If the company ends up raising that much by the offering’s expected closing date, this coming Friday, it would be more than twice the size of the next largest coin offering— Telegram Group Inc. raised $1.7 billion—and would be larger than all but one or two of the world’s initial public offerings on stock exchanges so far in 2018.

That a little known startup could raise so much money without a concrete plan for it speaks to trends in the topsy-turvy world of cryptocurrencies and views of the future of the online world.

The company didn’t reply to a request for comment.

Virtual currencies like bitcoin and ether experienced a meteoric rise in 2017, drawing interest from everyday investors as well as Wall Street. That helped fuel a frenzy around initial coin offerings. These differ from virtual currencies in that the tokens being sold are often tied to a product or service a company plans to develop or offer in the future.

Although prices of bitcoin and other cryptocurrencies crashed early this year, investors kept shoveling money into coin offerings. ICOs raised $6.6 billion in 2017, and in 2018 they have raised about $7.15 billion, according to research firm Token Report, a total that doesn’t include block.one.

Some coin offerings have been exposed as scams, and others are from companies that may never actually develop a product or service. But many investors see them as a way to strike it rich investing in startups the way venture-capital firms have for decades.

 The virtual currency bitcoin continues surging to new highs as a frenzy of investors get in on the action. WSJ’s Paul Vigna explains what you need to know, and how to invest should you want to join the mania. Photo: Alexander Hotz/The Wall Street Journal.

While the ICOs run the gamut from gambling to matchmaking apps, the most hyped projects have been for so-called “platforms” that could redefine broad areas like the internet or smartphone apps, offering general-purpose platforms for developers.

Block.one and its token, which it calls EOS, fall into this category. The idea is that such platforms could help reshape the architecture of the online world, ushering in an internet 3.0. It’s similar to Google’s Android, but the platform wouldn’t be owned by a single company.

There is also hope that such platforms could vastly improve the future of online payments through the open-ledger blockchain technology that underpins bitcoin and other cryptocurrencies.

One formidable competitor is Ethereum, the platform that underpins the currency ether. It has been successful in some ways—it’s the second largest virtual currency behind bitcoin. But it has struggled to scale: Ethereum can process only about 15 transactions per second.

EOS and its rivals think they can beat Ethereum to mass adoption by creating systems that aren’t as decentralized, and so can process more transactions per second. Essentially, they are trying to occupy a space between Ethereum and Android.

The money raised in the coin offering gives block.one a war chest that dwarfs its newer rivals. Theoretically, the company could use the funds to support the software it is developing, also called EOS.

Yet block.one isn’t clear about how exactly it will spend the proceeds. The company plans to build a platform for hosting web applications; the first live version is set to be released in June. There’s a twist, though: The company doesn’t plan to develop the software after releasing it. It hopes to see others do that and has said it won’t operate any public network built upon the EOS software.

To that end, block.one has pledged to invest more than $1 billion in startups building on EOS. It hasn’t said, though, what it will do with the remainder of the funds.

Block.one is expanding. Its website lists eight jobs for software engineers in Blacksburg, Va., where the company’s chief technology officer, Dan Larimer, lives and works. The company also recently hired a new general counsel, former Bank of New York Mellon lawyer Lee Schneider, and a new chief financial officer, Rob Jesudason, who was CFO of Commonwealth Bank of Australia.

Both report to Brendan Blumer, the company’s 31-year-old, Hong Kong-based CEO.

None of the company’s executives responded to requests for comment.

Besides the possibility of a new platform, investors are also drawn to the presence of Mr. Larimer, who has worked on other popular coin offerings. “I believe the (block.one) team has the technical capability of carrying this project out,” said Dafeng Guo, a 30-year Hong Kong citizen living in Shanghai.

Mr. Guo started buying EOS last summer and said he was impressed by the project’s plans to become a mainstream platform. That led him to help start EOS Asia, a private group that plans to develop, and possibly profit from, the EOS blockchain. “I believe in EOS,” he said.

Block.one has sold 900 million EOS tokens over nearly a year, most via daily auctions. Every 23 hours, it has auctioned off 2 million tokens, and accepted the high bid as the set price for that block. It has received proceeds from the sale in ether.

To steer clear of regulators, the firm blocked investors in the U.S. and China, though some used technical workarounds to get in on the action. Based on those sales, which are visible through digital wallets, it appears the company will raise more than $4 billion.