barred for residents. Check your country's rules and the sale's own terms.
Related terms
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Updated: 2026-10-19