This paper presents a model that rationalizes the use of ICOs for launching such platforms: by adding dynamics to a platform launch, ICOs can 1) solve a coordination failure inherent in many platforms with network effects; and 2) harness the “wisdom of the crowd” by aggregating dispersed information about platform quality. Through either mechanism, an ICO increases platform value, makes the launch of a valuable platform more likely, and thus increases social welfare. The paper uses a model to provide guidance to regulators: It analyzes under what circumstances ICOs should be banned or allowed, and discusses governance mechanisms that they should include.