An ICO, or “Initial Coin Offering”, uses cryptocurrency to raise capital for new ventures and projects. During an ICO’s crowdsale, participant purchase project-specific cryptocurrency tokens (or “ICO coins”) as a form of investment in the company. Just like an IPO, an ICO represents the first stage of a project going public.
STO stands for Security Token Offering. STOs, like ICOs, allow investors to support new initiatives using cryptocurrency and principles of crowdfunding. But unlike ICOs, STOs are actual securities in the form of digital tokens. These security tokens grant investors ownership rights in a company or its underlying assets, such as stocks, bonds or investment funds, one of the methods by which STOs guarantee to provide additional security to the investor.