Despite ICO and IPO being similar from the point of view of their names, there is no real connection between blockchain tokens and company shares. Ownership of a blockchain token backed by a company provides no ownership, influence, or rights to the company's profits, behavior, or business in any way. The value of the token is instead driven entirely by the value of the network itself and what that network enables. Moreover, if a company creates a blockchain project and then abandons it, the token holders likely have no recourse.

Because of this, the way tokens are released can have a huge effect on how a company supports a blockchain project. For instance, if a team were to sell 90% of network tokens in an ICO, then in the future, they will receive only 10% of the benefit of the rise in value of the token. In comparison, they may have millions of dollars in cash on hand. Because of this, the team may decide to give only a limited amount of attention to the blockchain project and feel little urgency in terms of having improved the network. A small team with tens of millions of dollars could pay themselves large salaries until they die and be very secure.

On the other hand, a team releasing only 10% of tokens would be strongly incentivized to increase the value of the token, but there would be a different issue: centralization. A small group would overwhelmingly control the network. In most cases, this would defeat most of the purpose of blockchain technology, leading to the preceding issue—do they really need a blockchain to begin with?

Another problematic issue with tokens is their liquidity. With high token liquidity, a team of investors may be more incentivized to create hype for the network rather than substance. If a project can create enough buzz, the value of their token may increase tenfold. If the token is then liquid, team members and early investors could dump the token for a huge profit and then move on. No longer having anything at stake, the project might be abandoned.

For these reasons, high-quality projects often have some system of investor and team lockup, preventing team members and large investors from selling the token at all for a period of time followed, by a slow vesting where tokens are released over time. By preventing liquidity, the team must focus on long-term value versus short-term manipulation.