Why ICOs Are Still Relevant in the Era of Decentralized Launchpads

The cryptocurrency space has seen a massive evolution in its approach to fundraising over the past few years. Gone are the days when the Initial Coin Offering (ICO) was the go-to method for launching new projects and raising capital. With the rise of decentralized finance (DeFi), decentralized exchanges (DEXs), and decentralized launchpads (IDOs), many have questioned whether ICOs are still relevant in this new era. While it’s true that IDOs, IEOs (Initial Exchange Offerings), and other decentralized fundraising models have gained significant traction, ICOs remain a vital part of the token launch ecosystem in 2025.

This blog explores why ICOs still hold strategic value in a world increasingly dominated by decentralized launchpads, providing insights into their advantages, where they are still needed, and how projects can make ICOs safer and smarter for investors. Despite the dominance of IDOs and IEOs, ICOs offer unique benefits that can't be ignored, especially for certain types of projects.

Understanding the Evolution: ICOs vs IDOs vs IEOs

Before diving into why ICOs remain relevant, it’s important to understand how these different fundraising models work and what sets them apart. Each of these fundraising methods has emerged in response to the growing demand for secure, efficient, and scalable ways to launch crypto projects.

ICO (Initial Coin Offering)

An ICO is one of the earliest and most basic methods of raising capital in the crypto space. In an ICO, a project sells tokens directly to the public in exchange for cryptocurrency (usually Ethereum or Bitcoin). The project team manages the ICO, which often happens on their website or a third-party platform. ICOs were instrumental in the early growth of blockchain technology and the rise of Ethereum-based projects.

Control and Flexibility: ICOs allow the project team full control over the fundraising process, from tokenomics to pricing.

Access to a Broad Investor Base: ICOs are open to anyone with internet access, meaning projects can raise funds from a global audience without being restricted to specific platforms or regions.

Token Utility: ICOs often launch tokens that will have utility within the project’s ecosystem, giving early investors potential long-term value.

IEO (Initial Exchange Offering)

In contrast to ICOs, IEOs are conducted through centralized exchanges like Binance or Coinbase. In an IEO, the project collaborates with an exchange to host the token sale on their platform. The exchange acts as an intermediary, handling security, investor vetting (KYC/AML), and in some cases, token distribution.

Trust and Security: With IEOs, exchanges vet projects before listing them, which gives investors a sense of security.

Liquidity: Tokens sold through IEOs are often listed on the exchange immediately, giving investors instant liquidity.

Centralized Control: Unlike ICOs, the exchange controls much of the process, reducing the project team’s autonomy.

IDO (Initial DEX Offering)

An IDO is a decentralized version of an IEO. It takes place on decentralized exchanges (DEXs) or launchpads, such as Uniswap, PancakeSwap, or Polkastarter. Unlike ICOs, where the team may have more control over the sale process, IDOs rely on decentralized protocols, allowing anyone with a compatible wallet to participate.

Decentralized Control: IDOs offer transparency and the freedom to bypass centralized platforms.

Lower Costs: DEXs typically charge lower fees than centralized exchanges for listing, making IDOs an attractive option for smaller projects.

Accessibility and Efficiency: IDOs are open to everyone, from seasoned investors to newcomers, offering a more democratic approach to fundraising.

Advantages of ICOs That Still Matter Today

Despite the increasing popularity of IDOs and IEOs, ICOs continue to offer unique benefits that make them relevant in 2025.

Full Ownership & Control

ICOs allow project founders to retain full control over the fundraising process. Unlike IEOs, which are controlled by exchanges, or IDOs, which rely on decentralized protocols, ICOs provide autonomy for the project team to create their own tokenomics, pricing models, and promotional strategies.

This control is particularly valuable for projects that require customized structures for their token distribution, such as customized vesting schedules or lock-up periods, which may not be feasible on an IDO or IEO platform.

Greater Flexibility

ICOs offer more flexibility than both IEOs and IDOs. For example, a project can launch an ICO for a specific duration, and they can adjust the token pricing or hard cap during the fundraising process. This flexibility allows projects to better adapt to market conditions and investor sentiment, which is not always possible with the more rigid frameworks of IEOs or IDOs.

Additionally, ICOs allow project teams to raise funds at different stages—private sales, public sales, and presales—without restrictions imposed by exchanges or DEXs.

Direct Community Engagement

ICOs often have a more direct relationship with the community compared to IEOs and IDOs. In an ICO, the project team can engage directly with their investors, providing them with updates, answering questions, and gathering feedback. This creates a more personal connection between the project team and early supporters.

The community-building aspect of ICOs also helps generate trust, as investors feel they are contributing to a project’s growth and development rather than simply participating in a faceless exchange listing.

Broader Reach (in some cases)

ICOs aren’t limited to a specific exchange or blockchain network. While IDOs and IEOs are often confined to certain platforms (e.g., Ethereum-based IDOs on Uniswap or Binance-based IEOs), ICOs can reach a broader global audience. This is especially important for projects targeting markets where decentralized exchanges or specific exchanges aren’t as prevalent.

When ICOs Work Better Than IDOs

While IDOs and IEOs are excellent fundraising models in many cases, there are still scenarios where ICOs are the better option for a project’s success.

Projects with an Established Brand and Community

For established projects or well-known teams, ICOs can be a more natural fit. These projects already have a strong community that trusts them and their vision, which makes ICOs an excellent way to maintain direct control over the fundraising process while continuing to foster deep relationships with supporters.

Niche Solutions That Don’t Fit Current Launchpad Categories

Some projects, especially those in niche markets or with unique tokenomics, may not be a good fit for an IDO or IEO. ICOs allow for greater flexibility in structuring the sale, making them ideal for projects that need to innovate with their tokenomics, vesting models, or even fundraising terms.

Emerging Markets and Regions

In emerging markets or regions with limited access to decentralized launchpads or exchanges, ICOs can provide a more accessible option for both investors and projects. This is especially true in places with strict regulatory frameworks that limit participation in decentralized platforms.

Addressing the Downsides: Making ICOs Safer and Smarter

ICOs have had a turbulent history, with numerous scams and failures in the early days of crypto fundraising. However, modern ICOs have learned from the mistakes of the past, and today’s ICOs can be made significantly safer and smarter with the right precautions.

Smart Contract-Based Escrow Systems

One of the primary concerns with ICOs has been the risk of fraud. To mitigate this, many ICOs now use smart contracts and escrow systems that ensure funds are only released when certain conditions are met. This increases trust between the project and its investors.

Auditing and KYC Integration

To combat fraud and ensure the legitimacy of the project, ICOs are increasingly integrating Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures. This is an important step in building trust and ensuring that the project complies with regulatory standards.

DAO-Based Community Voting

Decentralized Autonomous Organizations (DAOs) are increasingly being used to provide investors with a say in the project’s future direction. By integrating DAO mechanisms, ICOs allow investors to participate in governance decisions, helping to ensure long-term alignment with the community’s interests.

Hybrid Fundraising Models: The Best of Both Worlds

Some projects are combining the best of ICOs and IDOs in hybrid fundraising models. In a hybrid approach, projects may begin with an ICO to raise private or seed funding from a select group of investors, followed by a public token sale via an IDO. This approach provides the flexibility of ICOs while benefiting from the broad accessibility and liquidity of IDOs.

Hybrid models are especially effective for larger projects that need both community support and institutional backing. By using ICOs and IDOs together, projects can maximize their fundraising potential and create a balanced token launch strategy.

The Role of ICOs in Emerging Economies and Underserved Sectors

In certain regions and sectors, ICOs continue to be an important vehicle for raising capital. For projects targeting emerging markets or underserved sectors, ICOs can offer a more direct and accessible way to raise funds, especially in areas where decentralized launchpads or exchanges are not yet fully established.

ICOs are also a viable solution for tokenizing real-world assets (RWAs) or projects focused on specific business-to-business (B2B) solutions that require customized fundraising terms and regulatory flexibility.

Future Outlook: The Resurgence of ICOs in a Decentralized Age

As the crypto space continues to evolve, ICOs will not disappear entirely. Instead, they are likely to undergo a transformation, becoming more regulated, transparent, and community-driven. The future of ICOs may involve integration with decentralized finance (DeFi), automated auditing systems, and DAO-based governance models, ensuring that projects raise funds in a more secure and efficient manner.

While IDOs and IEOs will continue to dominate in certain sectors, ICOs will remain a valuable tool for projects that need full control over their fundraising process and prefer to engage directly with their community.

Conclusion

Despite the rise of decentralized launchpads and other fundraising models like IEOs and IDOs, ICOs remain highly relevant in today’s crypto ecosystem. By offering greater flexibility, full control, and more direct community engagement, ICOs still provide a strategic advantage for many projects, especially those with established brands, niche solutions, or a need for custom tokenomics. With new tools and best practices in place, ICOs are evolving to become safer and smarter, ensuring their continued relevance in the crypto fundraising landscape. As the crypto world progresses, ICOs will remain an important part of the token launch ecosystem, providing opportunities for growth, innovation, and community-driven success.