Bounty Programs and Their Negative Effect On Crypto Adoption
At first glance, bounty programs and token airdrops seem like a cost-effective way to promote an ICO and generate interest rapidly. Let’s look close though. Just how effective are these campaigns? Are they really generating high-quality leads or just promoting a culture of greed, laziness, and fraud? As a victim of a recent “airdrop virus”, YouHodler certainly has an opinion on the matter. If the crypto industry wants to experience true mainstream adoption, getting rid of unproductive bounty programs is a good place to start.
Why bounty programs and airdrops are morally unjust
Giving out “free” tokens to your followers for sharing social media posts, creating content and supporting your project in general, might seem like a great idea at first. Yet, one must analyze the aspect of quality vs. quantity. When ICO’s do airdrops and bounty campaigns, the bounty hunters that receive them do not have the same mindset as those running the ICO.
Sure, maybe a small percentage want to see the ICO reach its full form as a startup and want the team to succeed. However, most bounty hunters only care about free handouts. They hold the tokens for the minimum amount of time and then sell as soon as they can. As a result, this affects the value of the token and the token economy on the whole.
There are no moral values intact during this process. Airdrops only breed greedy behavior from profit focused individuals. Furthermore, it is fertile ground for fraudulent activity.
Airdrops are an opportunity for fraud
There are many bounty hunters who look for airdrops exclusively. Scammers are aware of this. One popular tactic is to bait bounty hunters via airdrops in an attempt to phish their MyEtherWallet private keys and eventually, steal all their funds. Since the majority of these airdrops and bounty campaigns are completely unregulated, it allows scammers to roam free and for uninformed bounty hunters to fend for themselves. For this very reason, we are now seeing an increase in jurisdictions and regulatory bodies (like the SEC)outlawing bounty campaigns altogether.
Bounty programs prevent innovation
There is nothing innovative about giving free tokens to people in exchange for low-quality advertising and spam. Those who manage these airdrop campaigns (and those that support them) are simply lazy. They want to grow their Telegram channel, social media platforms and name recognition in the cheapest, fastest way possible. Any successful business takes time and genuine innovation. Going against this logic never works and crypto is no exception.
Followers don’t always translate to success. Take the Ubex token sale for example. With the use of airdrops, Ubex was able to build a Telegram channel of 100k and over 60k followers on Twitter and Facebook. From the outsider’s point of view, this looks good. Yet, Ubex struggled to hit their hard cap with all these “loyal” followers.”
These users were not of high value nor do they care what Ubex is or what they will become. They want free tokens and Ubex wants a free ride to the top. Here at YouHodler, we do not support shortcuts and look down upon those who tarnish this industry with laziness.
YouHodler does not support the XRP airdrop
The reason we are taking such a hard stance on this issue is that YouHodler was recently a victim of an “airdrop virus.” Somehow, the word got out that signing up on YouHodler would mean 30 free XRP for each and every person. As a result, we were swamped with KYC requests from these free token seekers.
We want to make it very clear that we DID NOT start this airdrop campaign and will NEVER have one like it in the future.
There is a good reason we never had an ICO in the first place. We want to evolve hand in hand with the crypto industry. Regulation, innovation, and cooperation are the traits of the “Crypto Spring” and we intend to utilize those properly.
YouHodler will not rely on cheap airdrop promotions or bounty campaigns to attract a following. We’ve been fortunate enough to build a strong, loyal following thus far due to our technological innovation and our valuable partnerships. If we want to see the crypto industry reach its full potential, new startups in this space should start doing the same.