In the last couple of years we have witnessed the ICO boom which resulted in over 4 billion dollars raised by startups. The purpose of these ICOs have been to enable startups crowdfund their project and many startups were able to reach their maximum target, some within minutes.
The ICO fundraising model enables startups to raise capital by issuing their native crypto tokens on a blockchain - mostly ethereum blockchain- and delivering the tokens to the investors. Usually these tokens can be traded on crypto exchanges. Crypto tokens can be classified as utility tokens or security tokens based on their function.
In the past, we have see much of utility tokens. Utility tokens can referred to as app coins or user tokens, grants users access to a company's product or service. The main characteristic of utility token is that it is not an investment.