As the world of cryptocurrencies develops, new projects started to appear more and more frequently. It was a wonderful time when there were many people on the market with good ideas and not bad intentions. To create their product, these companies needed money to develop. Traditional methods of raising capital were poorly applicable to blockchain companies.
Vitalik Buterin found a way out. In mid-2014, together with Ethereum, he held one of the first ICOs in history, not everyone knows, but along with this ICO, the first bounty campaign was held.
Birth
Hidden or explicit advertising of the project from hundreds of unrelated people from all over the world in various social networks, gave a very good result, which, together with a very promising business idea by Vitalik himself, allowed his team to collect a colossal amount of 31591 bitcoins at that time (Exchange rate at that time corresponded to an amount of more than $ 18.4 million).
The resounding success of the world's first ICO made a splash in the world of cryptocurrencies. Vitalik Buterin showed everyone how to attract money to Ethereum and how, at relatively low cost, you can promote your project around the world in a variety of categories of people.
Therefore, it is not surprising that, after Ethereum, this a model of raising funds along with the new method of its advertising was adopted by all other startups in the cryptocurrency world. Thus began the crazy life of bounty campaigns as the most common way of advertising the cryptocurrency projects.
Finest hour
The high point of the bounty campaigns was rather short, it fell in the second half of 2017 and the first few months of 2018. Several factors contributed to its onset:
- The rapid growth of the entire cryptocurrency market that began in 2017. Due to this explosive growth, rivers of external money and thousands of new participants in this market poured onto the market.
- This gave rise to a kind of vicious circle - the injection of new money contributed to an ultra-fast increase in the value of cryptocurrencies - as a result, market participants received huge profits in a short period of time - this ever-increasing hype attracted new people with money to the market - this money poured into the market and contributed to further growth in the value of cryptocurrencies, thus the circle closed and continued to spin for several months.
All this money flowed into not only Bitcoin but also into hundreds of cryptocurrency startups that appeared on the market like mushrooms after the rain, conducted their ICOs, collecting tens of millions of dollars.
The presence of a large amount of money on the market made it possible for startups to enter the exchange and in the very first weeks of trading, the price of tokens/coins of these companies, which at the start of trading was already much higher than during the ICO, soared many times more to the top.
This allowed ICO participants to make a profit in just a few months, which was tens, and sometimes hundreds of times higher than the initial investment. The excitement around the ICO has become so great that at some point in time, to participate in the most promising projects was almost impossible, their coins/tokens were sold in seconds.
But what about the bounty campaigns?
Almost every ICO startup in parallel with ICO held its own bounty campaign to attract even more potential investors. The budgets of these campaigns were quite large, but the number of participants was not.
This allowed the participants of the bounty in 2017, making simple actions in the form of reposts, likes, writing their posts, simple articles and other things, to earn many thousands of dollars on one campaign. I personally knew people who in those days managed to earn from one bounty up to $10,000 at the same time, without investing a penny of their own money.
And earnings in the amount of $1,000 - $5,000 were not uncommon in those interesting times for active and smart people.
Death
The fame of big and easy money spreads fast. This fame was one of the main causes of death for bounty campaigns. Those who had money invested them in ICOs. But, there was an even greater number of people who did not have money but had a great desire to receive it. Get a lot and quickly, preferably not trying hard.
The huge earnings that the bounty participants managed to get during the period of the highest hype around cryptocurrencies attracted a huge number of poorly educated people from developing third world countries to this industry. This entailed the appearance in each bounty campaign a huge number of participants who generated a large amount of low-quality content, simply spam.
The number of earnings for participating in a bounty campaign depended on the number of subscribers on the participant’s social networks. The emergence of a large number of bounty hunters contributed to the spread of such a phenomenon as a mutual subscription.
Bounty participants began to identify themselves using hashtags on social networks (#followback, #follow4followback, and others) and using these hashtags to search for other participants of the bounty campaigns and then mutually subscribe to each other's accounts.
This led to the emergence of thousands of accounts with thousands and tens of thousands of subscribers who, in fact, were dead. Indeed, from the very beginning, the main idea of the bounty campaign was based on the fact that the subscribers of the bounty participants were real people. And these accounts were valuable, as they were viewed and read by real people who also wanted to earn easy money and invested in ICOs.
But there were also scammers. People who know the system and are well oriented in it began to break the rules in order to further increase their earnings through deception.
The most common occurrence among this was the creation of multi-account farms. This happened as follows: a person began to create dozens of accounts of fictional people on various social networks, then, using mutual subscription, he quickly increased the number of subscribers to these accounts, and then began to register all these accounts to participate in the same bounty campaign.
Once upon a time I personally had a small hobby and I was on the Bitcointalk forum searching for these multi-account farms. I did not do this for very long, but even that time was enough for me to find 2 farms in each of which there were 70 - 75 accounts! And farms with 5 - 20 accounts could be found in dozens.
These farms generated the content of the lowest quality and if the bounty manager was not attentive or did not take their work seriously (and often the bounty managers themselves were owners of these farms), then the fraud was successful.
At the peak of its popularity, I saw bounty campaigns in which up to 5000 people participated simultaneously, think about this figure and imagine how much spam these “people” generated.
The most interesting thing is that as a result of the factors which I wrote above, the effect of such a bounty campaign for ICO projects began to tend to zero.
But the industry gained momentum and did not stop immediately, a large number of participants in the bounty campaigns led to the fact that in order to interest as many participants as possible, the budget of the bounty campaigns was constantly increasing.
Especially with this was fraudulent ICO projects that launched bounties with simply fantastic budgets of 1 - 2 million dollars !!!
All this madness, both with the mad profits from participating in the ICO and with the huge earnings of the bounty hunters, could not last long. Along with the general decline of the cryptocurrency market in 2018, the ICO boom began to decline, and with it the bounty campaigns.
Little money remained on the market, and more scammers appeared. With each new failed ICO, which was accompanied by a large bounty campaign, startup leaders who planned to enter the market were convinced that there was very little practical sense from the bounty campaign.
For the bounty campaigns, the fame of the spam breeding ground was fixed. As of the end of 2019, new bounty campaigns practically do not appear, most of the remaining bounty managers are unemployed. And those bounty campaigns that continue to be held are mostly owned to some extent by fraudulent projects. The trend has clearly begun to appear in mid-2019 with every month showing itself more and more - the bounty campaigns are dying.
What's next?
The fact that something is wrong with the industry of the bounty campaigns, people began to understand at the end of 2017.
The first attempt to correct the situation was the appearance in early 2018 of automated bounty platforms similar to BountyHive or BountyOx. Partially, these sites solved the issue of multi-account farms, but they could not solve the problem of low-quality content issued by participants and their dead accounts with winded subscribers.
The effectiveness of conducting bounty campaigns at these sites still continued to strive for 0. As a result, they failed to achieve any great popularity on the market. And, in my opinion, following the traditional bounty campaigns, these sites will also be closed.
Some companies that needed marketing promotion of their brand or product, but which did not want to mess with the bounty, themselves tried to come up with their own ways of advertising.
Someone arranged bounty sections on their sites and conducted campaigns in them similar to traditional bounty campaigns trying to track scammers and control the quality of content, but this practice was not widespread because, on the one hand, it required companies to spend a lot of time on these campaigns and whose strengths were often lacking.
On the other hand, it did not solve the problem of dead accounts, since the main participants in these campaigns were still ordinary bounty hunters.
Other companies tried to advertise themselves by actively working with the community and on social networks, organizing frequent contests, quizzes, with valuable prizes. How successful these attempts were, depended on the experience and perseverance of the people who carried out this work in each individual company.
But the market does not tolerate emptiness and the empty niche of this area of digital marketing should have been closed. I understood that this direction of digital marketing could not completely die, it should have degenerated into something new, protected from all those diseases that hit the traditional bounty. But I could not imagine how this can be done in practice. I had no idea until the fall of 2019.
In the fall, I accidentally discovered the existence of DAO MAKER ICO agency, a company that provides digital marketing services to its customers. One of the most popular business areas of this company is the provision of social mining platform services.
The social mining platform is a decentralized autonomous organization (DAO), which is created separately for each client. The main objective of this platform is aimed, to reward the token holders of this company for any actions performed by the token holder that contributed to the success of the project. Every time a token holder performs an action aimed at promoting the company, the community votes on the value that this action brings to the project.
Subsequently, this token holder receives a reward in the form of company tokens commensurate with his contribution to the development and promotion of the company. For a company that uses a social mining platform, this is useful because it creates an ecosystem that allows the community of any project to effectively use their mutual resources to improve its token.
Each community action aimed at improving the effectiveness of the project is rewarded based on the added value estimated by the community of token holders.
Having familiarized myself with the work and principles of this platform, I was surprised to understand that this platform completely solves all the problems that destroyed the bounty compaigns.
In order to become a member of the platform, you must have and constantly store a certain number of company tokens on your wallet and often this is not a small number of tokens. This solves the problem of the invasion of hundreds of spammers craving for a quick profit.
Any action aimed at promoting the company for which the user wants to receive a reward should be registered on the social mining platform and other users of the platform together with company representatives will evaluate the degree of usefulness of this action. This solves the issue of the quality of the content that the community generates. If someone starts creating low-quality content, it will be immediately appreciated by community members and the user will not receive any reward for such activity.
Scammers will also not be able to create multi-account farms on the platform since on the one hand, it will require from the fraudster to acquire the necessary number of tokens in order to be allowed to participate.
On the other hand, it’s very difficult to simultaneously produce high-quality content for many accounts, and a fraudster simply won’t get anything for producing low-quality content. And finally, the platform itself provides several levels of protection against fraudsters, similar to tracking and mapping IP addresses of different users.
The DAO MAKER company appreciates its reputation very much and therefore starts cooperation only with the best companies that are guaranteed not to be scammers. These are like young, but already established companies that have already entered the market such as the Harmony Protocol, LTO Network, Elrond Network, Ferrum Network, and others.
In addition to the already held companies that have already managed to successfully conduct their ICO / IEO. DAO MAKER also works with young startups who are just starting their journey. The most striking example of such cooperation can be called a partnership with 2key Network, a mega-promising project that develops the technology of “smart links”, has managed to combine traditional HTTP links with smart contracts based on the Ethereum blockchain and multi-stage tracking capabilities!
This technology opens up completely new opportunities that were not achievable before in the markets of digital advertising, referral companies, and charity.
Unlike others, the technology of 'smart links' is compatible with both WEB 3.0 and WEB 2.0 which distant competitors 2key were deprived of. Smart Link initially keeps track of who provided the link, and if the link leads to a revenue-generating action, each member receives a share. 2key Network democratizes the distribution of values by improving what people already do: share links.
To support network requirements, 2key is built on its own Ethereum second-level solution, which suppresses the blockchain trilemma. In my opinion, the company simply has grandiose prospects.
For me personally, the social mining platform is exactly the evolution of the bounty campaigns that the market was waiting for. And the future of this digital marketing segment lies with the decision of DAO MAKER and possible analogs that may appear on this platform in the future.
Thank you everyone for reading
Thank you everyone for readingArtem Tsyganko
Artem Tsyganko