With the explosive rise of Initial Coin Offerings (ICOs) in 2017, the crypto world has not been the same. Fundraising is now at the heart of any new crypto project launch. As the regulatory rules have evolved, so have the fundraising methods. From the lesser-trusted ICOs to the central exchange-controlled IEOs and DEX-monitored IDOs, there is a platform for everyone to launch their fundraising campaigns.
Whether you are a resource-limited startup looking to raise some funds, a business in need of fast capital, or a well-established crypto system, you can always rely on crypto community investors and rally them to your cause through multiple fundraising models.
However, the big question remains. Which one? This is where the debate between ICOs, IDOs, and IEOs comes in. Let’s explore all three fundraising models, examining their pros and cons, and determine which one best suits your needs.
ICO vs IDO vs IEO: An Overview
Initial Coin Offerings (ICOs), Initial Decentralized Exchange Offerings (IDEOs), and Initial Exchange Offerings (IEOs) represent three distinct fundraising models in the cryptocurrency world. In an Initial Coin Offering (ICO), also known as the original fundraising model, systems sell their tokens directly to investors through their website or smart contracts. While it offers full control, it poses regulatory risks and security concerns.
In an Initial Exchange Offering (IEO), tokens are offered through centralized exchanges, such as Binance. It offers less control, but investors have more trust in the system. In an Initial DEX Offering (IDO), tokens are offered through decentralized launchpads, such as DAO Maker. It is fast and cheap, but liquidity is variable.
| Criteria | ICO | IEO | IDO |
| Platform | Project’s own website or smart contracts | Centralized Exchange like Binance | Decentralized Launchpad like Polkastarter |
| Control | Full control of the project’s team | Shared control with the exchange | Moderate control via launchpad rules |
| Investor Trust Level | Low | High | Moderate |
| Speed to Market | Fast | Slower due to vetting and listing | Fast and agile with smart contract deployment |
| Liquidity | Delayed and Manual | Immediately after posting on the exchange | Immediate via DEX pairing |
| Fees | Low for setup, high for marketing | High due to exchange cuts | Low but requires liquidity provisioning |
| Marketing & Visibility | Depends on the project’s own effort | Strong due to the platform | Community-driven, varies by launchpad |
| Regulatory Risk | High | Moderate, but depends on exchange rules | Low but varies according to jurisdiction |
| Best For | Independent teams with strong devs & marketing | Projects seeking credibility and a wide reach | DAOs and community-first projects |
What is an ICO (Initial Coin Offering)?
In an Initial Coin Offering (ICO), a system sells its tokens directly to the investors. It is done through their own website or smart contracts, before the tokens are even listed on any exchange.
ICO is the first method of fundraising ever used in the crypto world, and it kick-started the fundraising boom during the 2017 bull run. To start an ICO, a system or project develops its own blockchain-based product and creates a token to power the new ecosystem.
The project’s creators then release a whitepaper to outline the project’s goals and roadmap. This entices investors, and those interested in purchasing the tokens start doing so directly through the system’s website, using cryptocurrencies like ETH or BTC.
The tokens purchased by investors are distributed through smart contracts and become tradable either directly or after some lock-up period.
Pros
- The project team has full control over fundraising, eliminating the need for reliance on third-party exchanges.
- Staring an ICO is cheaper as it doesn’t involve listing fees or commissions.
- Anyone with a crypto wallet can participate in an ICO and purchase the tokens.
- An ICO can be launched immediately without waiting for the exchange’s approval.
- An ICO provides full freedom to design custom vesting schedules and listing models.
- Through an ICO, you can build up a community from the grassroots by earning their trust.
- No censorship or centralized control enables teams to innovate without restrictions.
Cons
- The low barrier to entry can lead to scams and hacks.
- Many investors avoid ICOs due to their past failures and history of scams.
- Many ICOs operate in a legal gray area and may face regulatory scrutiny from authorities such as the SEC.
- The initial costs may be low, but ICOs require significant investment in marketing, as the success of any ICO hinges on it.
- There is no protection for the investors, and they are on their own if something goes wrong.
- Early hype can inflate token prices, leading to a decline and losses for investors.
Best For
- Early-stage teams seeking independence.
- For teams with strong marketing and community-building capabilities.
- ICOs are suitable for projects with global appeal.
- ICOs are best for teams that can program secure smart contracts.
What is an IEO (Initial Exchange Offering)?
In an Initial Exchange Offering (IEO), a crypto system raises capital by selling its tokens on a centralized exchange, such as Binance or KuCoin. To launch an IEO, the system’s creators partner with a centralized exchange to host the token sale.
The exchange then vets the project for its legitimacy and market potential. Once satisfied, the exchange lists the token and promotes it to its users for a listing fee. Investors can buy tokens directly from teh exchange with the help of cryptocurrencies like BTC or USDT.
Pros
- Projects are vetted by exchanges, which adds a layer of legitimacy to the tokens.
- Exchanges are already popular with millions of investors, making it easier to attract them.
- KYC/AML compliance and smart contracts security are handled by the exchanges, reducing technical risks.
- Tokens purchased from an exchange can be traded immediately for instant liquidity.
- Exchanges provide everything from infrastructure to investors, making the IEO process extremely smooth and efficient.
- High-profile investors have a great deal of trust in central exchanges, and they consistently prefer IEOs over ICOs.
Cons
- Central exchanges charge a lot for listing tokens. Their prices can range from tens to hundreds of thousands of dollars.
- Everything from price to timing is dictated by the exchange, reducing the control of project owners.
- IEOs rely on centralized platforms, which is contradictory to the ethos of decentralized systems.
- Exchanges hold the authority to reject any token launch, and their decision can’t be challenged.
- Community involvement is reduced to a minimum due to the exchange’s full control.
Best For
- Crypto systems with a healthy budget to cover listing fees.
- IEO is best suited for systems seeking to enhance their reputation by partnering with a well-established exchange.
- Systems that are looking to increase investors’ trust.
- Systems that don’t want to go through the whole process, including marketing.
- Crypto systems that already meet the compliance standard of the exchange.
What is IDO (Initial DEX Offering)
In an Initial Dex Offering (IDO), a crypto system launches its new token on a Decentralized Exchange (DEX) or a launchpad. While they seem similar, IDOs differ from IEOs in that they offer a decentralized and community-driven model.
To launch an IDO, the creator of a crypto system chooses a DEX, such as DAO Maker. These DEXs do their own vetting and, upon clearance, allow the sale of tokens through smart contracts. Payments are made via cryptocurrencies like ETH or BTC on the smart contracts.
As soon as the sale ends, the tokens are listed on the DEX for trade, allowing for instant liquidity.
Pros
- The barrier to entry is low, as no listing fee is required for an IDO.
- Fundraising is significantly accelerated by smart contracts, enabling the system to access capital instantly and efficiently.
- DEXs have built-in liquidity pools that enable immediate trading of tokens.
- Every transaction is recorded on-chain, ensuring the entire system is transparent and secure.
- IDOs attract early investors who believe in teh vision of the system.
Cons
- IDOs operate outside traditional financial regulations, which may lead to legal actions being taken against both the project and its investors in the future.
- Tokens launched through IDOs often experience significant price fluctuations, resulting in a loss of value.
- As IDOs are permissionless, they can result in rug pulls by fake listings or malicious companies.
- As tokens are launched on a DEX, this results in lower visibility as compared to an IEO.
Best For
- An IDO is best suited for DeFi projects and Web3 startups.
- Teams seeking early liquidity can trade their tokens immediately after launch.
- Projects that are run by communities.
- Startups with limited budgets to operate.
- Projects that prioritize transparency above all else.
How to Choose the Right Fundraising Model for Your Crypto Project
Choosing the right fundraising model for your crypto project is one of the most important and strategic decisions you can make. It is not only about raising capital, but it is also about aligning your project’s vision, budget, risk appetite, and stage with the right audience. Below is a checklist that you must follow to find the best fundraising model for your project.
Define Your Project Stage and Goals
Early-stage projects, from idea to MVP, are the best fit for ICO or IDO fundraising models, as both of these models have no upfront fees, fast GTM, permissionless access to capital, and great token testing utility.
However, for more mature projects that are either launch-ready or require scaling, the IEO fundraising method is the preferred approach. It increases investors’ trust, reduces reputational risk, facilitates regulatory alignment, and helps make the project mainstream.
| Goal | Model |
| Speed and Flexibility | ICO/IDO |
| Credibility and Reliance | IEO |
| Community Engagement | IDO |
| Institutional Access | IEO |
| Bootstraping | ICO |
Assess Your Budget and Resources
Whether you are a startup or an established crypto system, always check your budget and resources before selecting a fundraising method.
While an ICO may seem costless initially, you will need to invest heavily in marketing, including influencer outreach, paid ads, PR campaigns, AMAs, and website & smart contract development.
With IEOs, you can save the promotion fees, but you will need to pay an upfront listing fee to the exchange. These fees can range from $20,000 to $500,000 or more, depending on the exchange’s reputation and the scope of your project.
For an IDO, you must provide initial liquidity and pay gas/platform fees later. Additionally, you will need to pay for the development of smart contracts.
Compliance and Regulatory Considerations
With global regulators tightening their grip on crypto systems in 2025, it is essential to stay informed about compliance and make an informed decision for your fundraising campaign.
ICOs are considered high-risk and are often viewed as unregistered security offerings in many jurisdictions. As there is no investor protection, they may face serious legal charges or fines from the authorities. If you are inclined towards an ICO, consult your legal team first before launching it.
As IEOs are moderately compliant by implementing KYC/AML, they are considered low risk as compared to ICOs. However, they can still be subjected to jurisdictional scrutiny. If you plan to launch an IEO, ensure you partner with an exchange that has a robust compliance framework.
IDOs face the same dilemma as ICOs. They are still considered a financial security risk in most of teh jurisdictions due to their non-compliance and decentralized nature. The same security steps should be taken as when launching an ICO to avoid any legal action against your system.
Speed vs. Credibility Tradeoffs
Before finalizing the fundraising method for your system, make sure what you are willing to sacrifice: speed or credibility?
If you want full control, go for an ICO. However, this can end in your system losing its credibility due to any malicious activity. It may also take up to a month to launch an ICO.
For credibility, opt for an IEO. However, it may take up to 3 months to get verified by an exchange and list your tokens.
IDOs can be launched at the fastest speed. However, they fail to generate trust among investors and lack credibility.
Choose with a Long-Term Strategy in Mind
Starting a fundraiser is not only about raising capital, but it also generates trust among your community and provides a clear vision of your token’s future.
If your token is intended for governance or utility, an IDO is the most suitable approach. If you are looking to attract long-term investors, consider using an IEO.
IDOs result in confirmed exchange listings. Leading to immediate liquidity. The same is true for IEOs, which also offer guaranteed listings, thereby boosting your visibility. For ICOs, you must negotiate to list your tokens on an exchange, a process that can be time-consuming.
If your project’s long-term vision is transparency within your community, opt for ICOs and IDOs. If you are looking for credibility, go with an IEO.
Role of Techtonic Marketing in Token Launches and Fundraising
Techtonic Marketing is a crypto marketing agency that is home to crypto-native professionals who can help you with token launches and fundraising. Whether you are a startup looking for an ICO or an established system looking to expand with an IEO, you can’t go wrong with our PR services.
We are not here for quick campaign wins. We build marketing foundations that compound over months and years, creating sustainable competitive advantages that establish lasting market position.
When you work with Techtonic, you are not just getting marketing services for your token launches and fundraising. You will gain a strategic partner dedicated to helping you become a recognized leader in your space through authentic authority building and inbound excellence.
If you’re ready to build a marketing strategy that delivers real growth, schedule a free consultation with our experts today to learn how the Techtonic Marketing team will help you succeed in achieving your growth targets.
Frequently Asked Questions
Which fundraising model is safest for investors?
IEO is considered the safest fundraising model for investors, as a centralized exchange with KYC/AML implementation handles it.
Which is the cheapest fundraising method — ICO, IEO, or IDO?
ICO is the cheapest fundraising model that only requires smart contract and website development costs, alongside marketing.
Are ICOs still relevant today?
ICOs are making a slow but steady comeback in 2025 due to the introduction of new regulatory laws like MiCA.
Do IDOs require KYC/AML?
Not always. However, with the evolution of rules and stricter regulations, many DEX platforms and launchpads have made KYC/AML compulsory.
Which model is best for fast fundraising?
IDO, as it doesn’t require any centralized approval and provides instant liquidity after launch by allowing users to trade tokens.
Which fundraising model is best for long-term credibility?
IEO, as it follows regulatory requirements like KYC/AML, and generates investors’ trust by launching the coins on reputable exchanges like Binance.
