My first question and probably a bit naive. As I understand, ICO allows you to buy tokens. I am ok with this part. But how do you profit from that? I see two possibilities:

  1. Contract distributes profit to holder's account.
  2. Token can be sold when its price go up.

Which one is true? And if(2), how do we sell them? Can it be done from MEW?


2 Answers 2


It depends, and both exist.

Some contracts distribute profit to coin holders, such SONM, which plans to make money through selling distributed computing power for use in various industries. Owners of tokens get a dividend of any profits made through that process. See the white paper for more information.

Most tokens can also be bought and sold through sending coin through the blockchain to other peoples' wallets. There are services like coinbase that simplify this process (at least for the more mainstream tokens), if buying and selling easily and conveniently is your priority, but again it depends on the token.


"How do you [the token-holder] profit from that [holding tokens]?" That's the core question behind why would the token exist in the first place. A "token" is generic, and only has value by what it represents. If the token represents ownership of a car, then the value the token-holder gets from it is the exclusive use of that vehicle. If the token represents a share in a company, there might be dividends paid to shareholders. If the token represents some asset held in escrow (e.g. backed by gold), then the value of the asset being held's value going up or down would affect the token's resale value.

So, it's different for every token, and should be part of every token buyer's evaluation of whether or not they want to make the purchase.

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