First, there were ICOs. Then, there were STOs. And now, 2019 could become the year of the CTO—the consumer token offering.

Joseph Lubin, founder of ConsenSys, said on Thursday during his keynote address at the annual SXSW festival in Austin, Texas, that the company will be conducting “four or five [consumer] token launches this year.”

Initial coin offerings (ICOs) were all the rage in 2017-18—alarmingly so, per recent SEC enforcement actions. Security Token Offerings (STOs) are now viewed as the more regulatory friendly approach—a way to sell tokens, explicitly as securities, through various SEC-sanctified registration exemptions. But in practice, STOs are almost always restricted to accredited investors—and that's no way to sell a consumer product.

So what in the world is a Consumer Token Offering—and, way more importantly, how will it pass muster with the U.S. Securities and Exchange Commission?

“These are consumer utility token launches,” Lubin said during the keynote. “They’re tokens that wouldn’t be considered securities.”

These token sales would essentially follow the blueprint laid out by Civil—a ConsenSys-funded (ahem. Just like Decrypt, where you are now...), blockchain-based journalism network, which re-launched the sale of its consumer token last week following an unsuccessful initial attempt last October.

Both ConsenSys and Civil have taken a cautious approach to the sale of Civil’s CVL token. While the sale is open to anyone, anywhere in the world—including non-accredited U.S. investors—it has been structured and marketed in a way that Civil believes leaves no doubt that the token is in no way intended to be an investment instrument.

Lubin said the plan is to “continue to go at it in a much more restrained way—putting software into the world that requires a token.” The idea is that these tokens simply “incentivize people to participate in different roles on open platforms,” he said. “We think that’s going to be transformative going forward.”

But will the SEC agree?

Lubin said recent comments from SEC Chairman Jay Clayton, which support the analysis that Director William Hinman infamously laid out in June 2018 for why he believed Ether and Bitcoin were not securities, lead him to believe that it will.

“The idea there is that if it’s structured properly, and it’s a usage token, and if it’s marketed properly” then it isn’t a security. “You’re not telling people that if you buy this token, you’re going to make 5X your money,” he said. “You tell people that if you buy this token, you can read news from ethical newsrooms.”

Lubin appears to be arguing that CTOs are what ICOs should have been, to begin with: a way for crypto companies to sell their software (via blockchain-based tokens) without get-rich-quick promises. (OK, “CTO” is Decrypt’s term of art. No one has yet coined the phrase, but if it catches on? CTO is ours.)

The skepticism toward anything even resembling an ICO is understandable, given the shillers and shitcoin scoundrels that rushed in during the 2017 boom.

Said Lubin: “2017 was pretty extreme. Out of control, even. There were lots of great projects, but lots of bad projects, and lots of fraudulent projects.”

Lubin admitted that even the good-faith projects played a role in this: “There was this notion that you had to have a massive token launch, because you only had one shot at it. And the Ethereum project may be partly responsible for that too, because we didn’t think that we could bring in all the techniques of the VC world and do a small raise and validate what you’re building, and then do another small raise and validate and grow your project that way.”

The market’s disappointment with ICOs, plus the civil enforcement actions that the SEC has levied against crypto startups, have largely scared off the “bad and fraudulent projects,” said Lubin. “But the good projects are still happening.”

Take Civil, for example. Despite falling short of its goal last October, and being forced to refund investors their cash, the blockchain-based journalism experiment is off to a healthy new start. In just a week, the platform has sold more than 1.5 million tokens, Lubin confirmed, and raised $315,000 in revenue.

If that doesn’t sound like a lot, it may say more about where blockchain has been, rather than where it's going.