Secrets of a Successful Bounty Campaign
Among the different markets that have been deploying bounty campaigns, the best fit for the term is probably the ICO economy, the Wild West of funding. As rapidly it might grow, the community around crypto and blockchain still recalls a village on the frontier, that is still in the process of exploring the environment and figuring out best practices. Think of the community bulletin board that is bitcointalk.
At SICOS, we help our clients along the way to a successful token offering. As part of that journey, we develop individual strategies for our clients’ bounty campaigns. To guarantee a transparent and effective campaign, we are continually researching emerging standards and best practices around ICO bounty campaigns.
For this article, we looked at what some [1][2] call the “best” ICOs in early 2018: Five projects that managed to raise several million as well as five that scored high on ICORating and ICOBench, namely:
Dragon Coin, Bankera, Zeepin, Elastos, Olympus Labs, WePower, Truegame, Play2Live, StopTheFakes, and ARTOKEN.
Standing out among the hundreds of crowdsales launched this year, they should be able to teach us one or two things about bounty campaigns, too, right? Let’s dive into it.
Communication
Right now, the town’s bulletin board is wallpapered with many layers of bounty posts. What can you do? Spread the word around town? Put up a billboard outside your house?
With an ever-increasing number of ICOs, the number of bounty campaigns doesn’t exactly run low, either. At the time of writing, there are several hundred active threads in bitcointalk’s “Bounties (Altcoins)” forum. Marketing-savvy token sellers have been proceeding to use other means of promoting their bounty campaigns. To complement your bounty post on bitcointalk, your Twitter, Facebook, blog and website should all be equipped with an announcement of your bounty campaign. Besides bitcointalk, there are other platforms that may be less established, but offer a more convenient and professional presentation of your bounty.
From the ten selected projects, only Zeepin went with an integrated bounty platform on their website. The majority relied instead on a bitcointalk thread detailing the campaign’s terms and conditions, which was then promoted through Twitter and Medium. Three companies built solely on bitcointalk for their announcement.
More remarkable however, is the common commitment to thread moderation. All projects that maintain a thread on bitcointalk stayed active, within reach if problems or misunderstandings occurred.
Payment
Who’s going to ride out to the desert risking their lives for a handful of extremely volatile currency. On the other hand, what’s the advantage of tossing a bunch of money to an unknown crowd when you can contract an experienced, trusted headhunter for the same pay.
Over- or underpaying bounty activity are mistakes that are easily made in ICO bounty campaigns. The insecure development of token exchange rates renders it difficult to assess how much money participants will hold in their hands eventually. Companies in their turn must strike a balance between paying enough to incentivize participation and preventing devaluation of their currency through inflationary bounty rewards.
Two major models exist for the distribution of bounty rewards: The wage model sets a fixed reward that is paid in return for each successful entry. The stake model sets a total reward sum for a certain task that is then split up between the accepted participants. Remarkably, our five high-raising ICOs all opted for a wage model, while the five high-rated ones used a stake model for calculating rewards.
A similar divide shows regarding the total reward sum. The economically successful ICOs each allocated less than 1% for their bounty campaign. The token allocation of the other five ICOs ranged between 1% up to an eyebrow-raising 8% of their total token supply.
The promised rewards varied to an even greater extend. In their YouTube bounty campaign, Bankera offered between 400 and 3,000 BKN tokens as a reward for producing a Bankera-themed video. At an ICO price of 0.0207 USD that’s a meagre 62 dollars tops for an entire video production. On the other end of the spectrum there’s Dragon Coin with a fixed bounty of 3,030 USD worth of tokens at ICO price for any accepted submission to their YouTube campaign. But wait, there’s more: Elastos was offering 7.236 USD as a reward in their video campaign. However, mind the fine print, their mouthwatering reward was given out only as the first prize of a bounty campaign held in the form of a competition.
Unfortunately, participants’ expectations of a big payout are frequently disappointed by plummeting post-ICO exchange rates. To prevent a virtual bank run once the bounties are being paid out, most projects choose to let out a continual trickle of payments over a period of 30 days. With the token’s volatile exchange rate, the development of reward sums can take unexpected turns until the bounties eventually end up in the participants’ wallets.
Regarding Dragon Coin, their generous compensation of 3,030 USD worth of tokens had shrunk down to only 810 USD by the end of the payment period. At the time of writing, the reward of 1,000 DRG tokens is valued at around 100 USD. And if you thought Bankera’s 62 dollars in return for a video was a bad deal: Selling the bounty reward at this point would leave you with 6.50 dollars, and already at the end of the 30-day-period the compensation had dropped to 12 USD in worth.
While most tokens face a sharp decline of prices, some rates hold steady or even rise after the ICO. The fortunate winners of the Elastos bounty competition might have found themselves even more fortunate as the ELA token was worth more than four times as much as the ICO price thirty days after its conclusion. In total, four out of our ten research objects showed higher market prices at the end of the 30-day payment period. Sadly, at the time of writing none of the tokens has managed to keep its rate anywhere near its ICO price.
Entry Guidelines
Imagine you’re a sheriff posting a bounty on a wanted criminal and somebody comes asking for the reward, presenting his neighbors dead pet rabbit.
Unfortunately, this does happen in ICO campaigns. Particularly in judging editorial content such as YouTube or Blog reviews you might face many of those pet rabbits. Developing a fail-safe and objective system for assessing the quality of editorial content is a considerable challenge. Whether you accept or decline a submission will still come down to the subjective decision of the bounty manager, however, the more detailed your guideline on how bounty entries will be judged, the better your basis for argumentation. Make sure it’s really clear that it’s not that pet rabbit in the “WANTED”-picture.
In this discipline, Elastos particularly stands out among the ten featured projects. It is the only project, and really one of the only we’ve ever encountered, that features fully fledged legal terms and conditions on their bitcointalk announcement thread. Besides, Elastos’s bounty managers provide detailed guidelines specifying both requirements as well as assessment criteria for the video contest. While an elaborate bounty post with belt and braces means more of an effort, it protects Elastos from claims and objections of disgruntled participants.
Though other campaigns similarly feature a set of rules for entries, many of their requirements and conditions remain vague. For example, ARToken’s campaign rules disqualify “Low-quality articles and videos” [3]. Admittedly, quality is always subjective to a certain extent, however, low quality can be tied to quantifiable factors, such as maximum of spelling and grammar mistakes or a certain score on the Hemingway App [4].
Conclusion
As much as bitcointalk is still the small frontier town, informal and familiar, it has become less of a closed community than some bounty managers might think. Considering the abundance of ICOs currently launching, investors are scrutinizing projects more than ever, and a company’s presence on bitcointalk can end up tipping the scale either way. Moreover, thorough management contributes to the success of a campaign not less than its monetary incentives.
SICOS can help you in realizing a professional bounty campaign that will leave you with satisfied participants and a flagship presence on bitcointalk. If you are interested in what we do, we’d be happy to get in touch. You can reach us at hello@sicos.io
