It was only just a few years ago that Initial Coin Offerings, also known as ICOs, were all the rage in the crypto community. These days, we are probably seeing less and less of these compared to their previous numbers but something else has taken their place – Initial Token Offerings.
Initial Token Offerings, or ITOs, are very similar to ICOs. The two terms are often used synonymously but there are several subtle differences between the two.
While ICOs are primarily used to fundraise for a new cryptocurrency, the focus of ITOs tend to center around the offering of tokens that have a proven (or unproven) intrinsic utility.
These benefits could include the token granting investors access to a platform via a subscription. Token holders could unlock the right to use exclusive services within the platform ecosystem. One example of this would be an exchange that offers lower trading fees when using their platform’s token.
There is a key distinction here highlighting the difference between coins and tokens in the Crypto space (even though both terms appear to be often used simultaneously).
Coins are cryptocurrencies that operate on their own independent blockchain. Examples of this are many and include Bitcoin (BTC), Ethereum (ETH) and Cardano (ADA).
Tokens, on the other hand, are cryptocurrencies that operate on a sublayer within an existing blockchain. For example, token assets that typically ten to use Ethereum’s ERC-20 standard are Ethereum tokens on the ETH blockchain.
Consequently, ITOs are more closely related to tokenization than to crowdfunding.
ITOs can be based on fungible tokens as outlined above, or NFT based. As an NFT is a form of token (it’s an abbreviation of Non-Fungible Token), they can be used as a source of ITOs.
In the promotion of our Gates of Ethernity project, we are initially offering NFTs via several drops. This will be followed shortly after with a token generation event (TGE) further down the road for our $GoE token. Our $GoE will be distributed further via a public sale due mid-2022. LBP, or Liquidity Balancing Pools, are also to be used and announced soon.
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