A token offering is the process by which a startup crypto project supplies a new cryptocurrency or token in exchange for capital. They can be intriguing investment opportunities for people looking to acquire the tokens of innovative projects early and at a cheap price. The opportunity to buy a token before it is made available on an exchange can be extremely rewarding. Some investors may purchase the coins for their utility while others may do it for speculation. For example, you might use the coin for DeFi applications, staking in a governance mechanism, paying transaction fees, or participating in a launchpad.
Participating in token offerings does not always equate to riches. The ICO (Initial Coin Offering) craze of 2017 on Ethereum (ETH) was ripe with scams and rug pulls were widespread. Many investors suffered big losses because they tried to catch the next hot token offering without doing proper research. Since then, the crypto community has developed alternative token offering methods, including the Initial Exchange Offering (IEO), Initial DEX Offering (IDO), and Security Token Offering (STO), among others.
IDOs have become a popular choice for people exploring token offering investments, but how do they differ from ICOs, and are they safer for investors? Take this course to learn about the differences in each token offering and other important aspects of launchpads in practice.