Earlier this month, the people behind a software project called Tezos raised more than $230 million in a roughly two-week fundraiser.

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“It’s a very flexible instrument—it can be connected to equity, to debt,” says Sasha Ivanov, founder of the Waves blockchain platform, where ZrCoin and Primalbase tokens were sold, of digital tokens. “You cut out all the middlemen, so it’s more cost effective, ’cause you can really go to the public directly.” Initial coin offerings didn’t appear this year: Around 2014, when bitcoin prices first topped $1,000, a wave of rival cryptocurrencies known as altcoins entered the marketplace. Most quickly disappeared, or saw their values drop to near zero. But since January, a new wave of offerings has already raised than ten times as much as was raised in all of 2016, according to Smith and Crown–with at least three projects raising more than $100 million. “Those are incredible numbers,” says Stan Miroshnik, CEO of the Element Group, which provides investment bank-style advice and services to groups launching coin offerings. “Those are IPO-level numbers in the public market.” The coin offering market particularly took off after ethereum and bitcoin rose sharply in value this year, leaving the cryptocurrency enthusiasts most comfortable investing in such projects suddenly flush with digital cash. Ethereum also made it easier to create new digital tokens through its support for smart contracts. Those are bits of code written by ethereum users that can transfer currency under certain circumstances, like when payment is due on a loan, or keep track of who holds other, newly created virtual tokens. A standard called ERC20 sets a common interface for smart contracts handling tokens on the ethereum network, letting coin-managing wallet software and other programs already familiar to successful ethereum investors handle new tokens without the need for special adaptations. “They have a lot of resources to play with, and investing it in tokens or the other parts of the ecosystem is a pretty logical space,” says Matt Chwierut, research director at Smith and Crown.

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But investing in digital tokens is unlike putting money into stocks or mutual funds.The coins are, at least at the moment, essentially unregulated, though the Securities and Exchange Commission recently signaled that some likely fall under the purview of U.S. securities law. Teams utilizing coin offerings often raise money at much earlier stages than traditional companies turn to the public markets. They frequently offer mathematically intensive white papers and public GitHub repositories with proof-of-concept code in lieu of slick prospectuses and audited financial statements. In some ways, the market more closely resembles crowdfunding platforms like Kickstarter or Indiegogo, though high-raising projects such as Tezos dwarf even the most lucrative Kickstarter fundraisers, like those for Pebble smartwatches or the Veronica Mars movie, by an order of magnitude. And since the offerings take place outside of regulated markets or commercial fundraising sites, there’s little vetting being done of projects seeing support, besides that being done by investors themselves. “There’s just not a lot of regulatory clarity on what kinds of claims projects themselves can make, and people who are participating in these types of opportunities need to be very cautious, and of course not contribute or invest more than people can afford to lose,” says Chwierut. “It is most likely that some of these projects will fail—just like an angel investor or a seed stage venture capitalist or even someone who participates in a Kickstarter campaign, things they fund will fall apart.” The blockchain world has also been affected by a series of high-profile hacks—virtual heists striking everything from cryptocurrency exchanges to wallet software to ICOs themselves. Last June, a project called the Distributed Anonymous Organization, or DAO, raised more than $150 million on the ethereum network, planning to let investors vote on how to invest the funds in other projects. But a defect in the DAO’s code let hackers steal much of the invested money, an attack only averted when ethereum users patched the network’s own code to let investors recover their funds. More recently, cryptocurrency trading platform CoinDash saw about $7 million fraudulently diverted from its own coin offering after scammers hacked the project’s website to direct investors to transfer funds to the wrong virtual address.

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And in July, at least three post-ICO projects—commerce platform Swarm City, casino Edgeless, and blockchain platform Aeternity—lost a collective 153,000 ethereum, now worth about $30 million, after hackers exploited a bug in common wallet software. Each project said it would continue to develop its platform even after the theft. “Black hat hackers, vulnerabilities, and bugs will not stop us from creating the decentralized sharing economy our community and the world craves,” the Swarm City founders said in a Medium post. Even many people in the cryptocurrency sector acknowledge some tokens are overvalued. “Of course there’s a bubble,” says Ivanov. “Definitely.” But advocates argue there will be a place for the digital tokens long-term, even if the current wave of enthusiasm subsides. Tokens can be used to represent credit held in other online systems, from video games to any sort of prepaid services, or even to track ownership of real-world assets from gold to real estate. And they enable fledgling startups, and even more loosely structured projects, to raise funds effectively on their own terms, at least to the extent future regulation permits.

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“I think token sales make too much sense at this point to really go away,” Chwierut says. “The advantages this represents to seek to do any of the following—raise capital, build community, and attract early users—is just too great to totally deny.”