Definition ∞ A token sale is a fundraising event where a new cryptocurrency or digital token is sold to investors in exchange for other cryptocurrencies or fiat money. These sales, often referred to as Initial Coin Offerings or Initial Exchange Offerings, provide projects with capital for development and allow early supporters to acquire project tokens. The terms of the sale, including price and distribution, are typically outlined in a whitepaper. They are a common method for launching new digital assets.
Context ∞ The discussion around token sales frequently centers on regulatory scrutiny, investor protection, and market speculation. A key debate involves distinguishing between utility tokens and security tokens, which dictates the applicable legal framework. Future developments include more standardized fundraising mechanisms, such as regulated security token offerings, and clearer guidelines from financial authorities. These aim to professionalize the process and reduce risks for participants.
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