The ICO boom of 2017–2018 was nothing short of historic, raising over $50 billion and briefly turning crypto fundraising into a global spectacle. But the hype didn’t last. By 2020, the model had run its course over 90% of ICOs traded below their launch price within six months, regulatory agencies clamped down, and investor trust plummeted. Major economies like China and India restricted ICO activity, while scams like Bitconnect drained billions in user funds. As a result, the once-popular ICO became a cautionary tale, forcing the Web3 ecosystem to rethink how it finances innovation.
Today, the crypto fundraising landscape is evolving fast and for the better. Newer models like IDOs, IEOs, STOs, INOs, and DAO-funded community rounds are replacing the old “raise first, build later” mentality. These formats prioritize regulatory compliance, transparency, and long-term user alignment. They offer better protections for investors and more credibility for projects. In this guide, we’ll explore what’s driving this shift, break down the top alternative fundraising models, and highlight real-world success stories that define the next wave of crypto capital raising.
The 2025 Fundraising Landscape: Where ICOs Stand Today
Let’s be real ICOs aren’t dead, but they’ve definitely been dethroned. As of 2025, Initial Coin Offerings account for less than 20% of all token fundraising activity, a steep drop from their heyday in 2017. Back then, projects raised millions in minutes with little more than a whitepaper and a flashy landing page. Today? That just won’t cut it. The average ICO now takes around 54 days to close and raises about $14.7 million respectable, but nowhere near the highs of the past.
So, what changed? Two things: regulation and reputation. Regulatory bodies like the SEC, MAS, and ESMA have cracked down on token sales, demanding clearer frameworks and investor protections. At the same time, investors have become a lot more cautious. They’re no longer chasing hype they’re asking tough questions, doing due diligence, and expecting real utility. In short, the freewheeling ICO era gave way to a more measured, compliance-conscious environment. It’s a shift that’s forcing startups to explore smarter, safer ways to launch their tokens and that’s where next-gen models come in.
IDOs: The Reign of Decentralized Launches
Initial DEX Offerings (IDOs) have quickly become the go-to method for crypto fundraising in 2025 and they’re showing no signs of slowing down. Currently, IDOs make up nearly two-thirds of all new token launches, outpacing ICOs and IEOs by a wide margin. This explosive growth is largely thanks to how accessible, fast, and community-driven the model is. Instead of relying on centralized entities or complex manual setups, IDOs use decentralized exchange launchpads like Polkastarter, BSCPad, DAO Maker, and more to automate everything from token sale to liquidity provisioning.
Here’s a closer look at why IDOs have taken over:
Instant liquidity for newly launched tokens
Unlike ICOs that often delayed listings, IDOs ensure that tokens are live and tradable immediately after the sale ends. By launching directly on a DEX, projects unlock early trading volume and price discovery without waiting on centralized exchange approval.
Community-first exposure
One of the biggest wins for IDOs is how they empower users. Launchpads typically require participants to stake native tokens, join whitelists, or engage with the community creating more organic hype and less speculation from bots and pump groups. It’s not just about raising funds; it’s about building loyalty from day one.
Transparent pricing mechanisms
Most IDOs use bonding curves or AMM-based pools, letting market dynamics dictate token pricing. This approach reduces manipulation and provides a more accurate reflection of demand than fixed-price ICOs ever could.
Smart contract risks
Because IDOs are fully on-chain, a single overlooked vulnerability in the smart contract can result in massive losses. Rug pulls, flawed logic, or unaudited code remain serious threats. That’s why audits and security reviews are now non-negotiable for any credible launch.
Short-term volatility
Tokens launched via IDOs are subject to extreme price swings. Without enforced vesting, early contributors can dump tokens the moment trading opens, leaving retail buyers exposed to high-risk fluctuations.
IEOs: Bringing Compliance to Centralized Platforms
While IDOs dominate the decentralized end of the fundraising spectrum, Initial Exchange Offerings (IEOs) continue to play a crucial role for teams looking to blend trust, structure, and broad exposure. As of 2025, IEOs account for approximately 15–16% of all token sales, offering a more controlled yet scalable alternative to the free-for-all nature of ICOs or the technical complexities of IDOs.
So, what sets IEOs apart? The real game-changer is third-party validation. Instead of launching independently, projects partner with centralized exchanges like Binance Launchpad, OKX Jumpstart, or KuCoin Spotlight, which act as gatekeepers. These platforms don’t just list any token hey vet the project, assess its team and technology, and enforce strict KYC/AML standards. This additional layer of scrutiny boosts investor trust, especially in an industry still recovering from past scams and failures.
Trust through vetting and accountability
When an exchange puts its brand behind a project, it signals to users that the fundamentals are sound or at least have passed a minimum bar. That kind of endorsement makes it easier for retail and institutional investors to participate without second-guessing everything.
Exposure to a global user base
Centralized exchanges already have millions of active users. By leveraging this audience, IEOs can provide startups with instant visibility and built-in demand. There’s no need to build traction from scratch your listing is pushed directly to a market that’s already engaged and ready to trade.
Compliance baked in
Let’s be honest: regulators are watching closely. IEOs remove a major headache by handling identity verification, anti-money laundering protocols, and legal screening. That makes them particularly appealing in regions with tighter securities laws, like the U.S., EU, or Singapore.
STOs: Merging Blockchain Potential with Regulatory Integrity
If there’s one fundraising model that bridges the gap between crypto innovation and traditional finance, it’s the Security Token Offering (STO). Unlike ICOs or IDOs that offer utility tokens, STOs involve tokenized securities assets that represent real economic rights like equity, debt, profit-sharing, or ownership in tangible things like real estate. The major difference? STOs are fully compliant with securities regulations from day one.
For projects targeting serious capital and institutional backing, STOs are a no-brainer. They offer the power of blockchain transparency, automation, faster settlements without dodging legal frameworks. Investors know what they’re buying, how returns are structured, and what legal protections exist. It’s not about hype or speculation it’s about clear value and real-world use.
Real assets meet digital efficiency
STOs are ideal for tokenizing traditional asset classes think real estate, venture capital funds, government bonds, or private equity shares. Instead of waiting months for paperwork and clearinghouses, these tokens settle in minutes, track ownership automatically, and reduce operational friction.
Full regulatory compliance
Whether you’re launching in the U.S. under Reg D/Reg S, operating under MiFID II in the EU, or filing with MAS in Singapore, STOs are built to fit within the law. That means clear investor rights, disclosures, and accountability, making them far more appealing to institutions and high-net-worth individuals.
Rising adoption in regulated markets
We’re seeing strong STO momentum in jurisdictions that prioritize financial innovation and compliance. Platforms like INX, Securitize, and Tokeny are leading the charge, offering regulated token issuance frameworks in the U.S., EU, and Singapore. In fact, the U.S. recently cleared secondary trading of security tokens an important step toward mainstream acceptance.
Emergent Models: INOs, ISPOs & Community‑Centric Fundraising
As the crypto world evolves, we’re seeing new fundraising models pop up that don’t just raise capital they build ecosystems from day one. These emergent formats, like Initial NFT Offerings (INOs), Initial Stake-Pool Offerings (ISPOs), and community-first protocols backed by DAO grants, are gaining serious traction. They’re not just alternatives to ICOs they’re rewiring the playbook entirely.
INOs: Crowdfunding meets NFTs
Initial NFT Offerings (INOs) are all about giving tokens real utility from the start. Instead of selling a generic coin, projects sell NFTs that come with rights, services, or perks like access to early features, community voting power, or in-game assets. These NFTs are often limited-edition and tradable, giving holders both a stake in the project and a potentially valuable asset.
INOs also serve as proof-of-community. When users mint and hold NFTs tied to your brand or platform, they’re not just speculators they’re early believers who help shape the narrative. For projects in DeFi, gaming, and creator economies, this model offers flexibility, built-in loyalty, and new ways to monetize participation.
ISPOs: Stake-to-support without spending a cent
Pioneered by Cardano, the Initial Stake-Pool Offering (ISPO) flips the script. Instead of investing their own money, users delegate their tokens (like ADA) to a project’s stake pool, and in return, they receive that project’s new token. No capital leaves their wallet. No need to swap or sell.
This model raised over 600 million ADA (valued around $1B) during the 2021 ISPO wave, showing that users are more than willing to stake their support literally if the model is fair and the vision is clear. It’s a lower-risk, higher-trust method of bootstrapping decentralized ecosystems.
Community-first fundraising via DAOs and grants
Here’s where things get truly Web3. Many newer projects skip traditional funding entirely and instead rely on DAO treasury grants, social tokens, or retroactive funding rounds. These models reward contributors not for hype, but for value delivered whether that’s code, content, or community engagement.
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Tokenomics and Launch Strategy: A Blueprint for Smart Fundraising
Let’s face it raising funds in crypto today takes more than just a cool concept and a flashy pitch deck. You need a token model that actually works. In 2025, investors, users, and even regulators are looking under the hood, asking: Does this token have real utility? Is the value sustainable? That’s why a strong fundraising campaign starts with well-structured tokenomics and a launch strategy designed for long-term success.
Design incentives that build not break your ecosystem
Tokenomics isn’t about slapping on a supply number and calling it a day. It’s about crafting mechanisms that reward loyalty, discourage manipulation, and support project growth. Here’s what matters most:
- Vesting periods for founders, team members, and private investors to prevent early exits and build long-term alignment
- Bonding curves or dynamic pricing models that adjust based on real-time demand, helping you avoid price shocks at launch
- Anti-whale constraints like purchase caps or tiered access to ensure broader token distribution and community participation
When users know the system is fair and transparent, they’re more likely to stick around, contribute, and evangelize the project.
Balance fundraising goals with liquidity and community trust
You can raise millions, but if your token tanks post-launch, you’ve lost the trust battle. That’s why successful launches balance how much is raised, when tokens are unlocked, and where liquidity is available. This includes:
- Setting aside liquidity pools and locking them for a set period
- Implementing cliff periods and gradual token unlocks
- Building utility that drives ongoing demand like staking, governance, or rewards
Pick a launch strategy that fits your stage-not your ego
Too many projects try to jump into an IDO or STO just because it’s trendy. But launch models aren’t one-size-fits-all. Instead, match your go-to-market with your project’s current stage and audience:
- Pre-product or community-heavy? Start with a community sale, airdrop, or INO to build buzz and reward early adopters.
- Live MVP or traction underway? Consider an IEO with a reputable exchange that handles compliance and marketing.
- Targeting institutions or real-world assets? Go the STO route it’s slower but investor-trusted and legally sound.
Launching smart means playing the long game. Your strategy should reflect not just where your project is today, but where it’s going and who it’s meant to serve. When your tokenomics and launch flow are airtight, they don’t just support your raise they supercharge your brand, credibility, and future growth.
Smart Risk Management: Audits, Compliance & Market Integrity
If there’s one thing that can make or break your fundraising campaign, it’s trust. In today’s crypto market, trust doesn’t just come from hype or a slick website it’s earned through rigorous risk management. Whether you’re running an IDO, INO, IEO, or STO, your project needs to show that it’s secure, compliant, and fair. Otherwise, you risk losing your investors before you even start.
Smart-contract audits aren’t optional they’re the baseline
In decentralized fundraising models like IDOs and INOs, the smart contract is your engine. If it fails, the entire vehicle crashes. That’s why thorough audits from credible firms like CertiK, Quantstamp, or SlowMist are essential. These audits catch vulnerabilities like reentrancy bugs, incorrect logic, or backdoors issues that could lead to stolen funds or complete project collapse.
Investors today are more cautious than ever. A well-audited contract doesn’t just reduce technical risk it boosts credibility, signals professionalism, and helps prevent rug pulls and exploits that have become all too common.
Compliance builds investor confidence
Launching an IEO or STO? Then KYC (Know Your Customer) and AML (Anti-Money Laundering) checks aren’t just boxes to tick they’re trust-building tools. Exchanges and STO platforms typically enforce these checks to comply with regulations in key markets like the U.S., EU, and Singapore.
While some early crypto users viewed KYC as a hassle, today’s investors see it as a green flag. It shows you’re not cutting corners. It also opens doors to broader investor bases, including institutions and regulated funds, who won’t touch projects that ignore legal basics.
Anti-manipulation tactics protect your community
Nothing turns off a community faster than watching whales scoop up tokens in a private round, dump them post-launch, and vanish. To prevent this, smart projects are implementing:
- Whitelists that prioritize loyal supporters or verified users
- Fair launch mechanisms where all participants have equal access
- Gini-indexed allotments to reduce concentration and promote healthy distribution
These tools help keep your launch fair, transparent, and community-aligned. And let’s be honest if your distribution looks rigged, your token’s price action will reflect it.
Real-World Fundraising Case Studies
Nothing validates a fundraising model like real traction. The past few years have shown us that next-gen token launches aren’t just theory they’re working in the wild. Let’s look at a few standout examples that prove how powerful these newer models can be when executed well.
Cardano ISPO: Stake-to-Earn Done Right
Cardano’s Initial Stake-Pool Offering (ISPO) model turned heads in 2021, and its success still echoes across the ecosystem. Over 35,000 participants delegated more than 600 million ADA valued at nearly $1 billion to support early-stage projects. Instead of spending capital directly, users simply redirected their staking rewards to the project and received native tokens in return.
This approach not only avoided upfront investment risks but also built community buy-in from the start. It’s now considered a blueprint for low-friction, high-engagement fundraising especially for proof-of-stake chains.
Carbon Browser IDO: Overachieving on Day One
When Carbon Browser went live with its IDO, expectations were high but reality exceeded them. The project set a fundraising goal of $600,000 and ended up raising $1.6 million within 24 hours. Hosted on a decentralized launchpad, the sale brought in active contributors, not just passive speculators.
What made it work? A strong community, clear product roadmap, and smart tokenomics. This was a textbook case of how IDOs can deliver fast, community-powered capital with minimal gatekeeping.
tZERO STO: Regulated Capital at Scale
For a more institutional example, look at tZERO, a pioneer in the Security Token Offering (STO) space. The project raised $134 million through a fully compliant, regulated sale one of the largest STOs to date. By tokenizing equity and offering real investor protections, tZERO appealed to traditional investors looking to get into blockchain without touching unregulated assets.
This wasn’t just a raise it was a signal that compliance-first models can scale and draw serious capital, even in a market dominated by volatility.
Choosing the Right Launch Path: Decision Matrix
So, you’re planning a token launch. Great but how do you know whether to go the IDO route, pitch an IEO, or build a security token? The truth is, there’s no one-size-fits-all approach. You need to match your fundraising strategy to your project’s current maturity, audience, and long-term goals.
Match your project stage to the right model
If you’re early-stage with a growing community and minimal regulatory pressure, an IDO or INO is usually the most flexible and fast-moving option. But if your product is further along and you’re targeting institutional partners or regulated jurisdictions, an STO is your best bet for raising compliant capital.
Define your audience and compliance threshold
Who are you raising from? If it’s retail users, you’ll need strong community incentives and user-friendly access. If you’re pitching to accredited investors or funds, then legal compliance, KYC/AML, and a professional pitch deck are table stakes.
Ask yourself: Do I want speed and decentralization or structure and regulatory safety? Your answer will lead you to the right model.
Consider your operational readiness
Do you have smart contracts that have been audited? Do you have a working product, working tokenomics, and legal clarity on your token’s classification? Can you partner with a launchpad or exchange that provides distribution, exposure, and security?
These details matter more than buzz. Choose your launch method based on what your project can support today and where it wants to go tomorrow. Launching a token isn’t just a milestone; it’s the start of a public relationship with your users, backers, and regulators. Start smart.
What’s Next in Crypto Fundraising
Crypto fundraising isn’t standing still it’s evolving fast. With ICOs largely in the rearview, the future lies in hybrid models, asset-backed tokens, and smarter regulations. Projects aren’t choosing between compliance and community anymore they’re blending both to create scalable, secure, and inclusive funding paths.
Hybrid models are gaining ground
Why pick one model when you can take the best parts of several? We’re seeing more projects combine STO foundations with IDO-style launches, giving them the legal clarity institutions need and the community access that drives early adoption. It’s like launching with two engines one for regulatory lift, the other for grassroots speed.
These hybrid approaches allow teams to segment offerings: private rounds under securities law for accredited investors, and public sales through launchpads for retail participants. The result? Broader participation, less risk, and funding that scales across jurisdictions.
Real-world assets are coming on-chain
Tokenization is no longer just a DeFi buzzword it’s becoming a serious funding mechanism. Projects are tokenizing real estate, fine art, IP royalties, and even carbon credits to unlock fractional ownership and liquidity in markets that were once closed off.
This isn’t just theoretical. Platforms like Ondo Finance, Backed, and Matrixdock are already tokenizing U.S. Treasuries, and others are following suit with luxury assets and real-world cash flow. The benefits? Greater transparency, 24/7 liquidity, and access for global investors who never had a seat at the table.
Institutions are stepping in with regulators not far behind
The tide is turning. Institutional capital is flowing into the crypto space again, but this time it’s more cautious, more compliant, and more informed. That’s forcing projects to raise the bar on governance, auditing, and legal structure a good thing for long-term legitimacy.
At the same time, regulatory clarity is improving. The EU’s MiCA framework, Singapore’s MAS regulations, and even evolving U.S. positions are giving teams a better blueprint for launching without guessing the rules. It’s paving the way for smarter innovation that doesn’t fly under the radar but works within it.
Conclusion
As the crypto space matures, fundraising is no longer about chasing hype it’s about building trust, delivering real value, and aligning with both users and regulators. From IDOs and STOs to NFT-backed models and community-driven grants, projects now have a diverse toolbox to raise capital in ways that are transparent, secure, and scalable. The era beyond ICOs is already here, and it’s defined by flexibility, compliance, and ecosystem-first thinking. If you’re ready to launch your token with the right strategy and infrastructure, Blockchain App Factory provides end-to-end token development services tailored to your goals across any model, on any chain.
