ICO vs IDO: What is the difference and why does it matter?

If you are new to cryptocurrencies, you have probably heard the terms ICO and IDO without knowing exactly what they mean or how they work. Here we explain it to you without technical jargon.

ICO: The old way of raising funds

An ICO (Initial Coin Offering) is basically the crypto equivalent of an IPO (. A new project launches tokens and sells them to investors to raise funds.

The problem: With little regulation, anyone can launch an ICO. Result? Many scams. The project takes your money, promises to develop something, and disappears. Easy. That's why many investors lost confidence in ICOs after 2017.

How it works:

• Fixed or dynamic price according to demand
• Token supply can be fixed or variable
• Subsequent listing on centralized exchanges
• High risk of fraud

IDO: The decentralized solution

An IDO )Initial DEX Offering( is what came next. Instead of trusting a project, we trust a decentralized protocol )DEX(.

The advantages:

• Instant liquidity: you can sell your tokens immediately after buying
• Greater security: smart contracts manage everything automatically
• Less trust required: does not rely on promises from the team
• Immediate listing: don't wait months, direct access to DEX
• Verified projects: IDO platforms have screening standards.

Quick Comparison

Conclusion

The IDO is not perfect, but it is a step forward. Decentralization and project verification make it safer than the wild ICOs of 2017. If you have to choose between the two today, IDO is the less risky option.