Within the Wild West, the reward for catching outlaws was referred to as a bounty, and the individuals who caught them had been referred to as bounty hunters. You possibly can consider the crypto world as a web based model of the Wild West, with bounties and bounty hunters.
Crypto bounties are tokenised incentives and reward mechanisms employed by blockchain initiatives. Individuals who perform these bounty applications are often called bounty hunters, they usually obtain good-looking rewards each time they full these applications. They’ll pursue a number of reward applications concurrently, although they largely solely chase the best-paying applications.
For instance, Ethereum has a bounty program to assist the community establish bugs in its protocol. It calls on the neighborhood to find such bugs and rewards them for each vulnerability they discover.
Bug fixes had been the first goal of bounty applications. Nevertheless, after noticing the thrill they created amongst customers and builders, many initiatives began using bounty applications as precursors to their ICOs, utilizing them to create hype round a token earlier than it was launched. As such, bounty applications are sometimes mistaken for airdrops. Nevertheless, these two ideas usually are not the identical and have fairly just a few variations.
Let’s discover these variations and perceive how crypto bounty applications work.
How bounty applications assist crypto initiatives?
As a rule, crypto bounty applications are used to advertise the preliminary coin providing (ICO) of a token. Like an IPO, an ICO permits entrepreneurs to gather funds to launch a brand new cryptocurrency. In return, buyers are given some quantity of these tokens. Nevertheless, in contrast to an IPO, the undertaking doesn’t turn into public after the ICO. As an alternative, it stays 100% within the fingers of the builders, and buyers merely profit from the rising worth of the coin.
Since ICOs are so essential, entrepreneurs use advertising methods like bounty applications to assist construct recognition and interact buyers. Alternatively, bug bounty applications assist builders sure-up their undertaking code and guarantee there aren’t any again doorways for dangerous actors to hack the system.
How do bounty applications work?
Bounty applications are often introduced by the entrepreneur or the undertaking proprietor seeking to push its ICO. They often announce a promotional marketing campaign the place the buyers must carry out chosen duties and obtain tokens in return. Duties vary from posting photographs to selling movies to publishing critiques.
Owing to their success, some initiatives proceed to make use of bounty applications lengthy after the ICOs. At this stage, customers are typically rewarded for finding bugs within the code.
What’s the distinction between crypto bounty applications and airdrops?
The key distinction between bounty applications and airdrops lies within the nuances of duties and rewards. For starters, you must repetitively carry out bounty-related duties till the marketing campaign is dwell. Airdrop duties, then again, are a one-time occasion.
Plus, you must end smaller duties for airdrops, and also you don’t even want a particular ability to complete them. Nevertheless, you want particular expertise, time, and concentrated efforts for bounties. It’s because bounty applications are comparatively tougher.
The place to search out crypto bounty applications?
Bounty applications had turn into a phenomenon throughout the ICO and Bitcoin craze of 2017-18. A lot in order that some fraudulent initiatives began to emerge that had bounty hunters selling faux tokens. At one level, the Securities and Alternate Fee scrutinized a few of these applications resulting from their similarity with pump and dump schemes.
So, naturally, bounty hunters wanted to be extra particular with their seek for credible applications. So how do you discover good bounty applications? Most legit initiatives have a web page devoted solely to bounty applications, like Coinbase and Ethereum.
Nevertheless, bounty applications come below a authorized gray space – trapped between a advertising program and a pyramid-scheme-style fraud. Critics declare that corporations can make the most of these cheap campaigns, utilizing them to unfold the phrase about faux initiatives. Alternatively, bounty hunters secretly getting paid for selling a undertaking they aren’t even focused on it’s unethical, if not unlawful.
(Edited by : Priyanka Deshpande)