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, with bounties and bounty hunters.
Crypto bounties are tokenised incentives and reward mechanisms employed by blockchain projects. People who carry out these bounty programs are known as bounty hunters, and they receive handsome rewards every time they complete these programs. They can pursue several reward programs simultaneously, though they mostly only chase the best-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 such bugs and rewards them for every vulnerability they find.
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Bug fixes were the primary objective of bounty programs. However, after noticing the buzz they created amongst users and developers, many projects started employing bounty programs as precursors to their ICOs, using them to create hype around a token before it was launched. As such, bounty programs are often mistaken for airdrops. However, these two concepts are not the same and have quite a few differences.
Let’s explore these differences and understand how crypto bounty programs work.
How bounty programs help crypto projects?
More often than not, crypto bounty programs are used to promote the initial coin offering (ICO) of a token. Like an IPO, an ICO allows entrepreneurs to collect funds to launch a new cryptocurrency. In return, investors are given some amount of those tokens. However, unlike an IPO, the project does not become public after the ICO. Instead, it remains 100 percent in the hands of the developers, and investors simply benefit from the rising 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 sure-up their project code and ensure there are no back doors for bad actors to hack the system.
How do bounty programs work?
Bounty programs are usually announced by the entrepreneur or the project owner looking to push its ICO. They usually announce a promotional campaign where the interested investors have to perform selected tasks and receive tokens in return. Tasks range from posting photos to promoting videos to publishing reviews.
Owing to their success, some projects continue to employ bounty programs long after the ICOs. At this stage, users are generally rewarded for locating bugs in the code.
What’s the difference between crypto bounty programs and airdrops?
The major difference between bounty programs and airdrops lies in the nuances of tasks and rewards. For starters, you have to repetitively perform bounty-related tasks until the campaign is live. Airdrop tasks, on the other hand, are a one-time event.
Plus, you have to finish smaller tasks for airdrops, and you don’t even need a specific skill to finish them. However, you need specific skills, time, and concentrated efforts for bounties. This is because bounty programs are relatively more challenging.
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 fraudulent projects started to emerge that had bounty hunters promoting fake tokens. At one point, the Securities and Exchange Commission scrutinized some of these programs due to their similarity with pump and dump schemes.
So, naturally, bounty hunters needed to be more specific with their search for credible programs. So how do you find good bounty programs? Most legit projects have a page dedicated solely to bounty programs, like Coinbase and Ethereum.
However, bounty programs come under a legal grey area – trapped between a marketing program and a pyramid-scheme-style fraud. Critics claim that companies can take advantage of these inexpensive campaigns, using them to spread the word about fake projects. On the other hand, bounty hunters secretly getting paid for promoting a project they aren’t even interested in it is unethical, if not illegal.
(Edited by : Priyanka Deshpande)
