A token sale is covered in detail under initial coin offering (ICO), the best-known form, which explains the history, mechanics and regulation of crypto fundraising. This page explains the broader term, which projects often prefer in their own announcements.
A token sale is any arrangement in which a project sells its tokens to buyers in exchange for cryptocurrency or ordinary money, usually to fund development before or around launch. It can be held directly by the project, as with an ICO, through a centralized exchange in an initial exchange offering (IEO), or on a decentralized platform in an initial decentralized offering (IDO). Sales are often split into rounds, from private sales to selected investors, sometimes under a simple agreement for future tokens (SAFT), through a pre-sale, to a public sale.
The names differ mostly in emphasis. "ICO" became associated with the 2017 and 2018 boom, when many sales failed or proved fraudulent and regulators took action, so later projects adopted neutral labels such as "token sale" or "token generation event". The label does not change the legal analysis: depending on the jurisdiction and the token's features, a sale may be treated as an offering of securities and require registration or an exemption. Buyers face risks including project failure, lockups that delay selling, and scams.