The first ICO took place in July 2013 and was held by Mastercoin project.
R. Willett, the founder of Mastercoin proposed the idea that existing bitcoin protocol “can be used as a protocol layer, on top of which new currency layers with new rules can be built without changing the foundation.”
Mastercoin team issued their own token called Mastercoin (which is now known as Omni) and organized month-long fundraiser in which anyone could buy Mastercoins in exchange of bitcoins.
When the project started blockchain was the only protocol which was used for cryptocurrency transactions. And of course the idea of extending blockchain functionality made people rather excited and motivated them to buy Mastercoins.
The participants of the first ICO realized that when the extended protocol was developed Mastercoins would become much more valuable which would allow them to sell their tokens at a significant profit.
As a result Mastercoin’s ICO proved to be extremely successful and raised a total of about 5000 bitcoins worth about US$500,000 at the time.
Later in March 2015 Mastercoin was rebranded to Omni.