In the Wild West, the reward for catching outlaws was called a bounty, and the people who caught them were called bounty hunters. You can think of the crypto world as an online version of the Wild West, complete with bounties and bounty hunters.
Crypto bounties are token incentives and reward mechanisms used by blockchain projects. People who run these bounty programs are known as bounty hunters and receive handsome rewards every time they complete these programs. They can follow several rewards programs simultaneously, although they usually only look for the highest paying programs.
For example, Ethereum has a bounty program to help the network identify bugs in its protocol. It calls on the community to locate these bugs and rewards them for each vulnerability they find.
Bug fixes were the main focus of the bounty programs. However, after noticing the buzz they created among users and developers, many projects started using bounty programs as precursors to their ICOs, using them to build hype around a token before its launch. launch. As such, bounty programs are often confused with airdrops. However, these two concepts are not the same and have many differences.
Let’s explore these differences and understand how crypto bounty programs work.
How do bounty programs help crypto projects?
Most often, crypto bounty programs are used to promote the initial coin offering (ICO) of a token. Like an IPO, an ICO allows entrepreneurs to raise funds to launch a new cryptocurrency. In return, investors receive a certain amount of these tokens. However, unlike an IPO, the project does not go public after the ICO. Instead, it remains 100% in the hands of developers and investors simply profit from the increasing value of the coin.
Since ICOs are so important, entrepreneurs use marketing strategies like bounty programs to help build recognition and engage investors. On the other hand, bug bounty programs help developers secure their project code and ensure that there are no backdoors for bad actors to hack into the system.
How do bounty programs work?
Bounty programs are usually advertised by the entrepreneur or project leader looking to push their ICO. They usually announce a promotional campaign where interested investors have to complete selected tasks and receive tokens in return. Tasks range from posting photos to promoting videos to posting reviews.
Due to their success, some projects continue to employ bounty programs long after ICOs. At this point, users are usually rewarded for locating bugs in the code.
What is the difference between crypto bounty programs and airdrops?
The main difference between bounty programs and airdrops is in the nuances of tasks and rewards. To start, you need to repetitively complete bounty-related tasks until the campaign is live. Airdrop tasks, on the other hand, are a one-time event.
Additionally, you have to complete smaller tasks for airdrops, and you don’t even need a specific skill to complete them. However, you need specific skills, time, and focused effort for bounties. Indeed, bounty programs are relatively more difficult.
Where to find crypto bounty programs?
Bounty programs had become a phenomenon during the ICO and Bitcoin craze of 2017-18. So much so that some scam projects started to emerge and bounty hunters were promoting fake tokens. At one time, the Securities and Exchange Commission reviewed some of these programs because of their similarity to pump and dump programs.
So, naturally, bounty hunters had to be more specific in their search for credible programs. So how do you find good bounty programs? Most legit projects have a dedicated page just for bounty programs, like Coinbase and Ethereum.
However, bounty programs fall into a legal gray area – trapped between a marketing scheme and a pyramid-type fraud. Critics claim that companies can take advantage of these inexpensive campaigns and use them to publicize bogus projects. On the other hand, bounty hunters who are secretly paid to promote a project they don’t even care about are unethical, if not illegal.
(Edited by : Priyanka Deshpande)