Bounty Analysis
Detailed guide to ICO Bounties
1. What are Bounties?
A Bounty campaign is a marketing tactic that allows a company to allocate a small amount of their tokens to promoting their ICO through the crypto community. Bounties are simply jobs, tasks, or projects that have usually been created by token developers. If participants complete the job, then they will receive a reward in token form.
The tasks are never too complicated, and almost never involve any sort of computer programming. That’s what the developers do. However, there will be other things that the developer either can’t do, or just won’t have time to do. However, those tasks are necessary for the success of the token they created. So what do they do? They get other people to do those tasks, rewarding them with tokens of their creation.
Examples of typical bounties include promoting the new token on Twitter, or translating promotional content for that token. Something anyone can do in their spare time.
2. Origin of bounties
The original “Bugs Bounty” program was the creation of Jarrett Ridlinghafer while working at Netscape Communications Corporation as a technical support Engineer.
Netscape encouraged its employees to push themselves and do whatever it takes to get the job done and, in late 1995, Jarrett Ridlinghafer was inspired with the idea for, and coined the phrase, ‘Bugs Bounty’.
He recognized that Netscape had many enthusiasts and evangelists for their products, some of whom to him seemed even fanatical, particularly for the Mosaic/Netscape/Mozilla browser. He started to investigate the phenomenon in more detail and discovered that many of Netscape’s enthusiasts were actually software engineers who were fixing the product’s bugs on their own.
More recently, the concept of a bounty program comes from the online gaming world, where a bounty is a reward paid out to an individual or group for accomplishing certain objectives.
In the ICO sphere, bounty programs are used by blockchain startups to accomplish a wide range of tasks at the cost of the project’s token.
3. Purpose of bounties
ICO bounty programs allow companies to use their platform tokens for maximization of their marketing efforts.
Within the cryptocurrency scene, bounties have become a useful part of any ICO campaign. Many startups usually incorporate a bounty program as part of their ICO campaign. During the bounty program, the ICOs provide compensation for a number of tasks spread across marketing, bug reporting or even improving aspects of the cryptocurrency framework. The reward is usually in the form of cryptocurrency tokens or fiat currency (this option is rare).
Bounties are essentially tokens of appreciation for helping the blockchain project progress. They cut down on costs for startups while simultaneously incorporate members of the blockchain community.
However, the ICO landscape is extremely competitive. It is not uncommon for dozens of ICOs to be happening at the same time. One way that startups can get ahead of their competitors is through running a successful ICO bounty program.
4. Types of bounties
It is common for a cryptocurrency startup to set aside a percentage of the total coin supply for the bounty program. Information regarding this amount can usually be found on their website, white paper or Bitcointalk ANN thread.
In the ICO sphere, there are two main categories of bounties:
- PRE-ICO Bounty Programs — Like the name implies, these are bounty programs that are carried out before the actual ICO. They are usually done to build momentum and to give the cryptocurrency project an improved presence on social media platforms. It is all about creating awareness for the cryptocurrency ICO and to get the buzz going. The aim of such bounties is that as participants go about carrying out the various activities, and spread the word in their circle about the new token or cryptocurrency.
- POST-ICO Bounty Programs — At this point, the ICO is completed and funds have been raised. Now, it’s all about making improvements to the projects based on community suggestions. Post-ICO bounty programs are aimed at improving feedback from the crypto community.
Pre-ICO bounties:
- Social Media Campaign Bounties
This involves activities that promote the ICO on the social media accounts of participants. The rewards earned depend on the engagement levels generated by such posts. This can be in the form of retweets, likes, shares, views, and comments. The popular social media platforms used for ICO bounty programs include Facebook, Twitter, and YouTube. - Article Writing Bounties
ICO bounty programs can offer rewards to bloggers to write featured articles about the ICO on their blogs. Just like the social media bounty, the rewards will be dependent on the engagement level of the articles and blog posts. - Bitcointalk Signature Bounties
This is a popular bounty for many ICOs. It is open to participants of the Bitcointalk forum. The ICO releases a signature with a code embedded in it. The ranking of the participants who post this signature determines the number of stakes they get. For most bounty programs, only people on Bitcointalk who are Jr. Members and above can participate.
Post-ICO bounties:
- Translation Campaign Bounties — This involves translating all documents for the cryptocurrency project as well as moderating different forum groups. The common translation activities include cryptocurrency website, white paper and the Bitcointalk ANN thread.
- Bug Reporting Bounties — Apart from being an effective bounty campaign activity, bug reporting also helps the developers. A good bug report clearly and concisely identifies issues with the cryptocurrency software or platform.
Note: There isn’t a hard and fast rule as far as the activities for Pre-ICO and Post-ICO campaigns. Cryptocurrency ICOs can decide to use any of the aforementioned activities in either type of bounty programs.
5. How to participate in bounties
ICO bounty programs are a great way to participate in the market and earn tokens. These tokens can even be exchanged for fiat money. Most of the activities aren’t really technical in nature as they rely on common internet activities and interactions. Participants can simply look up reliable and famous bounty programs on the internet. There are sites that will list a dedicated list of ICO bounty programs. One of the best ways to get involved in bounty programs is via Bitcointalk and Cryptocointalk forums. Almost all ICO bounties are listed here.
Users can simply check the eligibility criteria and the activities listed to be executed under the program. They can enrol themselves in a pre-ICO or a post-ICO bounty program with added ease & earn rewards with every share, every like or every article they like. Users who are participating in a bounty program are usually called “bounty hunters”. As a bounty hunter, participants are telling others about projects that are undergoing a certain bounty program.
Signing-up for an ICO bounty program is easy. As soon as users associate with a program, they start receiving links that can be easily posted to their social media accounts. Further success depends on the number of likes, shares and other social reactions. Also, it depends on participant’s writing or debugging skills, i.e. how well they might execute the task assigned. ICO’s usually explain in great detail specific rules for their bounty programs.
6. Future of bounties
We can say that as the popularity of ICO is increasing, there is a significant increase in the popularity of bounty programs. According to the website Bounty lord, from September 2017 to date (May 15th 2018), there have been 469 active bounties and 737 closed ones.
Out of all active bounties, 24 are active since January, 127 since February, 126 since March, 93 since April and 80 since May 2018. These numbers coincide with the increasing number of ICO’s that have emerged since the beginning of 2018.
These numbers clearly show that this trend is not going away, and that we can expect many more ICO’s and a lot more exciting bounty programs to show up in the second half of 2018.
Although the number of ongoing bounties is not going to diminish anytime soon, there is a lot of criticism of bounty programs, mostly for the following reasons:
- Bounties create an artificial sense of community through Telegram numbers, social media followers, posts, youtube videos, etc.
- They give incentives to “free” token receivers to sell when the token is available at the market
- There is no way to tell whether hype surrounding an ICO is an active, market-ready community or a well-incentivized group of bounty hunters
- Bounty incents this group of bounty hunters to pump any news, increasing crypto volatility
- There is no differentiation between someone who is genuinely promoting a project and someone who is posting for a reward
What might be the solution to these problems — Full disclosure.
- ICO projects should require their bounty hunters to somehow identify themselves when they are posting or doing an action for bountie
- Bounty hunters should voluntarily disclose when they are posting or doing an action for bounty
- Bounty programs should be disclosed during the token sale, so that anyone interested can clearly see what kinds of bounties are being levied and for what
Dear readers, this analysis is the product of an extensive research that was carried out in May 2018. Since the world of cryptocurrencies is changing extremely fast, this may not be relevant in the future, but for now, we hope you will find it useful :)
P.S. More educational articles will soon follow! Stay tuned :)
