INTRODUCTION

ICO is an abbreviation we’ve all come across in this crypto universe. Learning about the term and their examples from professor @imagen has been a straightforward but wonderful experience. So I’ll just go ahead and complete the tasks

ICO

source

ICO is an acronym that stands for Initial Coin Offering. It is the blockchain equivalent of an IPO. It is a means by which companies try to raise money for a crypto project by the sale of what is referred to as Tokens.

Tokens, which are kind of equivalent to shares, are sold to investors for fiat money or other established cryptocurrencies during an ICO campaign. These tokens are speculated as potential units of the crypto currency given the project succeeds. The investors buy tokens with the hopes that they would be worth a lot more after the token is launched.

Typically, a whitepaper that explains a crypto project is published before any ICO campaign. Some of the information on the whitepaper could include campaign time, the project vision, how much funds is required, number of tokens to be sold and so on. In short terms, a whitepaper explains the overall goals or objectives of the crypto startup involved. It is important for enthusiastic investors to go through the whitepaper of an ICO before putting in any money in the project.

As mentioned above, the reason for an ICO is to raise funds for a crypto project. An ICO is considered successful when the money raised during the given campaign period equals the minimum amount required as stated in the whitepaper. This minimum is referred to as the “ Soft Cap”. The money then raised is used to finance the project and essentially keep it alive. However, if the money raised does not meet the Soft Cap, the ICO is considered as unsuccessful and the money generated is returned to the investors.

Difference between ICO and IEO

IEO, which stands for Initial Exchange Offering, is a type of campaign organized by an exchange to raise funds for crypto startup projects. Just like an ICO, investors get to buy tokens with the hope of getting high returns when the crypto launches.

Below are some differences between ICOs and IEOs

Initial Coin Offering	Initial Exchange Offering
Fundraising is conducted by the team	Fundraising is conducted by the exchange
There is an element of suspicion	There is greater trust as the exchange’s reputation is in line
Raising awareness	An already established audience
Investors manage their tokens	The exchange manages the tokens
Completely decentralized	Brings In centralization
No verification required	There is usually some sort of verification(KYC, etc.)
Lower liquidity	High liquidity

Advantages and Disadvantages of ICO

Advantages

• Potential high returns: The main advantage of ICOs is that the gains at launch are really high with an average investor making 82% ROI according to ccn.com.

• Little paperwork: ICOs, unlike IPOs, don’t require paperwork for participation. The tokens are easily issued by smart contracts on the blockchain.

• Liquidity: As with cryptocurrencies in general, ICOs are easily trade-able after they get listed as official currencies.

• Opportunity to own a new currency: Through the sale of tokens, ICOs provide individuals the opportunity to own a new digital currency at an affordable price.

• Funding opportunities for startups: An ICO is a great way for startups to receive funding from the public for their projects without going through the hassle of banks.

Disadvantages

• Risky: According to Investopedia, 80% of ICOs are scams. That means that 2 out of 10 are genuine. Such statistics show that investment in such “projects” are very risky.

• Lack of regulations: The problem of no regulations on ICO means that investor rights are not protected.

• Volatility: ICOs are prone to quick market movements at launch. So, as quick as prices can surged is as quick as the can dip leading to losses.

ARK

" ^{cryptologos.cc}

Founded in 2016 by Cathie Woods, Ark is a cryptocurrency and blockchain technology that aims to help develops interact better with blockchain technology.

Ark’s ICO started in November 2016 and ended in December of the the same year raising over $800 thousand. Through diligent financial planning, the project scaled through and the Ark Public Network was launched in March of 2017 and the crypto became trade-able.

Ark’s token price was about $0.04 during the ICO. It’s All Time High is around $10.2 which it attained in 2018. The coin, however, is currently trading at $2.4 as of writing. I believe it is pursuing its all time high.

" ^{CoinMarketCap.com}

Some statistics of ARK as of writing

Price	$2.42
Rank	#173
Market cap	$311,164,690.01
Trading volume	8,119,608.51<\td>
Circulating supply	128,565,053 ARK
Total supply	156,685,950 ARK

" ^{stats from CoinMarketCap.com}

Conclusion

The idea of ICOs are ingenious on the part of crypto startups. They are also great for investors as long as the right ICOs are picked. From lates developments, it seems like the future is bright for ICOs. Let’s just wait and see...

Special thanks to @imagen