What Are the Key Differences between an ICO and a Traditional IPO?
An ICO (Initial Coin Offering) involves the sale of crypto tokens to raise capital, often with less regulatory oversight and lower barrier to entry. An IPO (Initial Public Offering) is the first sale of stock by a private company to the public, which is heavily regulated and requires extensive disclosures and underwriting.
IPOs grant equity ownership in the company, while ICOs typically grant utility or security tokens with varying rights.
Glossar
Security Token Offering
Framework ⎊ A Security Token Offering (STO) represents a paradigm shift from traditional Initial Coin Offerings (ICOs) by issuing digital tokens representing ownership in underlying assets, such as real estate, equity, or debt, governed by securities regulations.
IPO
Valuation ⎊ Initial Public Offerings, within the cryptocurrency ecosystem, represent a novel mechanism for projects to access capital, diverging from traditional venture funding routes and often utilizing token generation events.
Regulatory Oversight
Stability ⎊ Effective regulatory oversight is essential for imposing capital and margin requirements that promote overall market stability, particularly in the high-leverage environment of crypto derivatives.