Explained: What are Crypto bounty programs and how it works

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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.Also Read | All you need to know about the chess NFT marketplaceBug 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.