Marketing an ICO campaign can be expensive which is why bounty solutions have become increasingly popular in the crypto space. Essentially, bounty solutions allow projects to maximise their marketing efforts by offering crypto tokens as a reward.
That said; bounty solutions have attracted the attention of regulators of late. They’re likely to face tough scrutiny going forward, so let’s find out more about this marketing strategy and why bounty solutions are in jeopardy.
What is an ICO Bounty Campaign?
Bounty solutions reward people for their time and skills and help to drive blockchain-based projects forward. The mode of payment is crypto tokens. Individuals or groups are paid once they’ve met certain objectives which could include social posts, promoting the project amongst their friends and family – and more.
Such solutions help projects to lower their marketing expenses and avoid paying huge prices for press releases, ad campaigns and other advertising modes. Tokens are instead put aside to reward those who complete specific ICO-related tasks. So, bounties are essentially crypto tokens, given as appreciation for helping to spread the word about a blockchain project. These campaigns fulfill the dual objectives of building a support base of people who are loyal to the project and getting the required investment without spending too much on expensive marketing campaigns.
Timing of Bounty Campaigns
Bounty solutions are often used to generate a buzz around an upcoming ICO project. The idea is to attract investors willing to dedicate their time and funds. In some cases, bounty campaigns are used post-launch to improve the blockchain project. Many issues such as bugs and community management difficulties can be ironed out by receiving direct feedback from investors and outside developers. Those who focus on ICO developments are given a ‘bounty.’
Concerns Related to Bounties
So, are bounty programmes always fruitful? Well, unfortunately not! This is because many people participate in bounty programmes but many refrain from participating in the ICO itself, therefore restricting the success of the ICO. Indeed, ICOs are losing faith in bounty solutions for several reasons. Here’s a rundown of some of the associated concerns:
- Such campaigns sometimes create an artificial sense of community.
- High incentives for promoting the project may result in crypto volatility.
- It’s hard to differentiate between genuine promoters of a project and those who just want rewards.
- Those who receive free tokens may sell them once the ICO is completed. This may go against the wishes of the project owners.
Now, these concerns have been noticed by regulators like the US Securities and Exchange Commission and strict regulations regarding bounty solutions are likely to be put in place in the near future. All this has made ICO promoters think of newer marketing options for their projects. That said; bounty programmes remain a good way to increase the visibility of a project and help to drive traffic to a project’s website both pre and post-launch. They also bring down marketing expenses which is a significant factor for start-ups with a limited budget.