DEFINITION of Bounty Programs (ICO)
Bounty programs are incentives offered to an array of participants for various activities associated with an initial coin offering (ICO). The participants are spread across various stages of an ICO and range from investors to ICO promoters and developers. The incentives can take the form of cash rewards (usually rare) and free (or discounted) tokens which can be cashed in later when the tokens are listed on an exchange.
BREAKING DOWN Bounty Programs (ICO)
Broadly, there are two stages to an ICO. In the first stage, which is also known as pre-ICO, the offering is marketed to prospective investors. These include social media influencers, blog writers and Bitcointalk Signature Bounty marketers.
Social media influencers and blog writers make videos, write articles or spread word about the ICO on popular platforms. They get paid based on their content’s engagement with the audience. Bitcointalk Signature Bounty marketers are members of Bitcointalk, a popular discussion forum for crypto enthusiasts. They are required to post a signature with the ICO’s details in it and are rewarded with tokens from the sale based on their seniority in the forum. The channels form an outreach to multiple kinds of investors, from lay to institutional. At this stage, the content mostly deals an analysis of the blockchain and its merits and demerits.
Developers also receive a sizeable chunk of tokens as payment for their participation in coding the project. These tokens can be redeemed for fiat currency, when the tokens are listed on an exchange. For example, ethereum and Zcash both had substantial bounty campaigns in place for developers who helped set up the blockchain.
During the second stage, also known as post-ICO, the focus shifts to fine tuning the released blockchain. Bounty rewards are offered to translators, who help ensure a global reach for the blockchain by translating documents associated with development and marketing. Rewards are also offered to coders who test and detect flaws in the blockchain. The latter type of reward is known as a bug bounty. In practice, it is similar to rewards offered to hackers by the likes of Facebook and Google.