Aren’t you tired of being left behind?
I know I am. So, this is the year I figure it all out… and I’m bringing you with me.
I’m beyond dipping my toe in the water. It’s time to cannonball into the ocean of cryptocurrencies. I’m ready to decode this hot new way of investing and have fun doing it. So, come on. Let’s make a splash.
Decoding the Cryptocurrency World
While crypto news is a great place to start learning how to buy crypto, it can only get you so far if you don’t understand the language.
After all, we must learn how to jump before we learn how to cannonball.
So, let’s start at the beginning.
Let’s talk about ICO, IEO, and IDO. What do they mean? What do they do? And no, the answer isn’t found at Old MacDonald’s Farm.
What is an ICO?
ICO means Initial Coin Offering. For the investors out there, this is the crypto equivalent of an initial public offering (IPO). For those who don’t speak the investor lingo, it’s a way for a company to raise funds by creating a new coin, app, or service.
ICOs are typically structured a few different ways:
- Dynamic Supply and Static Price – Supply is determined by the amount of funds received
- Static Supply and Dynamic Price – Amount of funding received determines the price per token
- Static Supply and Static Price – Fixed token supply and pre-set token price
The crypto projects also provide information to potential investors such as the project details, goals, accepted payments, etc.
Anyone with the proper tech can launch an ICO so it’s imperative you do your homework before investing. Just because someone can launch an ICO doesn’t mean they should, and it doesn’t always mean you should invest.
What is an IEO?
IEO means Initial Exchange Offering. IEOs are said to be the next evolutionary step behind ICOs. It’s a token sale that is supervised by a crypto exchange. IEOs are exclusive to members of the cryptocurrency exchange but sometimes occur in multiple exchanges.
IEOs tend to have a little more credibility because the cryptocurrency exchange is putting their reputation on the line by acting as the mediator. Basically, they do some of the legwork to make sure the offering is legit.
However, no investment is without some degree of risk.
What is an IDO?
IDO means Initial DEX Offering. And, yes, it’s another evolution of the ICO and the IEO. Think of it like an IEO with more freedom.
Instead of using a cryptocurrency exchange as a mediator, IDOs launch on a decentralized exchange. This allows immediate and fair trading for the investors while providing automatic liquidity for the project.
This means instant access to the funds but also more price volatility.
IDOs are both the newest fundraising option, and it’s possible that soon they will be the most popular. After all, instant liquidity and the added benefit of not having to pay a listing fee are quite appealing.
These listings are vetted by the community rather than by an exchange, so once again, it’s important to do your research.