In traditional finance, raising millions requires a polished pitch deck and a seat at a boardroom table. In 2017, the script flipped: all it took was a technical whitepaper and an internet connection. This was the era of the Initial Coin Offering (ICO), a movement that rewrote the rules of fundraising by allowing teams to raise billions directly from a global public.
While the “Wild West” days of unregulated crowdsales are over, the core mechanics of public token distribution is seeing a massive, professionalized resurgence. From high-profile sales like Monad’s $187.5M launch on Coinbase in late 2025 to the rise of compliant Token Generation Events (TGEs), the demand for widely distributed token launches is stronger than ever.
Understanding how the ICO era evolved is essential for any investor or founder today. The labels have changed, and the standards have tightened, but the underlying goal remains the same: building a community-owned network with global reach.
What Is an Initial Coin Offering (ICO)?
An initial coin offering (ICO) is a token fundraising event where a project creates (mints) a new crypto token and sells part of its supply to the public. The goal is to raise capital for product development, network launches, or operations.
Unlike traditional equity, buyers pay using established crypto (like Bitcoin/ Ethereum BTC/ETH or stablecoins) and receive the new token at a set price or via a sale mechanism (fixed price, auction, or tiered rounds).
In the 2026 landscape, a professional launch typically includes:
- Tokenomics & supply plan: Breakdown of total supply, circulating supply at launch, and how much the team is selling vs reserving (team, treasury, incentives).
- Sale terms: price (or pricing method), accepted currencies, minimum/maximum contributions, sale dates, and eligibility/KYC rules.
- Use of funds + roadmap: what the raise funds, expected milestones, and how funds will be held and deployed.
- Distribution and lockups: when buyers receive tokens, plus vesting/unlock schedules for team and early backers.
- Listing/liquidity plan: whether the token is expected to trade on exchanges/DEXs after the sale (often implied, sometimes explicit).
Funding targets are defined by a hard cap (the maximum amount to be raised) and a soft cap (the minimum needed to proceed). In today’s market, these figures are typically tied to a transparent valuation model, ensuring participants understand the project’s total market value at launch.
How ICOs Typically Worked
While formats varied, most ICOs followed a repeatable pattern:
- A team publishes a white paper and token terms
The document outlines the problem, the network design, token utility, supply, distribution, and planned roadmap. - The project sets sale mechanics
Common parameters included a sale date, accepted currencies, pricing, caps (hard cap/soft cap), and bonus structures. Many projects also used vesting for team allocations, although early ICOs often did this inconsistently. - Buyers send funds and receive tokens
In many ICOs, a smart contract handled issuance and distribution. In others, the process relied on manual allocation or centralised intermediaries. - Tokens begin trading (sometimes quickly)
Tokens often appeared on secondary markets soon after the sale, which intensified speculation and created a feedback loop: marketing drove demand, demand drove price, price drove more marketing. - The project attempts delivery
Some teams shipped meaningful products. Others failed, stalled, or disappeared. Regulators later treated “use of proceeds,” disclosures, and marketing claims as important evidence in enforcement actions.
Why ICOs Became the Default Fundraising Playbook
ICOs solved a real coordination problem for early crypto networks. They funded development while distributing tokens to potential users and stakeholders.
That combination of capital formation and network bootstrapping proved powerful, especially once Ethereum made token issuance straightforward through smart contracts.
They also removed friction compared with traditional fundraising. Teams could raise funds without a stock exchange listing, and global buyers could participate with minimal onboarding.
That same openness, however, amplified fraud risk, mis-selling, and suitability concerns, which later drove regulatory intervention.
The Evolution of the ICO Market
The ICO market didn’t just boom and bust; it matured through distinct phases, moving from experimental code to industrialized finance. Here is how the fundraising landscape shifted:
1. Early Experiments (2013–2015)
- The Vibe: Proof of concept.
- The Core: Early projects like Ethereum (2014) proved that a protocol could fund its own development by selling “utility” tokens directly to its future users, bypassing traditional VC gatekeepers.
2. The DAO & The Governance Pivot (2016)
- The Vibe: Radical decentralization.
- The Core: The DAO’s massive raise and subsequent hack forced a reality check. It raised the critical question: If a token gives you a “vote” on a pool of money, is it a piece of software or an investment contract?
3. The Industrialized Boom (2017)
- The Vibe: FOMO and “The ERC-20 Gold Rush.”
- The Core: Launching a token became a “copy-paste” process on Ethereum. Massive marketing and “instant” exchange listings turned ICOs into a global retail phenomenon, raising billions with little more than a website.
4. The Regulatory Reckoning (2017–2018)
- The Vibe: Substance over labels.
- The Core: Regulators (like the SEC) declared that calling something a “utility token” didn’t exempt it from securities laws. High-profile enforcement actions and a wave of “dead” projects ended the era of anonymous, unregulated public sales.
How it’s Turning Out Now
The market did not abandon token fundraising; it professionalized it. Most teams that still want wide distribution now use formats designed to reduce legal and operational exposure:
- More gatekeeping and intermediated sales: Exchanges and launch platforms introduced IEO-style models, tighter KYC, eligibility filters, and curated listings to reduce obvious fraud and improve screening.
- More structured legal packaging: Many projects shifted toward private placements, SAFT-like approaches, or jurisdiction-specific offerings to manage securities risk and investor classification.
- More emphasis on delivery and tokens-as-product: Teams increasingly pair token launches with working products, clear token utility, and measurable network activity, because markets punish “token first, product later” more quickly now.
- More compliance in the token itself: Transfer restrictions, allowlists, vesting enforcement, and on-chain auditability show up more often—especially where institutions participate or regulated distribution applies.
- More “ICO mechanics” under new labels: Airdrops, points programs, community allocations, and incentive campaigns often serve the same distribution goal, but they typically try to avoid direct “public fundraising” optics.
Initial Coin Offering (ICO) vs Initial Public Offering (IPO)
ICOs and IPOs can look similar on the surface—public sale, allocation, and “listing day” excitement—but they operate under very different legal and investor-protection frameworks. This comparison clarifies what buyers actually receive, what issuers must disclose, and what recourse investors have when things go wrong.
| Dimension | IPO (Initial Public Offering) | ICO (Initial Coin Offering) |
| What you buy | Company shares (equity) | Tokens (rights vary by design and terms) |
| Ownership & claims | You own a stake in the company and usually have residual claims on assets/earnings | You typically do not receive ownership; claims may be unclear or purely functional (utility) |
| Investor rights | Shareholder rights often include voting, dividends (if declared), and defined legal protections | Rights depend on smart-contract rules and offering terms; may include no voting, no revenue rights, no enforceable claims |
| Disclosure standards | Issuers must meet regulated disclosure requirements (financials, risk factors, governance, use of proceeds) | Disclosure quality varies widely; documents can be marketing-heavy, technically dense, or incomplete |
| Regulatory oversight | Strong: securities regulators supervise filings, intermediaries, and market conduct | Mixed: some ICOs fall under securities rules, others sit in grey areas depending on jurisdiction and token design |
| Intermediaries & gatekeepers | Underwriters, auditors, exchanges, legal counsel, and ongoing reporting obligations | Often fewer gatekeepers; projects may sell directly to the public via websites or smart contracts |
| Use of proceeds | Typically constrained by disclosure and corporate governance; accountability mechanisms exist | Often broad discretion; governance and accountability can be weak or informal |
| Listing & trading | Listed on regulated stock exchanges with market rules and surveillance | Tokens often list on crypto exchanges/DEXs; market quality and surveillance vary by venue |
| Settlement & custody | Broker/custodian infrastructure with established custody, clearing, and dispute processes | Users often self-custody or rely on exchange custody; irreversible transactions raise operational risk |
| Recourse if misled | Clearer legal pathways (securities law, shareholder actions, regulator enforcement) | Recourse often limited, cross-border, and dependent on whether regulators classify the token sale as a securities offering |
| Typical risk profile | Still risky, but anchored by disclosures, governance norms, and ongoing obligations | Higher uncertainty: tech risk, tokenomics dilution, market manipulation, and legal classification risk |
That IPO language, ICO substance gap explains why many buyers got hurt in the ICO era. They priced tokens like early equity, but tokens frequently delivered no ownership, no governance, and weak enforceability, while still trading with extreme volatility.
How ICO-Style Launches Work in 2026
The ICO label largely disappeared, but the underlying playbook—token distribution, liquidity formation, and narrative-driven demand—did not. In 2026, teams package “ICO mechanics” inside formats that look more structured, gated, and operationally mature, often to reduce regulatory and market-structure risk.
What replaced the ICO label:
- IEOs (exchange-run sales): Exchanges curate projects, run the sale, and typically apply KYC/eligibility checks. In return, issuers get distribution and faster access to liquidity, while exchanges position themselves as a screening and market-integrity layer.
- IDOs (DEX-based launches): Tokens launch through decentralised venues, often by seeding liquidity pools and letting price discovery occur on-chain. These launches can be fast and global, but they also concentrate risk in liquidity design, bot activity, and early volatility.
- TGEs (token generation events): A broader umbrella term that can include private rounds, community allocations, airdrops, staking/points conversions, and staged unlocks. TGEs are often designed as a sequence rather than a single public sale, with distribution spread across multiple cohorts and time periods.
What “ICO fundraising” looks like now
Instead of a single public crowdsale, many projects in 2026 run a staged distribution model:
- Private allocation first (strategic partners, funds, market makers) to seed liquidity planning and support early operations.
- Community allocation (allowlisted sales, points programs, airdrops, or participation-based claims) to broaden holders without an open public sale framing.
- Liquidity and listing choreography (DEX pools, exchange listings, market-making agreements) to shape early price discovery and reduce disorderly launches.
- Vesting and unlock engineering to control sell pressure, align incentives, and signal “supply discipline” to the market.
Even when the label is IEO/IDO/TGE, the due diligence questions are the same, and they determine whether the launch is durable or purely extractive:
- Rights and value accrual: What does the token do (fees, governance, access, collateral role), and what drives sustained demand?
- Control and governance: Who can upgrade contracts, pause transfers, change parameters, or influence treasury decisions?
- Supply and dilution: What is circulating today, what unlocks later, and how concentrated is ownership?
- Liquidity formation: Where does liquidity live (CEX, DEX, both), how deep is it, and what happens under stress?
- Buyer expectations: How does the project market the token, and does that marketing create profit expectations that increase regulatory sensitivity?
In practice, 2026 token launches are less about a single “ICO moment” and more about operating a distribution-and-liquidity program over time with compliance posture, supply control, and market integrity treated as first-class design constraints.
Why the ICO Legacy Still Matters
The ICO era was more than just a speculative bubble; it was a stress test that defined the modern playbook for digital assets. It taught the industry that sustainable growth depends on four pillars: economic reality, clear purchaser expectations, ethical conduct, and transparent promises.
Today, the “send-and-hope” model has been replaced by a requirement for institutional-grade execution. Launching a token in the current market demands a sophisticated infrastructure that handles everything from compliant onboarding and secure custody to real-time policy monitoring.
Scale with Certainty
Success in today’s landscape requires more than just a listing—it requires a foundation built for scrutiny. ChainUp empowers exchanges and token issuers to operate at scale using advanced MPC (Multi-Party Computation) wallet infrastructure, rigorous governance controls, and automated compliance tooling designed for the world’s most regulated environments.
Don’t leave your launch to chance. Before you go to market, ensure your platform utilizes ChainUp’s industry-leading infrastructure to guarantee security and compliance from day one.
