Understanding Difference – IPO Vs ICO Vs STO Vs IEO


Inviting investors to invest requires preparing products that they can use for putting money into and getting returns from. The conventional trading mostly constitutes of trading of shares, commodities, currencies and exchange. With smart contracts in action, the trading framework of blockchain trading has also enriched. IPO, ICO, IEP and STO are some of the offerings that are designed to make the trading an available solution for all kinds of investors and fundraisers. Let’s understand the difference among these.


  • IPO


IPO is an announcement made by the companies for inviting the investors to buy a small ownership in the company by buying its shares. The companies decide the price band and the lot size and then collect bids from investors regarding the investment.


  • ICO


ICO was one of the first trading products that appeared in Bitcoin News. In ICOs, the different-sized lots of coins are put on sale for investors. Through this product, the companies are only selling utility tokens which grow in value in accordance with the growth of business idea. The companies are not offering ownership of the company by giving ICOs.


  • IEO


IEO, unlike ICO, is operated directly by cryptocurrency exchanges. A start-up is the beneficiary of the amount raised by IEO through newly issued tokens.  Only the members of a specific exchange can participate in IEO and buy the tokens. Whereas, ICO is practically open to all.


  • STO


STO is a funding model for those companies whose revenue earnings are somewhat assured and have a considerable value. While ICO represents no value, but a probability of earning in future, STO has some value equal to that of value of assets underlying. 

So, all these offerings are common in the sense that these offer some way of raising funds. These differ on the points such as ownership of asset, underlying value, type of participants and so on, according to the details mentioned in Bitcoin News.