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Clickbait titles, intrusive ads, rigorous referral programs, promising lotteries and bounty campaigns: The world of marketing and the world of blockchain can feel indistinguishable nowadays. To survive in today’s ruthlessly competitive environment, blockchain projects need to come up with a number of encouraging approaches to get noticed and not be eaten up by others big marketing campaigns.
As a Community Manager, I’m in constant contact with the different crypto communities out there and it is interesting to see what phases they often go through. In this blog post, I want to talk about the incentives in crypto communities, what impact they can have and what this really means both to the project and the individual community member himself.
Token Explosion
The dawn of Ethereums ERC20 standard in 2016 gave us the opportunity to create our own cryptocurrencies without the hassle of programming and deploying our own blockchain. It’s implications where tremendous! Entrepreneurs all over the world started to leverage the hype around cryptocurrencies as a method of financing their business by putting a token layer on whatever startup idea they had. The tokenization of the world began.
Airdrops
I am sure everybody of you heard about airdrops. It is the fast and easy way for everyone to grab some spare token from a young blockchain project or startup. They often distribute airdrops to attract the masses and keep them in the loop to either grow the community or create the illusion of one by outsourcing their social media reach in one way or another. This blurs the line between an airdrop and a classical bounty, as some airdrops have small tasks attached to claim them.
Nowadays, people got so used to standardized token giveaways that it got hard to distinguish between real airdrops for a certain group of people and disguised bounties inviting everyone to participate in exchange for some follows and likes.
The Origin of Airdrops
Anyone remember the word faucet? No? Well, this is how we called airdrops back in my days, before the last Bitcoin bull run. Between 2013 and 2014, blockchain projects (which usually were forks of other blockchains with tweaks) had to compete for peoples attention as well. But they usually did it with faucets that could be stocked up voluntarily by the token holders and community members themselves. Newcomers could simply redeem every once in a while tokens from this faucet and play around with the token.
Airdrops, however, were serious distribution methods for cryptocurrencies that had a certain community economy design. One of the first airdrops to make news was Auroracoin. This coin intended to create a pre-mine of 50% of the total supply and distribute it in a fair manner among the Icelandic citizen. The reasons for airdrops can be different, like building a big number of token holders in a very short time. This creates an initial value applied to the coin, and attracts miners to build a stable blockchain network quickly. Another reason can be to drop it to an exclusive community, ensuring that it holds the major stake of the coin, like Byteball started in 2016. It is interesting to see how the idea of airdrops was quickly adapted to serve as a marketing method for a project.
The Problem with Airdrops
Even if airdrops can be a great opportunity for community members to get rewarded for supporting a project, airdrops can also have a negative effect. The valuable opportunity to gather relatively large amounts of token from young projects also attracts money grabbers who don’t add value but are specialized to pass all requirements to receive the token and create the illusion of a massive community. Seeing projects allocating up to ten percent of their token supply to bounty campaigns, airdrops can put the project at risk if not being cautious enough about to whom they are going.
Moreover, those who genuinely try to spread awareness for the project and support it are cut off. In fact, this can be contra productive for the project as it loses real supporters, discouraged by bots, money grabbers, and other corrupt individuals.
Conclusion
We are reaching a point where most market participants have a good feeling of how the industry works and the facade of full telegram groups and hundreds of thousands of twitter followers don’t impress anymore. I call out every Community Manager to get back to the path of a healthy community itself and engage with it naturally. Protect the incentives you give your community from exploitation and create interesting and fun ways for the community to not only participate but also be a real part of the project. This way, you can build a blockchain project that stands for trust and transparency instead of smoke and mirrors.
