What Is a Token Sale?
A token sale is a process of creating tokens on the blockchain and selling them to investors. The money raised is then used to design and release a product. In return, the investors get access to the service or may even receive a share in profits. Token sales are also referred to as initial coin offering (ICO), token crowd sales, or security token offering (STO).
A Deeper Look at This Term
Blockchain technology has provided what many consider to be a better and more efficient way to raise funds to support projects than traditional angel investments. A startup or even an individual can now create tokens on the blockchain and sell them to investors to fund their projects.
All this can be done without project owners losing ownership of their product or company. Investors can use the tokens to access premium services or sell the tokens to others who may need them to access the services.
Some of the projects that were funded through token sales include Ethereum, EOS, and Cardano. For example, to run an application on the Ethereum blockchain today, you need gas, which you can only buy using Ether, which is a token that they sold in their July 2014 token sale.
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