The Pros and Cons of Crypto Bounty Programs
How a popular BitcoinTalk strategy can be a double edged sword for any project
One of the strongest marketing tools an ICO has is the allure of a generous bounty program. Crypto Bounty Programs are lists of tasks that generally anyone can partake in and receive tokens from the project. Tasks usually include actions meant to generate community growth, like joining the telegram channel, retweeting content, liking on facebook and signature campaigns on BitcoinTalk. You can find the list of Bounty programs here.
Newer versions of Bounties can also include translations, meme/graphic work, and YouTube/Article creation. Even rarer, there are bug bounties and developer bounty programs that are much harder to participate in, but also offer a much larger portion of the projects coins/tokens.
Although Bounty programs can always increase user counts, they are not always the best way for a project to grow awareness. This article will discuss the Pros and Cons of this popular strategy so you can decide if its the right choice for you.
Huge awareness: Since people are incentivized to share the project, the project goes viral and the community grows rapidly. I’ve seen telegram groups go from 10 people to 10,000 in 2 days with a generous bounty program managed by the right team
Low upfront cost:Most ICO projects don’t have the funds to compensate for work at the beginning. By paying people with tokens that will have a future value, a project can recruit help for referrals, content, and even development resources. This is a fair trade if the token value increases, so it is a risk/reward proposal for both the project and the bounty hunter.
Distribution: One of my favorite reasons to hold a bounty campaign is to distribute the coin/token to a wide audience. By having telegram, twitter,and facebook bounties, you can be sure that the token holders are a wide range of people. Keeping the restrictions light (number of followers and rank in Bitcointalk) will also help increase the amount of people that are able to become token holders
Dumping: One of the main reasons not to do a bounty is that most bounty hunters are not looking to support the project or be long term holders. They have completed their work and want compensation as fast as possible. Remember, most of the work is pretty low in effort, so there will be many people waiting to claim their $5 in value the moment the token is listed. Make sure to manage expectations and consider a lock-up period.
Bots:There is no incentive to fake telegram people other than bounty programs. The proliferation of bots in the Crypto Telegram world is a direct consquence of these easy to apply and no KYC bounty programs. There can be a rapid increase of telegram followers, but they could also all be bots that do nothing other than increase your count and eventually, dump your coin
Bad quality content: The easiest and most effective part of a bounty program are the referral actions, but content bounties usually payout more. Because of the higher returns, many people will try to apply for these by copy/pasting parts of your existing marketing or put together a rush job article. This can lead to wasted hours evaluating content if not structured correctly.
Poor bounty experience: If you have created a bounty program, you better live up to expectations. I have seen 100’s of bounty programs start and fail miserably because the team was not prepared for the huge amount of work involved in managing the program. If the hunters are not being respected and listened to, they will quickly call your project a lying scam and make sure that the rest of the world knows.
So should I have a Bounty Program
If you have a strong product, want wide distribution, and are looking for a low cost way to spread the word — yes
If you are in the beginning of an idea and looking for free work — no
Bounties are great to grow audiences and distribute the token to a wide user base, but can be a horrible experience if not managed correctly. The workload involved is HUGE and most people think that this is just a matter of giving out free tokens. Just like everything in life, you get what you pay for, and trying to do this without spending any money can possibly lead to disastrous results. Make sure to hire an experienced team like the guys at TalkBTT or look at some popular bounties on BitcoinTalk.