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​Why Bounty is ruining projects
BlockMania
特邀专栏作者
2020-03-23 10:19
This article is about 2879 words, reading the full article takes about 5 minutes
The bear market exposed major problems related to bounties.

The author of this article is BM of DAO Maker, translated by BlockMania.

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Bulls successfully mask problems with bonuses

In the early stages of a bull market, projects can often easily reach their hardcaps by launching huge bounty campaigns and airdrops, because at the time, the industry was still made up of the earliest backers, many of whom had grown from BTC’s huge gains obtained substantial profits.

Once the bull market phase passed, early holders continued to stick to BTC, but new participants began to become interested in ICO in order to obtain the growth of BTC trend that year. They believe that the value of Token can be measured by "usage rate", so the potential of the project is related to views, followers and subscribers. It was this period that created the golden age of bounty campaigns, with monthly bounties hitting seven figures. Most of the investors who flood into the crypto industry judge projects based on these numbers (which are extremely easy to falsify). The influence of shouting single trolls is much greater than it is now, so some projects convince investors that this is a good project by allowing hundreds, thousands or even tens of thousands of people to be falsely active in the project community.

So it has become so easy to build FOMO (fear of missiong out, "fear of missing out") through false prosperity that some projects are willing to set up bounty pools worth hundreds of thousands of dollars. In addition, since even the worst ICO projects in this period can gain large votes of investors (thus also bringing about zero return), the project founders ignore their responsibilities to investors and are willing to return most of the Tokens as bounties Let it out.

The frenzy of the bull market has covered up funding problems, and it has also created unreasonable Token distribution methods and inexperienced investors.

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After the bull market, bounties start to fall apart

Once novice investors lost their fortunes and exited cryptocurrency investing, the surviving minority and early veterans criticized the practice for diluting the token supply. Rewarding a few percent of the token supply to create a false boom can be the most straightforward way to start, but giving a lot of tokens to people who have no stake in the project will just lead to a massive dump of tokens, which are often Inability to deliver high-quality output. For bounty hunters, the bull market provides short-lived scams, allowing them to participate in each bounty campaign and dump the tokens they get as soon as possible.

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Number of concurrent events for bounty hunters (Tokpie.io)

As the numbers above illustrate, a large number of bounty hunters participated in more than 100 events at one time. These bounty hunters may realize that bounty campaigns are short-lived and take advantage of the opportunity to profit.

This counterproductive form of decentralized work faces a problem: people have no vested interest. In the traditional, centralized value creation process, such as being hired by a company, employees want the company to succeed, because they only work full-time in one company, and their livelihood is closely related to the success of the company.

Bounties, however, are ephemeral contract-like opportunities with little oversight of the outcome, thus feeding the illusion of decentralized work when in reality it is just a loose generative engine. Decentralized work does exist in the fast-growing "gig economy" sector, but such traditional flexible employment rigorously analyzes work outcomes and:

1) run on expensive centralized platforms which makes them unviable for cryptocurrency startups

2) Does not involve paying with tokens that have not yet been minted

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it's a broken system

It's important to realize that bounty hunters are not the culprits. Project creators who made tens of millions from ICOs need them for their false prosperity, and bounty hunters just make the most of the opportunity.

The culprit is actually this twisted system, because its design has nothing to do with building an active discussion community around development that adds value to the project.

After the beginning of 2018, the bonus is not worth it

From July 2018 to June 2019, according to analysis by Topkie.io. The average bounty hunter earns $90 per month. Promised rewards tend to lose 90% of their value due to the poor performance of projects utilizing bounty campaigns, meaning someone hoping to get paid $900 ends up only getting $90.

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The Right Posture for Decentralized Value Creation and Work

The rare opportunity of this era is that people can create value for a startup company that is rising and disrupting traditional industries without joining the team full-time. Such opportunities should only be opened to active supporters (aka Hodlers).

Hodlers have a vested interest in the unique skills of these community members bringing high-quality value creation to projects, not just vanity numbers. To organize the value creation of such decentralized hodlers, DAO Maker has developed "Social Mining", a pluggable software solution that allows projects to reward hodlers for contributing to the ecosystem while retaining blocks The decentralized nature and openness of chain development.

This system turns a typical passive community into an active hodler, driving project growth. Social Mining allows users to stake their tokens as proof of vested interest, provide value-add to the project, and then validate each other's work through their personal dashboards. The more Stake a user puts in, the more "validation power" he/she gets, because people who put in more are more motivated to reward the highest quality work. So this also adds a new function to the token, increasing its utility and potential. Verification capability also includes other metrics, such as "sustainability of producing high-quality work", building "verification capability" with multiple dimensions can motivate the most talented people in the community to invest more time and bring core to the project increase.

Of course, before starting work on the platform, you need to meet a minimum Stake requirement (the amount is different and determined by each project). The important thing is that the longer the user holds, the greater the weight of his stake, so long-term holders get more verification capabilities. This establishes a sell-proof incentive mechanism, while also rewarding small casual users who have a long-term interest in the development of the project, thus truly capturing the democratizing spirit of the blockchain.

Therefore, the ecosystem becomes the growth engine of the project, a DAO form dedicated to personal growth. All participants who contribute value to the platform are judged by other participants, and everyone works towards a common goal to make the ecosystem more valuable.

In the past year, many high-quality online AMA activities have been held around topics such as the blockchain market, technology, and applications. Welcome to pay attention.

BlockMania is a blockchain consulting think tank, aiming to bring the deepest cognition and thinking of the blockchain industry to the industry and the public. Just like the blockchain, we believe that each idea has the possibility of becoming a node by connecting to other ideas, so we want to build a platform that connects ideas from points to lines, and from lines to a network.

In the past year, many high-quality online AMA activities have been held around topics such as the blockchain market, technology, and applications. Welcome to pay attention.

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