First, it was digital currencies like bitcoin. Then, it was distributed ledger technologies like blockchain. Now, another potentially groundbreaking innovation from this same community of technologists has vaulted to the forefront and taken center stage—the Initial Coin Offering, or ICO.

An ICO is a decentralized method for funding digital start-up projects. Similar to crowdfunding, an ICO allows the project developers to circumvent traditional sources of initial capital, such as banks or venture capitalists. Instead, the developers raise money by issuing digital “tokens” to investors in exchange for digital currency, like bitcoin or ether. In return, the tokens typically entitle the investor to certain rights, such as the right to buy and sell goods and services offered by the project, or the right to share in the future profits of the project. A clear benefit of an ICO is that it allows project developers to tap into a vast pool of tech-savvy investors at a very early stage—sometimes when the digital product being developed is nothing more than an idea on a page.

And the money is pouring in. In the first half of this year alone, ICOs have raised over $1.2 billion in funding, which far exceeds the amount raised through traditional venture capital financing. Tokens are being snapped up at a feverish pace. One recent ICO raised over $35 million in under 30 seconds. Another set a record in September by raising over $257 million. As the numbers indicate, the ICO market is red hot and is showing no signs of slowing down. Celebrities are even starting to get into the mix; Floyd Mayweather and Paris Hilton have each promoted particular ICOs on social media within the past month.