Difference Between An ICO and IDO
ICO, STO, and IEO (also known as initial dex offering) are some of the most familiar terms used in the crypto world, all of which are related to fundraising using Blockchain technology. The ICO, the STO, and the IEO are all different methods of raising funds through cryptocurrency exchange, and they all have their pros and cons.
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Difference Between an ICO and IDO, IEO, STO
What is an ICO?
Initial Coin Offerings are by far the most popular type of crowdfunding.
ICOs are typically used to launch new products or services in the crypto market, such as cryptocurrency tokens or apps. IPOs (Initial Public Offerings) are used by new companies seeking funds when they venture into the stock market for the first time.
You can find the ICO calendar of various projects from here
IDO (Initial DEX Offering)
There is a special case of IEO called IDO. IDO is executed on a decentralized exchange, whereas IEO is conducted on a central exchange.
How does an ICO work?
To raise funds, an ICO issues crypto coins or digital coins against investments and sells them at a discount.
If the price of the token increases from its original price, the investors will gain profit just like on the stock market.
What is IEO? Explained:
IEO is comparatively new in the market and stands for Initial Exchange Offerings. Here companies directly sell their tokens in the exchange to individual participants without offering them in an ICO.
How does an IEO work?
In an IEO, the coins are exchanged directly for ETH in the IEO platform.
Here the contributor creates an account in the exchange and sends ETH to the account. When the IEO starts, the ETH is directly exchanged for the tokens.
What is STO? Explained:
STO or Security Token Offering is another fundraising tool but is more complex and difficult compared to an ICO.
How does STO Work?
STO issues an investment contract which is backed by the security token coins and are recorded in the blockchain platform.
Here the security token is asset-backed and represents the ownership information which is recorded digitally in the blockchain community. It is like a digital certificate much like the real-world stocks and bonds that you offer in exchange for the investment