ICO or Initial Coin Offering is a mechanism for raising funds, under the terms of which digital tokens are sold for various liquid cryptocurrencies.
Usually, three different types of tokens are distributed:
- Virtual currency: Virtual currencies are generally coins with their own blockchain, used as a payment option with various features.
- Utility: Utility tokens are used in their own projects only, providing bonuses or used to pay for services.
- Equity: Equity tokens, or securities, offer either dividends or other means of profit, a share in a company or a right to vote. Backers support campaigns now to get some benefit later.
Pre-ICO is a stage before the ICO (main stage), fundraising for the project. Pre-ICO is conducted to test and verify the demand for the project, get support from the community, and expand the budget for marketing before the main ICO. Not all projects carry out a pre-ICO.