What Is an ICO? A Simple Guide to Understanding Initial Coin Offerings

Many people associate the abbreviation ICO with the “golden” times of the crypto industry. During the heyday of this trend, which came in 2017-2018, the probability of not only returning the invested funds, but also getting multiple profits was much higher than now.

Platforms like CoinList became financial “springboards” for promising projects, and investors were hunting for any new token, counting on quick …x’s.

In 2025, some projects continue to use this tokensale format to raise capital, and many expect a “revival” of this format amid a changing regulatory climate in the U.S. 

CoinPaper’s editorial team looked into how ICOs are structured, what risks they carry, and how newcomers can participate in such sales.

What Is An Initial Coin Offering (ICO) and How Is It Conducted?

ICO (Initial Coin Offering) is a way to raise capital for cryptocurrency projects. It involves launching a token by a team and then selling it to early investors to obtain funding for product development.

Along with IDO and IEO, ICO is one of the best known formats for initial token offerings, although it has lost much of its relevance in 2025 due to fraud and a number of other risks to investors and developers;

As a rule, an ICO is conducted at the early stages of development, and the platform for placement is either a specialized platform like CoinList or the project’s website. In this case, the team or platform takes care of all key issues related to the organization of the tokensale, including:

• marketing strategy;
• tokenomics development;
• legal support.

Poor preparation and a raw product can scare off investors, and in some cases, lead to platforms refusing to host an ICO.

How Can a Newcomer Participate in an ICO?

Buying tokens through an ICO is a complex process where preparation, project selection and reputation on the platform are important. Beginners can conditionally divide the whole process of participation into three stages:

1. Registration and reputation on the platform

The first step is to create an account on ICO platforms like CoinList or Tokensoft. Most of these services require KYC (identity verification), without which it is impossible to participate in a token sale.

Some tokensale platforms also use reputation systems to determine the chances of receiving allocation or access to closed sales. During the reputation assessment, participation in past ICOs, activity on the platform or staking may be taken into account. The higher the reputation level, the more privileges an investor receives;

2. Buying cryptocurrency and funding your balance

Most platforms allow investors to buy tokens in exchange for cryptocurrency like USDT, USDT or Ethereum, so users need to purchase digital assets before starting the sale. This can be done on crypto exchanges like Binance or Bybit, OKX or through other platforms. 

After that, it is necessary to transfer funds to the internal balance of the ICO platform or the address specified by the project (wallet or smart contract). It is worth checking the minimum and maximum deposit limits, commissions and crediting time in advance in order to have time to deposit assets before the sale.

3. Selection and analysis

Even during a rising market, not all ICOs are profitable, so it is important to analyze the project and the current market situation. Key points to pay attention to when evaluating a proposal:

• team. The success of a project depends not so much on the idea, but on the people behind it;
• marketing and community. Without an active audience, competent promotion and maintaining interest, even a promising project quickly loses ground;
• documentation. Should include the technical side of the product, tokenomics, and development strategy. If the team avoids clear explanations, that’s a red flag;
• reputation and partners. It is worth checking who has already invested in the project, whether there are large funds and media support among the partners;
• Market trend. Even strong projects may not take off if they don’t fall into the current narrative;

Top 3 ICO platforms

The ICO-platforms market is not characterized by a large number of platforms – launching a full-fledged luncheon requires serious resources, regulatory compliance and a well-developed infrastructure. Nevertheless, several services offer investors access to this tokensale format.

CoinList

CoinList is the largest and most sought-after ICO platform. Since its launch, it has has conducted 57 tokensales, raising more than $1.2 billion in total. Many projects that have gone live on CoinList have demonstrated high returns after listing, making the platform one of the most lucrative for investors. The platform also offers an intuitive interface, so it is suitable even for beginners.

Tokensoft

Tokensoft is one of the first ICO lunches to emerge in the industry. Since launching in 2017, the tokensoft platform has conducted 31 tokensales, raising more than $700 million.

Unlike CoinList, Tokensoft is focused primarily on projects, providing them with tools to organize initial offerings, distribute assets, and comply with AML/KYC procedures. Because of this, each ICO follows its own rules, and the requirements for participants are set by the project itself.

To register, all you need to do is connect your wallet and verify via email. The requirements for participation in the tokensale become available before it is launched.

Republic

Republic is a multifunctional investment platform operating in several industries at once, including the cryptocurrency market. It has organized 20 successful ICOs since its launch.

The main feature of Republic is a high level of regulation. Unlike most lunchepads, here the participants of the sale receive Token DPA – a document that fixes their investment and entitles them to receive further project tokens. Allocation depends on the investor’s income level, which is specified during registration. This makes Republic less accessible for retail investors, but more attractive for institutional capital and large players.

In fact, the presented platforms are aimed at different categories of investors. For example, CoinList is the best option for retail users, Tokensoft will be more convenient for developers, and Republic is focused on large investors who are interested in regulatory protection and guarantees. The choice of a platform depends on the investment objectives, capital level and willingness to undergo the necessary verification procedures.

Risks of investing in ICOs

Investing in an ICO involves a high degree of uncertainty and can bring both multiple profits and complete loss of funds. Among the main risks for the investor are:

Fraud and team incompetence.

Even the most promising idea and sufficient funding do not guarantee success if an inexperienced or unscrupulous team is behind the project. There are plenty of examples in the crypto market where incompetence, management errors or deliberate deception led to the collapse of a startup and the loss of investor funds;

A situation where a team simply disappears with the money is one of the most common fraud schemes in ICOs. 

Regulation.

In 2025, in most countries, ICOs are still in the gray zone of regulation, that is, they are not prohibited, but also do not have a clear legal framework. Unlike IPOs, where investors are protected by laws and can expect a refund in case of fraud, in an ICO the team may not be held liable. 

On the other hand, regulators could tighten legislation on tokensales or digital assets in general at any time, which could affect the fate of projects and the price of tokens.

Technical challenges.

Despite their decentralized nature, blockchain platforms are not immune to hacks and vulnerabilities. For example, a bug in the code of a smart contract could cause investors or a team to lose funds raised. If the vulnerability affects users, it could undermine the credibility of the product and also affect the price of the token. Therefore, it is important to check whether the project has audited smart contracts. 

Market factors and project revaluation

Even if the project is promising, the success of an ICO strongly depends on the general state of the market, as well as the valuation of the token. Thus, if investors’ expectations are inflated and the real utility of the token is absent, the price is likely to go down quickly. In addition, a project may enter the market at a time when interest in its sector has already faded or the industry as a whole is in a downward phase.

ICOs remain one of the most lucrative, but also the riskiest ways to make money in the crypto market. However, learning about the team, jurisdiction, technical background and market narrative will help reduce the likelihood of mistakes and increase the chances of profit.

Where can I find current ICO offerings?

You can find out about current and upcoming ICOs from several sources, including social networks, specialized aggregators, and tokensale platforms themselves.

For example, the platforms themselves usually publish information about future tokensales on their website and send notifications to registered users. Up-to-date news about upcoming ICOs often appear in Telegram channels, X and Discord communities. Therefore, it is worth following the accounts of projects or analysts specializing in this market segment;

You can also use aggregators like CryptoRank or CoinMarketCap to track current and planned seals.

Which ICOs will be relevant in 2025-2026?

It is difficult to predict specific projects or even ICO trends due to the unpredictability of the market, but trend analysis allows us to understand which sectors will be most in demand. 

Artificial intelligence and DePIN remain in the spotlight. Real Asset Tokenization (RWA) also continues to gain momentum, and the gaming industry remains one of the main drivers of mass Web3 adoption.

In addition, the bitcoin ecosystem goes beyond the traditional model of storing and transferring value. The popularity of Ordinals and BRC-20 is driving the creation of new tools that extend the functionality of the network, gradually transforming bitcoin into a full-fledged smart contract platform.

An additional factor influencing the market is the political situation in the United States. Donald Trump’s victory may lead to a relaxation of regulation of the crypto industry, which will make American projects more attractive to investors. Companies operating in the US jurisdiction will get more opportunities for growth, which will increase their competitiveness on a global level.

Conclusion

ICO remains a sought-after funding tool in the crypto industry, although its popularity has declined from its 2017-2018 peak. Despite the emergence of alternative models such as IDO and IEO, initial coin offerings continue to attract investors willing to fund early-stage projects for the sake of high potential returns.

At the same time, successful participation in an ICO requires a thorough analysis of platforms and projects. Key factors include the competence of the team, transparency of tokenomics, compliance of the project with market trends, as well as legal and technical security. In a highly competitive environment, only high-quality initiatives receive funding, and tokensale participants who pay attention to details significantly reduce their risks and increase the probability of profit.

Frequently asked questions (FAQ)

How does an ICO work?

The project issues tokens that can be used in the project ecosystem and traded on exchanges and sells them to investors to raise capital. Investors expect the value of the token to grow and earn profits as the product develops.

What is the difference between an ICO and an IPO?

An ICO raises funding through the sale of tokens, whereas an IPO involves issuing shares in a company. Unlike IPOs, ICOs are not strictly regulated, which makes the process simpler, but also increases risks for investors.

What is the difference between an ICO and an IDO?

An ICO is conducted directly by the project or through special platforms such as CoinList. IDOs are launched on decentralized exchanges, which makes the process more automated and transparent.

Where to find an ICO?

Up-to-date ICOs can be tracked on lunchespads, social media sites and aggregators.

What is the price of an ICO?

This is a fixed or sales-driven token value set by the project to raise funds during the initial offering phase.