How are tokens created and launched in Web3?
The crypto industry has tens of thousands of assets today, and new projects launch every month. All of this activity begs the question how new projects are created and brought to the market. Creating tokens and making them available to the market is the subject of this course. Multiple methods – from popular to obscure – will be explained for how a new crypto project joins the market.
What is an initial coin offering?
Initial Coin Offerings (ICO) is one of the first methods for launching new crypto projects to the market. Many of the most popular crypto projects today started as ICOs, including Ethereum. ICOs started in 2013 with a white paper for MasterCoin, which raised $600,000.
ICOs usually include materials that describe the purpose and mission of a project. Investors are then free to engage with the project or not. Some ICOs have different requirements and limitations for who and how Web3 natives can participate.
ICO launches have many advantages. Some of the primary benefits are easy of launch and permissionless access. Executing the mechanics of an ICO is often fairly easy, and anyone in the world can participate by using a blockchain like Ethereum, Oasis, or others.
ICOs have some risks and downsides too though. Some project launches run afoul of regulations and face government action after the fact. ICOs are also high-risk opportunities without government protection if a project fails or is a fraud.
What is an initial game offering?
Initial game offering (IGO) launches are a comparatively new attraction in the crypto market. Similar to ICOs, an IGO hosts gaming projects with tokens or in-game collectible assets. In the Web3 field of GameFi, IGOs are growing in popularity to bring new crypto gaming projects to the market in an easy and accessible way.
In general, IGOs carry many of the same risks and advantages as ICOs. Understanding the quality of a project conducting an IGO is essential. All IGOs are inherently risky, and Web3 users should be careful when considering new IGO opportunities.
What is an initial farm offering?
Initial Farm Offerings (IFO) are a token launch mechanism that became popular in the 2020s as an alternative to ICOs for making crypto projects available to investors. One of the most prominent examples of a platform that supports IFOs is PancakeSwap.
Before IFOs, another type of launch program called Initial Exchange Offerings (IEOs) was also popular. Tokens would launch on a centralized exchange platform. But IFOs take a more decentralized approach using distributed platforms.
What is a token launchpad?
In short, launchpads (a.k.a., crypto incubators,) are platforms that allow blockchain projects to go to the market. Since the cost of launching on a crypto launchpad (crypto launchpads) is low or insignificant, more and more projects are turning to launchpads. Launching a project through a launchpad gives new founders access to a community of crypto investors ready to explore a new project.
Crypto launchpads are a popular mechanism for making tokenized assets available to investors in the Web3 space, but they carry risks. Most launchpads require large investments, which can be quite expensive. And the success of a launchpad is directly connected to the quality of the assets it offers to the market.