Definition
A token sale is the same as an initial coin offering. It is an event in the crypto markets during which a crypto project offers a portion of its tokens to a pool of investors before its official launch.
Understanding the term
It is important to note that a token sale happens before a cryptocurrency becomes available to the general public. Because once the community gets involved, a token price might shift depending on the demand created by buyers and sellers.
During a token sale, the prices at which early adopters and investors purchase tokens remain fixed. Token sales are also a type of crowd sale but open to only a few participants who are asked to complete specific tasks like locking up their portion of tokens.
A token sale during the early phase of a crypto project’s launch helps in building its market and identifying the section of investors who would be interested in supporting the project once it launches officially. This is why details regarding token sales can be found in a crypto whitepaper.
Takeaways
Token sales can be seen as an initial phase of the token offering announced by the creators. An initial coin offering (ICO) is the most common type of token sale.