Token Presale vs ICO: What’s the Difference?

If you are an investor looking for the next opportunity in crypto, you already know the importance of getting in early. Having early access to projects with high return potential can give you the benefit of acquiring tokens at a discounted price before they hit the open market.

Among the different opportunities to get early access, there are public presales, and in that category, we find token presales and ICOs. They share some similarities but are different at their core.

What Is A Token Presale?

A token presale is an event that happens before the token is listed on an exchange, whether centralized or decentralized. It is called a presale because it takes place in the early stage of a project, when the team still needs funding to move forward.

What Is An ICO?

An ICO, or Initial Coin Offering, is when the project founder team looks for funding directly through their own means. They use their own website and infrastructure to raise funds from investors.

This can carry higher risks for investors because ICOs can sometimes lead to scams or rug pulls if the team is not legitimate. (For more on these risks, see our blog on IDOs and ICOs.)

How Do Token Presales Work?

A token presale is essentially an ICO that happens before the token is listed on an exchange. Public token presales work by giving investors privileged access to tokens ahead of the broader market.

This can happen through:

• Crypto launchpads: Web3 incubators that curate and list vetted projects.
• Whitelists: Communities where you perform tasks to earn early access to a sale.
• IEOs: Initial Exchange Offerings hosted on centralized exchanges.

The key is finding the best way to get access to quality early-stage projects.

How Do ICOs Work?

ICOs work when you find project founders who are directly looking for funding. Some websites list reputable ICOs, but you must always do your own research before investing, as this model often involves higher risks than going through a vetted platform.

What Are The Main Differences Between A Token Presale And An ICO?

At its core, an ICO is a type of token presale; both involve offering tokens at an early stage to raise funds for a cryptocurrency project.

The difference is in how they are conducted:

• ICOs are managed directly by the project team through their own website and infrastructure.
• Token presales through platforms like launchpads or exchanges are organized by a third party, which vets the project and hosts the sale.

Are Token Presales Cheaper Than ICOs?

Not necessarily. Both are forms of presales, and both can offer tokens at a discounted price. The final price depends on the project’s resources, stage, and perceived value.

Which Comes First: Token Presale Or ICO?

Neither comes first; both are ways to acquire tokens early. A token presale is part of a project’s funding process, and a project can have multiple presales or funding rounds. It is not uncommon for a project to run several rounds before a public launch.

How To Decide Between A Token Presale And An ICO

Before making a decision, you need to evaluate the risks associated with investing in early-stage projects. ICOs can carry more risk because you are funding the project team directly through their website and infrastructure, without the added security of a third-party platform.

Always do your research, understand the project’s fundamentals, and assess the team’s credibility. If you want more security, as we have mentioned before, a crypto launchpad is the best platform for acquiring tokens early. A launchpad is designed to host and support projects, offering you a curated list and safety measures that can protect your investment.

Final Thoughts

Acquiring tokens at an early stage can benefit investors, but caution is key. As we have recommended in previous blogs, a crypto launchpad is one of the safest and most effective ways to access early-stage projects.

At CoinTerminal, we are a funding platform, an incubator, and an accelerator. Many of our projects have achieved high returns and gone on to list on major exchanges, demonstrating our commitment to supporting them before and after launch.

We are the first and only open-access launchpad on the market. All our sales are refundable, with no token-gating and no staking requirements. Contribute 250 USDT or more, and you are automatically entered into our $5,000 monthly lottery; even if you later request a refund.

Check our active sales now. Your next big opportunity could already be live.