What are ICO, IDO, and ICM in crypto?

Fundraising has always been a critical part of any crypto project's lifecycle. But in this market, the way projects raise capital has never stayed the same. It changes with infrastructure, with user behavior, and with the lessons the market has had to pay for across each cycle. ICO was the first model to take token-based fundraising beyond the small circles of technical communities. A project only needed a whitepaper, a roadmap, and a compelling enough narrative to raise capital from a global community.

IDO came later, as DeFi matured and token distribution began shifting to smart contracts, DEXs, and launchpads. ICM is the newest step, where an idea on social media can be tokenized and traded almost instantly. These three models are not simply upgraded versions of one another. They reflect three different stages of the crypto market, each with distinct approaches to capital distribution, levels of control, and risk structures.

In this article, we explore the strengths and weaknesses of each model, as well as how they have shaped the broader crypto market.

ICO and the era of fundraising by conviction

ICO (Initial Coin Offering) is a form of community-based fundraising using crypto for early-stage projects. It emerged during a period when crypto had no established infrastructure for launching and trading tokens, so projects had to raise capital directly from early participants. The mechanism was fairly direct, with very few initial products required from the project side. Projects published a whitepaper, tokenomics, a roadmap, and team information, then opened token sales to early participants. Buyers sent BTC, ETH, stablecoins, or fiat currency, then received tokens either immediately or according to a vesting schedule. Most of this process took place on the project's own website, with very few layers of oversight in between.

That is why ICOs boomed between 2017 and 2018. A project did not need to go through banks, venture funds, or traditional stock exchanges and could still raise millions of dollars within days or weeks. For crypto and blockchain as a whole, this was a massive unlock in terms of capital access. Ethereum is the most prominent example and arguably the most successful project to pioneer the ICO movement.

• From July to September 2014, Ethereum sold over 60M ETH at an average price of approximately $0.31 per token, raising around $18.3M in Bitcoin.

• At that time, it was one of the largest community fundraising events on the internet, and the capital funded the entire development of the Ethereum network until its official launch in July 2015.

However, the speed and openness of ICOs also created significant downsides. Many projects during this period had no real product, no revenue, and sometimes nothing more than a whitepaper and promises about the future. Token buyers were essentially betting on the team, the narrative, and the expectation that the token would rise in price after listing.

EOS (now Vaulta) project is one of the clearest examples of how a record-breaking ICO can fail to create a sustainable ecosystem, standing in stark contrast to Ethereum's success.

• Block.one raised approximately $4.1B through an ICO that ran from June 2017 to June 2018, making it the largest ICO in crypto history. But after fundraising, Block.one did not reinvest the majority of the proceeds into the EOS ecosystem and instead redirected resources toward other ventures such as the Bullish exchange.

• The SEC later fined Block.one $24M for conducting an unregistered ICO, a penalty equivalent to roughly 0.6% of the total amount raised.

The EOS story revealed the core weakness of the ICO model. Without any mechanism to hold projects accountable for how they use the funds raised, token buyers had virtually no practical tools to enforce commitments. The SEC also concluded that if buyers primarily purchase tokens expecting the development team to build a product and drive up the token's value, those tokens may be classified as securities and must be registered under federal law. From this point, the market began to understand that open fundraising does not equal transparent fundraising or project success. It was the combination of legal risk, information risk, and execution risk that pushed crypto toward token distribution models with clearer structure.

IDO and the shift to DeFi

As IDO (Initial DEX Offering) began emerging as DeFi matured from 2020 onward, the way projects issued tokens also started to change. Instead of selling tokens through a proprietary website like ICOs, projects could launch sales through DEXs or launchpads, where smart contracts controlled the sale, allocation, and liquidity creation.

IDOs gained popularity because they created value for both projects and participants:

• For projects: They provided an efficient way to raise capital, build an early community, validate market demand, and establish initial liquidity without the costs associated with centralized exchange listings.

• For users: They offered early access to token sales before broader market exposure, creating opportunities to participate at an earlier stage of a project's development.

The process typically began with whitelist spots that the project set up ahead of the campaign launch. Users registered, completed launchpad requirements, and in many cases had to stake the platform's native token to receive an allocation. After the sale concluded, tokens were claimed and began trading on a DEX. The moment the token was officially created and distributed, commonly referred to as TGE, was the most sensitive phase because prices could swing sharply as soon as the liquidity pool opened. IDOs also typically featured multiple pools, such as community pools and pools reserved for holders of the platform's native token, with accepted payment assets varying by launchpad.

That said, IDOs were not a guaranteed win for participants either. Whitelists were often highly competitive, and participants faced risk from both the IDO token and the platform token. For example, the Tidal Finance IDO on Polkastarter only whitelisted 250 addresses with a maximum allocation of $400 per person, while the number of registrations exceeded the available spots by more than 500 times.

These limitations pushed launchpads to evolve far beyond their original role. From simply hosting token sales, launchpads gradually became part of the capital distribution infrastructure in crypto, supporting KYC, vesting, marketing, community building, and post-listing liquidity creation. The questions participants asked also matured, shifting from "how many multiples can this project do after listing" to whether the launchpad vetted projects thoroughly enough, whether allocations were fair for smaller users, and whether the project would continue receiving support after TGE. Some newer launchpads even experimented with mechanisms beyond fixed-price token sales. Fjord Foundry, for instance, uses a Liquidity Bootstrapping Pool where prices adjust dynamically based on supply and demand, reducing the advantage of groups buying too early or with oversized capital.

ICM and the speed of the Internet

If ICOs required a whitepaper and a fundraising campaign, and IDOs required a launchpad and a whitelist, then ICM (Internet Capital Market) compresses the process of turning an idea into a publicly tradable token into a few simple steps. ICM is a model that allows an idea, product, or service planned for future deployment to be tokenized and funded by the community. Participants do not necessarily buy tokens based on financial metrics or a finished product. They buy based on conviction in the idea, the builder, and the level of attention the community gives to the project.

Believe.app is a notable example. A builder posts on X with a ticker and token name. The platform's bot automatically creates the token on Solana, and the token then trades via a bonding curve before transitioning to a broader liquidity pool once it reaches a certain threshold.

The bonding curve is the core mechanism that makes this model work. Instead of using an order book or a market maker, a smart contract uses a predefined formula to calculate the price based on the token’s circulating supply. When someone buys the token, more tokens enter circulation and the price moves higher along the curve. When someone sells, tokens are removed from circulation and the price moves lower. The smart contract handles both transactions automatically, so a buyer does not need to wait for a seller, or vice versa. This allows the token to trade continuously during the bonding-curve phase, with the price changing automatically as supply moves up or down.

Pump.fun on Solana demonstrates how a bonding curve operates in practice. Anyone can create a token with roughly 0.02 SOL, with no presale, no team allocation, and no vesting schedule. The token starts at a very low price on the bonding curve, rises gradually as buyers enter, and once it reaches a certain threshold, liquidity automatically migrates to an AMM pool on a DEX for standard market-driven trading. However, making token launches almost frictionless also created a new problem. The number of tokens entering the market has grown so quickly that many of them are now competing for the same pool of attention and liquidity. This trend was already visible during the memecoin boom, well before the term ICM became widely used. Pump.fun alone has seen more than 22.4 million tokens created, showing how quickly token supply can grow when anyone can launch an asset at a very low cost.

According to CryptoRank, total memecoin market capitalization peaked at $135.06 billion in November 2024. By June 15, 2026, it had fallen to $24.48 billion, an 81.9% decline from its all-time high. This mechanism creates a substantial advantage for buyers in the first few seconds but pushes risk onto everyone who enters later. A token can surge rapidly when attention spikes, then drop sharply when that attention shifts to another token. With ICM, speed is both the greatest appeal and the greatest source of risk.

Why ICO, IDO, and ICM keep generating hype

From the outside, the appeal of ICOs, IDOs, and ICMs might seem rooted in their openness, decentralization, or accessibility. But in practice, what truly turned each of these models into a phenomenon was not philosophy or technology. It was the explosive price growth that early participants could achieve.

• Ethereum’s ICO sold ETH at roughly $0.31 in 2014. Based on CoinGecko’s ATH of $4,946.05, early ICO buyers saw a peak return of about 15,955x.

• When IDOs arrived, the same story repeated in a different format. Bloktopia, launched through Seedify, reached an ATH ROI of 558x against its IDO price.

• With ICM, the cycle moved even faster. Believe.app's LAUNCHCOIN surged nearly 5,000% in a single week in May 2025, with its market cap increasing tenfold in just three days, from roughly $30M to $319M.

Rather than whitepapers or long-term roadmaps, the prospect of strong early returns was the primary factor driving adoption across successive fundraising models. Although each new token issuance mechanism introduced different infrastructure and distribution methods, the underlying economic incentives remained largely unchanged. Early participants generally benefited from lower entry valuations, while later entrants faced higher prices and greater downside risk. As a result, market attention was often driven more by expectations of future returns than by the long-term fundamentals of individual projects.

Although the fundraising mechanisms have evolved over time, the core incentive structure has remained remarkably consistent. ICOs, IDOs, and ICMs all allocate value based on when participants enter the market. Differences in technology and distribution models have changed how tokens are issued, but they have not fundamentally changed the importance of timing in determining potential returns and investment risk.

ICO and IDO remain fundraising models with relatively clear structure, including defined sale periods, prices, token allocations, claim schedules, and participation conditions. ICM is more open, faster, and far more dependent on the internet's ability to amplify attention.

It sits at the intersection of several trends at once. The open spirit of ICOs, the deployment speed of meme coins, the on-chain nature of DeFi, and the attention distribution power of SocialFi. A small idea can be priced by the market instantly if it attracts enough community interest. Small investors can participate very early in a project that is not yet large enough to raise VC funding. Builders also gain an additional channel to raise capital and test market demand without going through traditional intermediaries.

But because tokens can be created before any product exists, prices tend to depend heavily on attention, narrative, and speculative capital flows. This is the biggest difference compared to the two earlier models. ICO and IDO typically start from a fundraising plan. ICM typically starts from attention. When attention shifts, a token can lose liquidity and decline in price very quickly.

Conclusion

ICO, IDO, and ICM are not merely different names for the same fundraising mechanism. They reflect how the crypto market continuously experiments with and restructures the relationship between projects, capital, and participants. A defining characteristic shared by all three models is their ability to provide retail participants with early access to investment opportunities, a privilege that is rarely available in traditional financial markets. However, early access alone does not guarantee an advantage. The real opportunity depends on factors such as the token distribution model, valuation at each funding stage, vesting and unlock schedules, and, ultimately, whether the project is capable of generating sustainable value after the Token Generation Event (TGE). Regardless of the fundraising model a project adopts, long-term investment outcomes are determined far more by the strength of the project's fundamentals and the capabilities of its team than by short-term narratives or temporary market attention.