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BFM Times > Crypto > Crypto Currency > ICO vs IDO: Presale Differences Explained
CryptoCrypto Currency

ICO vs IDO: Presale Differences Explained

Santosh Kumar
Last updated: February 27, 2026 5:32 am
Santosh Kumar
Published: February 27, 2026
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The crypto world is full of new fundraising models. We see two of the most popular options, called ICO vs IDO. It can feel confusing for new users in crypto. This knowledge matters a lot for smart decisions. They help you make better investment choices. These models also explain how token launches work. 

Contents
  • What Is an ICO and How Does an Initial Coin Offering Work?
    • How Does an Initial Coin Offering Work?
  • How Does an IDO Work?
  • What Are the Key Differences Between ICO vs IDO?
  • What Is the Difference Between Crypto Presale vs ICO?
  • How Do ICO vs IDO vs Presale Compare in the Full Picture?
  • Which Token Launch Type Should You Choose, ICO vs IDO?
  • How Can You Participate in an ICO vs IDO?
    • Joining an ICO
    • Joining an IDO
  • Which Is Better for Investors in 2025: ICO vs IDO?
  • What Is the Role of Launchpads in IDOs?
  • Frequently Asked Questions
    • What is the difference between ICO and presale?
    • What is the difference between ICO vs IDO?
    • What is the difference between IDO and presale?
  • Conclusion

In this article, readers will gain insights into the ICO vs IDO: Presale Differences Explained featured on BFM Times

What Is an ICO and How Does an Initial Coin Offering Work?

The term ICO stands for Initial Coin Offering. It is one of the oldest token launch types in crypto. This model became very popular between 2017 and 2018. The projects used ICOs to raise funds from the public directly. They asked investors to send crypto, usually Bitcoin or Ethereum, to the project. It gave new tokens at a fixed price in return.

How Does an Initial Coin Offering Work?

The process is simple to understand. We can explain it step by step in clear words. It starts with a project creating a whitepaper that explains the idea & team & token details. This document sets the fundraising goal & token price clearly. They then send funds to a smart contract or wallet provided by the project. The tokens are distributed after the sale ends.

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The ICO market had very little regulation. We saw innovation & fraud grow at the same time. It caused many ICO projects to disappear after raising funds. They lost billions of dollars in scams. This situation pushed regulators in many countries to take action against ICOs.

What Is an IDO and What Does IDO Mean in Crypto?

The term IDO stands for Initial DEX Offering. It is a newer model compared to ICO. This IDO meaning in crypto refers to a token launch done directly on a decentralized exchange DEX. They use popular platforms for IDOs such as Uniswap, PancakeSwap & Raydium.

How Does an IDO Work?

The IDO process is more automated & clear to the public. It allows projects to list tokens directly on a DEX. They create liquidity pools to support trading from the start. We can buy tokens directly from the pool. The tokens are often available instantly after purchase.

The IDOs are faster & more open to everyone. We do not need a central authority to manage the sale. It makes them popular in the DeFi decentralized finance space.

What Are the Key Differences Between ICO vs IDO?

The quick comparison table below explains ICO vs IDO clearly.

FeatureICO Initial Coin OfferingIDO Initial DEX Offering
PlatformCentralized project websiteDecentralized Exchange DEX
RegulationOften unregulatedMostly unregulated but transparent
LiquidityLow at launchImmediate liquidity via DEX
Token AccessDelayed distributionInstant access post purchase
Trust FactorLow high scam riskMedium smart contract-based
KYC RequiredSometimesRarely
Year Popularized2017 20182020 Present
Cost to LaunchHighLow

What Is the Difference Between Crypto Presale vs ICO?

Many people confuse a crypto presale with an ICO. We need to understand that they are related but not the same. It is a crypto presale that happens before the public ICO. This stage targets early investors & often offers discounted token prices. They open the ICO after that stage to the general public.

The IDO presales are also common in modern launches. We see projects offer early access to selected wallets before the official DEX launch. It helps build community & reward early supporters.

How Do ICO vs IDO vs Presale Compare in the Full Picture?

The section looks at ICO vs IDO vs presale together for clarity. We can see presale as the earliest stage before both ICO & IDO. It sells tokens at the lowest price to select investors. They then move to ICO, which is open to the public & run by the project team. This stage can be slow & risky & centralized. The IDO is the modern model that runs on a DEX. It provides instant liquidity & faster token trading.

The current market shows that most new projects skip ICOs. We see them move straight from presale to IDO. It happens because IDOs offer more trust & faster access to liquidity.

Which Token Launch Type Should You Choose, ICO vs IDO?

The crypto market has several token launch types beyond ICO & IDO. We can look at the IEO Initial Exchange Offering done on a centralized exchange like Binance. It allows the exchange to check the project before its listing, which adds to the trust. They also use STO Security Token Offering, regulated by government agencies, for traditional assets on blockchain. The NFT drops act as another form of token launch used for non-fungible tokens.

The IDOs remain the most popular for DeFi projects today. We see them chosen because they are fast & cheap & decentralized.

How Can You Participate in an ICO vs IDO?

Joining an ICO

The typical steps to join an ICO are pretty simple. Users register on the project website. It may require KYC verification before any of the user participation. They send ETH, BTC, or stablecoins to the sale address. The investors then wait for the token distribution.

Joining an IDO

The usual steps to join an IDO are also very clear. Users set up a Web3 wallet like MetaMask. It may require getting whitelisted on an IDO launchpad like DAO Maker or Polkastarter. Then they connect the wallet to the DEX platform. The users buy these tokens during the launch window.

Which Is Better for Investors in 2025: ICO vs IDO?

The crypto market has matured over time. We see IDOs generally considered better for retail investors in 2025. It offers faster access to the tokens for the buyers. They provide liquidity from day one. The system makes manipulation harder than ICOs. It runs on transparent smart contracts.

The ICOs are still used in some cases. We see them work well for projects that need large capital for its operational. It can also target institutional investors in specific markets. The everyday investors often find the IDO model more accessible. They remove the need to trust a central team with funds.

What Is the Role of Launchpads in IDOs?

The IDO launchpads play a big role in the modern token launch ecosystem. We see that the platforms like Polkastarter, TrustPad & DAO Maker screen projects before listing. It adds a layer of checking that early ICOs did not have. They often require users to hold the platform tokens to get whitelist access. The system creates demand for the launchpad’s own token. It rewards loyal community members in the process.

Frequently Asked Questions

What is the difference between ICO and presale?

A presale happens before the public ICO and usually offers tokens at a lower price to early investors, while an ICO is the main public fundraising event open to a broader audience.

What is the difference between ICO vs IDO?

An ICO sells tokens directly from the project team to investors, while an IDO launches tokens through a decentralized exchange where liquidity is added immediately after the sale.

What is the difference between IDO and presale?

A presale is an early private or limited token sale before public launch, whereas an IDO is a public token offering conducted on a decentralized exchange platform.

Conclusion

At last, we can conclude that the understanding of ICO vs IDO is essential for any of the crypto investor. We see that both models allow the projects to raise funds & then launch tokens. It shows clear differences in structure & risk & access. They made ICOs the pioneers of crypto fundraising. The model opened doors to both innovation & fraud. We improved the system with IDOs by using decentralized technology. It offers speed, transparency & then immediate liquidity.

The careful research remains important before investing. We need to check the team & token details & smart contract audits & then the community feedback. It protects your investment from major risks. They help you spot good opportunities before the wider market reacts.


Disclaimer: BFM Times acts as a source of information for knowledge purposes and does not claim to be a financial advisor. Kindly consult your financial advisor before investing.

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