Bounty Programs

Bounty programs are used to incentivize work before an initial coin offering (ICO). And this bounty program is usually used by crypto-coin developers. Bounty programs are used by developers and marketers to incentivize work before initial coin offerings (ICOs). Simply put, a bounty program is a type of incentive offered to an array of participants for various activities associated with an initial coin offering. And an initial coin offering is the cryptocurrency industry's version of an initial public offering (IPO).

A company launches an ICO when the company is looking to raise money to develop a new currency, application, or virtual currency service. A company then launches an ICO primarily as a means of raising funds Here is a bounty program that provides rewards or tokens to participants who participate. Simply put, a bounty program is a reward or token awarded to participants who complete specific tasks that help promote an ICO. And this bounty program originated in the world of digital video gaming. Gamers are sometimes offered various benefits. Those who identify bugs in the game are rewarded through a bounty program for game development contributors.

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After an ICO, bounty programs are used to get feedback about the project's code from external developers who have it, and are therefore rewarded for promoting the coin to external developers or media channels for learning about the project's code. But the interesting use here is that the SEC has used ICO bounty programs as evidence of criminal wrongdoing because these bounty programs operate in a legal gray area between marketing and pyramid-scheme-style fraud.

However, the ICO market collapsed in late 2018 and 2019. The collapse of the ICO market has since dramatically reduced the number of active bounty programs. The participants that the bounty program has are spread across the various stages of an ICO. And this broad stage can be from investors to ICO promoters and developers. But here is an important point that crypto-coin developers should be wary of using them. Because bounty programs focused on marketing were used to promote fraud in the heyday of the cryptocurrency bubble.