Capital Formation

How people raise money with cryptocurrency.

Initial Coin Offering (ICO)

This is the most common form of raising funds for token networks, and drove the crypto market boom of 2017.

ICOs take a variety of shapes, but generally consist of the following:

  • Someone thinks of an economic system using a fungible cryptocurrency (typically ERC20)

  • They create a white paper to detail these thoughts and provide credibility

  • They create a landing page to explain the system and attract investors

  • They raise money by selling a percentage of the network to a group of private investors (optional)

  • They launch the token on an exchange, opening the investment opportunity to the public

The ICO boom of 2017 brought a ton of hype for the crypto industry, but also allowed for many to take advantage of the situation to raise money on "hopium."


This is essentially an ICO whose funds are immediately controlled and managed by a DAO. Many companies tried to do this after the original DAO failed. The success of this design pattern, and the tools required to implement will take more time to fully emerge.

NFT Sales

This is the most common form of fundraising via cryptocurrency for individual artists and brands. It also opens the door to mass adoption in a way that is slightly easier to grasp than fungible fluid token economies provide.

DapperLabs is pioneering the way with NBA Top Shots and BeepleCrap has made a significant splash in the art world (see: Social Tokens page).

DAOs and Multisigs

Many DAOs today create ways for communities to pool money together and make decisions in a collective way through key signatures. Some DAOs are simply vaults that require multiple key signatures to manage the funds. Others are voting systems with more complexity (see: Decentralized Organizations).

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