An initial game offering (IGO) is a sale of a blockchain game's tokens or NFTs before the game launches, usually through a crypto launchpad. An IGO raises money and gathers a player base early, but it also carries the risks that made many game tokens of 2021 collapse.
IGOs grew out of the initial DEX offering (IDO) model during the play-to-earn boom of 2021. The idea was to let the future community buy in early instead of selling to venture funds. Many IGO buyers were speculators who sold as soon as their tokens unlocked, and games that were not ready saw their token prices fall at once. This article explains how an IGO works, why so many failed, and how teams and players can judge one.
How an initial game offering works
A typical IGO has five parts.
1. The launchpad
Gaming launchpads, and general launchpads with gaming sections, review projects, host the sale page and bring the buyers. A launchpad usually charges a fee and sometimes takes a share of the tokens. Launchpad reviews vary widely in depth, so a listing does not prove that a project is sound. The IGO launchpad guide covers how these platforms are built.
2. Tiers and eligibility
Most launchpads require buyers to stake or hold the launchpad's own token to reach an allocation tier. Higher tiers get guaranteed or larger allocations, and lower tiers enter a lottery. Buyers usually pass identity checks (KYC), and launchpads often exclude residents of some countries, frequently including the US.
3. What the IGO sells
- Fungible game tokens, often ERC-20 or BEP-20, usually the governance token or the premium in-game currency.
- NFTs, such as characters, land, items or "mystery boxes" that reveal a random item, usually as ERC-721 or ERC-1155 tokens.
- Sometimes both, with the NFTs giving early access or an advantage in the game.
4. Vesting and the TGE
At the token generation event (TGE), a share of the purchased tokens unlocks, and the rest vests over months, often after a cliff. Team and investor allocations follow their own schedules, which are usually longer. The unlock schedule affects the token price more than almost any other part of the sale.
5. Liquidity and listing
After the sale, the project adds liquidity to a pool on a decentralized exchange and sometimes lists on centralized exchanges. Low liquidity combined with large unlocks often leads to a sharp sell-off.
IGO compared with other ways to fund a game
| Route | Who pays | What they get | Main risk |
|---|---|---|---|
| IGO | Retail buyers through a launchpad | Tokens or NFTs, early access | Speculative buyers, legal exposure, selling pressure at unlocks |
| Direct NFT pre-sale | The community, on the studio's own site | Game assets | Smaller reach, the same legal questions |
| Venture or publisher funding | Funds, publishers | Equity or token warrants | Dilution, investor control |
| Crowdfunding or early access | Players | Copies of the game, perks | Smaller raise, delivery obligations |
| Free-to-play first, token later | Revenue or investors | A token only once the game has players | Slower, but based on real use |
What the 2021 boom and the 2022 crash showed
Axie Infinity's play-to-earn economy showed that players would buy NFTs that earned tokens. Dozens of games then raised money through IGOs on the same model. By 2022 the model had broken. Axie's reward token fell steeply, its Ronin bridge lost over $600 million in a hack, and many IGO tokens traded far below their sale price within months. Four patterns stood out:
- Token sales before the game exists attract speculators, not players. Buyers who want a quick profit sell at the first unlock.
- Play-to-earn economies need sinks. When players buy the token only to earn more of it, the economy depends on new buyers. A lasting design needs players who spend for fun, cosmetics or competition.
- Game development takes years. A token launched two years before a playable build faces two years of unlocks with no use.
- Launchpad tiers reward capital, not players. Allocations went to whoever staked the most launchpad tokens, often bots and farmers using many wallets.
Since then, more studios ship a playable game first, use NFTs for cosmetic or tradable items rather than for earning, and add a token only once an in-game economy exists. The guides on Web3 game development and NFT gaming platforms cover economy design.
Running an IGO responsibly
- Have a playable build. At least a public demo or playtest should exist, because a demo attracts buyers who care about the game.
- Get legal advice on the structure. In the US, the SEC test for an investment contract applies whatever the token is called, including "utility". In the EU, MiCA has applied in full since 30 December 2024, requiring a crypto-asset white paper and setting rules for offers to the public. Unique, non-fungible NFTs mostly fall outside MiCA. Decide early which countries the sale will exclude.
- Publish the token supply. State total supply, allocations, vesting and unlock dates. Avoid large unlocks at the TGE for any group, including the team.
- Make the NFTs useful in the game. Items should matter for play or self-expression, not only for resale. Disclose the odds for mystery boxes, because some countries treat paid random rewards like gambling loot boxes.
- Choose the launchpad with care. Ask about its review process, buyer identity checks, anti-bot measures, fees and the token share it expects.
- Audit the contracts. Attackers often target sale, vesting, staking and NFT contracts. The article on smart contract security covers the common flaws.
- Plan liquidity and communication. Add enough liquidity, announce unlocks in advance, and report development progress against a public roadmap.
The contracts and services behind an IGO
- Sale contract. The sale contract accepts payment, usually in a stablecoin, enforces caps per wallet and per tier, and records allocations. Merkle-tree allowlists keep gas costs low for long buyer lists.
- Staking and tier contract. This contract tracks how much launchpad token each wallet has staked and for how long, and often takes snapshots to stop last-minute staking.
- Vesting contract. The vesting contract releases tokens on a schedule with cliffs and linear unlocks, and buyers claim over time.
- NFT contracts. These are ERC-721 or ERC-1155 contracts with reveal logic. Randomness should come from a verifiable source such as a VRF oracle, not from block data.
- Off-chain services. These include the identity check provider, country blocking, detection of one person using many wallets, and a dashboard for claims.
- Multichain support. Many launchpads run on several chains, which adds bridge and deployment work.
The launchpad development guide covers the platform side in more depth.
Protecting the sale from bots and farmers
Allocation-based sales attract automated buyers who spread money across many wallets to beat per-wallet caps and lotteries. These defenses work together:
- Allocations tied to identity. Link each allocation to a verified person, not a wallet, and check that one person has not registered several wallets.
- Staking snapshots. Take tier snapshots well before the sale, at random or announced times. Require a minimum staking period, so nobody can borrow tokens briefly to reach a tier.
- Signed allocations. The backend signs each buyer's allocation as EIP-712 typed data, and the sale contract checks the signature, so nobody can forge an allocation or reuse it from another wallet.
- Eligibility based on play. Give more weight to accounts with real playtest history, not only to staked capital, so the buyers are closer to the people the game is for.
- A fair liquidity launch. Sniping bots try to buy in the first block of a new pool. Coordinate the listing time, consider purchase limits for the first minutes, and do not announce pool addresses early.
What to measure after the sale
The team's duties to buyers do not end with the IGO. Well-run projects track and publish metrics about play, not price:
- daily and monthly active players;
- retention by player cohort;
- the share of token and NFT purchases made by players rather than traders;
- the value of tokens spent in sinks compared with the rewards issued.
If token rewards keep exceeding sinks, the economy is paying sellers with new tokens, and the team should rebalance it before the next unlock.
How players can judge an IGO
- Is there a game you can play today, and is it fun without the token?
- Who is on the team, and have they shipped games before?
- What share of tokens do the team and investors hold, and when do those tokens unlock?
- What will players spend the token on, and why?
- Are the contracts audited, and does a multisig control the admin keys?
- Is the sale legal where you live?
Treat any IGO purchase as money you could lose entirely.
Frequently asked questions
What is an IGO?
IGO stands for initial game offering: a blockchain game sells tokens or NFTs to the public, usually through a launchpad, before or during its launch.
What is the difference between an IGO and an IDO?
An IDO is a token sale on a decentralized exchange or launchpad for any kind of project. An IGO is an IDO for a game, and it often includes NFTs and early game access.
Are IGOs legal?
The answer depends on the structure and on where the buyers live. Many tokens sold in IGOs could count as securities, so launchpads often exclude some countries. Get specific legal advice.
Why did so many IGO tokens fall in price?
Large unlocks, speculative buyers, unfinished games, and economies that needed new players to fund rewards.
Do I need a token to launch a blockchain game?
No. Many games use NFTs for items and have no fungible token. Others launch with no on-chain assets and add them once the game has players.