Bitcoin Forum

There is a concerning trend over the last year to pay bounties in project tokens instead of BTC/ETH. This leads to market dumps almost always after the ICO due to bounty sell-offs.

In reality, it makes no difference for the team to pay in ETH instead of the token, and here is why: The amount raised in the ICO is usually in ETH. By sending 2% (or whatever the bounty was) from this project fund to bounty hunters, it makes little difference to the team, they still have 98% of their fund left. Furthermore, no market dumping can occur, and we no longer have to listen to the whining on telegram when the price drops below ICO like it always does.

Here is a fact: Nearly all tokens are dropping below ICO value when they hit exchanges during this bear market. The only people that are stupid enough to invest in ICOs at this time are new investors. Established investors will always wait for the token to hit exchanges and buy-up at a lower value during bear markets. This is because established investors realize a lot of free tokens get dumped after the ICO.

If ICO teams continue to payout bounties in their tokens, eventually all investors will cotton-on and no longer contribute to ICOs anymore. With everyone waiting for post-ICO exchange dumps, teams will no longer be able to raise any capital. As of now, retail investors aren't smart enough to realize this, but give them time, and they will, and this will effect the entire alt-coin sphere.

Simply payout bounties in ETH from the funds raised instead of the token. It literally makes no difference for the team, and it offsets the risk for everyone. This terrible trend of token payouts needs to end.

Your idea is very precise, I remember with the XUC exchange union project. If I'm not mistaken they pay campaign prizes using eth. This is very influential on token prices in the future, because there is no dump of the campaign participants and developers do not need to spend money to pump the price of coins. At ico the price of XUC is only $2.2 and the current price has reached $6.6 , very different from the project paying the campaign reward using its own coin. This is the best solution for the project to go according to plan and without any risk.

It is very good to be pay in ethereum and bitcoin when a company or developer hire people to promote his project but we have to understand that payment in they own tokens will help promote their own projects in the market. I think it will be selfish for one to said we should receive ethereum instead of they own coins or tokens.

It just seems like such an obvious solution to all the problems everywhere I don't get why the practice is not more widespread. No more telegram chat flooding or fear of bounty dumps, and no need to delay bounty payouts out of fear of said dumps.

But, for now, most of the ICO project is just for the sake of money, so they pay the token, they do not need to pay any cost, but if they pay the ETH, then can be converted into real legal tender.

This stuff has been mentioned several times and it seems the devs and the bounty campaign managers have turned deaf ears to it. The truth is that, this would keep happening until they find a solution, and investors are already drifting towards the pattern of waiting for it to hit an exchange first.

I always thought there is a way tokens are locked, but I do not know if this would have to be something general or you can decide to select the ones you are locking. Probably, someone could enlighten me on that, otherwise, it would just be for the devs to lock the tokens of bounty hunters until after a few period when the market is doing well if they do not want to decide to pay in Ethereum.

However, that payment in Ethereum would be the best bet, and any of the bounty hunter who would love to invest in the project, can go to an exchange after the payment to make the purchase and that becomes a win-win situation for everyone.

I am completely agree with this idea to pay bounty in Ether or BTC. And this is also good for bounty hunters not to wait the coins listed to exchanges to sell the coins for fiat money. And I think the developer team might thinking that with giving their coins , the liquidity of their coin can increase in the exchanges so that they can list their coin in big exchanges as well and the other reason is to give coins is to marketing the coin so that all people can know about the coin and project too. But I prefer to get bounty rewards in Ether or BTC.

I think your premiss is wrong, Instar tokens got listed in the market yesterday and was selling below the ICO price, interestingly they did no bounty campaign, so can you tell me who are those selling their tokens below the ICO price. It is a wrong assumptions to think all the bounty tokens go to the market immediately after the tokens was dsitributed. I still have some bountytokens in my wallet that is more than 7 months now that I have not moved and have sold some of my ICO investment immediately it enters market

The problem is the team don't wanna decrease their ethereum amount. The fact that the team was generating it through pay a little cost to the smartcontract and they are raised a lot of money. Not all of these icos interested to do that. Rather than think about to make the price of their token will be stable through pay the bounty through ethereum. And they are feeling better to see their ethereum still in the wallet.
XUC becomes a good example about that how the price of token gets stable anytime.

That would be great if all icos pay etherium instead of tokens because many of people here dont know how to trade tokens especially in etherdelta because its so confusing so it might be easy for us if you use etherium instead

I agree about etherdelta that isnt so userfriendly as it should be if they want to become a great exchange

I will not want to totally agree with your argument. This is based on the perspective of an investor but also looking at it from the angle of a bounty hunter, it is of two ways. For those bounty hunters who want to sell immediately the token get to them, it is always better to give them eth to even save them the stress of selling the token to get eth. But for those who have the intention to hold the coin for a long time, they will have to start making attempt to buy the tokens of which they would have gotten directly from bounty participation.

This is the best solution both investors and bounty hunters but project owners being greedy as always. They tend to cut as much as posibble from bounty pool if they had a chance. It is hard to believe even hundreds of millions collected icos are looking for several thousands to rip off from bounty hunters. Since no one has sanction power over project owners, this suggestion will pretend to be not heard.

This is a way too off for bounty hunters. The token we are locking does not belong to the team anymore since those are the bounty hunters' share. And, I believe same thing will happen after the tokens are unlocked, the bounty hunters will then dump it esp. the market has now stabled.


What more if they had a bounty-campaign-paying-tokens, right?

Thus, basically, helping the price to go up.

My last sentiment. I am totally agree with the OP.

A good idea! Many companies do so. It will also show that the team is really working on a good project and therefore is spending money on advertising. And for participants it will be nice to receive rewards every week.

Maybe another good option would be for bounty hunters to be allowed to choose if they want to receive the payment in ETH or in the ICO's token in this case.

This should be less of a problem in situations where the company:
1.  Already has an operating product or service before the ICO.
2.  Has created a real benefit to using the tokens if you want to use the product or service.
3.  Has created a mass market product where most token holders will be temped to use the tokens rather than sell them.

It's the decision of the developer to pay their bounty hunters a token because bounty hunters are also investors and has the knowledge about the project being part of their army in advertisements. Sad to say that most bounty hunters are not holding their coins and easily dumps when the coins hit at exchanges. I understand that not all coins are worth to hold but if you take to hold for 3-6 months maybe a better price at that time. Although, it's the prerogative of the bounty hunters what to do of his token besides in my opinion, the 2% allocation of token for bounty hunters can't influence the market price if their project is a real project.

You are assuming that some of these developers want their tokens to succeed. But a lot of them just want to get their hands on Ethereum, and don't care if the token crashes and burns, its the investors that take the hit.

Once investors stop being fools and stop participating in these ICO's, you might see a change in behaviour, but not till then. And the change will be reduced ICOs, not bounties paid with ETH.

Very well said, I agree entirely. I am also noticing the pattern is starting to begin where ICO investors are being more cautious. Such greed by project managers will negatively effect the entire alt-sphere when it makes nearly no difference for them to simply pay in ETH. The difference is literally insignificant for them, but huge for the "tokenomics" (to use the latest buzz-word) of their token.


I'm also in the same shoes as you, as I'm both a fiat investor and a bounty hunter too, so see it from both sides. The question is how do you tell which bounty hunters want to HODL the token and BELIEVE in the project they're promoting, vs those that just see their bounty as "work" that they need to convert to ETH immediately once the token hits an exchange?


It's unfortunate but true. ICO teams are raking in millions of capital when via traditional venture funding they'd receive exactly $0. And then they are so greedy they cannot even allocate 2% of their holdings to the people that promoted their project?


Excellent suggestion.


Herein lies the sobering truth. This is the sad reality of it.

My guess is that most ICO team sees their token as worthless token while ETH does have a real value so they try to spend Ethereum as little as possible. They know that over time, their token will most likely become worthless. That's why most of ICO teams are so eager to pay bounty with their own token instead of ETH.


Do you hold your token after receiving it? Well, the reason most people dump their token immediately is that most ICOs are shit and only selling whitepaper. Most ICOs are not going to make their promised product came true, let alone achieving the projected target and make profits. Only very very few are worth holding. It's a logical thing to dump their token immediately.

If the promotion campaign is payed in project's tokens then it usualy means that the team is lacking budget before the ICO. Also it makes bounty hunters more involved in the project. Personaly I'm fine with the idea of promoting ICOs with token rewards simply because it creates a competition and makes bounty hunters to learn more about current project. It shouldn't be just a free money for ctrl+v sig code.
I know that we all want to recieve fast payments in already established currencies but I'm sure that team doesn't care much about the token price before the launch of the project. If someone dump big amount of tokens then it is not their problem.

actually you made a good point. This is the same thing in case the coin is successful and have value after listing on exchanges. Because if not, it's not the same for them to send useless tokens instead of eth /btc

Damn! this is good topic. I just learned this theory.
It's good Idea if bounty hunters paid by BTC or ETH. So a dumper hunters can't ruin the price values of the tokens.
But i think its' difficult. ICO  team will feel their profits decrease if the hunters are paid with BTC or ETH

Yeah,  your definitely right,  most of the ico price drop after the ico ends,  and this will continusly happening again and again,  so this idea is more great and effectiveness if they implement to less worries on how the ico token drops by the massive dumptation.

I agree being paid with ETH but I do not disagree as well being paid in tokens because it gives me an opportunity to participate in the project first hand compared to just being an investor if I really like the project. Although, being paid with ETH would be a good solution to avoid the dumping after the distribution of bounty. I think this is the reason why some ICOs delay the distribution of bounties after some time because it wouldn't affect the price that much if the coin is already in the market for some time. It would be a win-win situation if this happened when more ICOs would pay its bounty participants with ETH.

I agree. An ICO team raised ETH funds. Tokens are free, because they control them. So, psychologically, they'd rather hand out tokens to bounty hunters than eth.

I think an ICO team really doesn't care about the price of their token in the short term, so they'd rather give those out.

To them, eth is money, while their token is simply part of their project. The ethical teams don't trade their own tokens, so it's less of an incentive for them to hand out eth if they can't use their tokens for liquidity.

And usually a bounty project using payments with BTC or ETH will be limited to its participants, This means not many people can participate because of using the quota system. I think there are positive and negative sides.

If i am not mistaken the only token ICO that did this is Oyster Token. The developer prefer to pay in Ethereum rather than token because he believes that his coin has a better value only to be dump by bounty hunters. Now the coin jump in unexpected high and have a stable price.

Paying in Ethereum will really make a lot of sense and at the end of the day, any bounty hunter with interest in the project will go to the exchange and buy rather than paying in tokens. However, since it is a norm and the devs are trying to also play safe, it would start giving investors different impressions about ICOs. There are so many tokens I have waited for recently to hit exchanges and then decided to buy them when they eventually dip, because it is becoming a normal trend.

I am sure a lot of campaigns are not thinking about paying in eth and if care is not taken, most of the things you have listed out is all that would end up happening.

For instance, I invested in adbank recently, only to discover its rate few days later, lower than the amount I bought during the ICO, and luckily, I had some funds, which was what made me to buy more. Sure, the market will recover, but if I see a good project, what I keep telling myself is to just chill and wait for it to hit an exchange, see the market reaction and then buy. Bear market or not, it happens most of the time.

Bounties are usually around 2% of the float and should be too small to tank the price post ICO if the project has built up a decent level of community support. The real culprit is the massive discounts offered to Pre ICO investors. I have seen Discounts as large as 70% over the ICO price. They can easily accept half the ICO price at the opening and still make huge profits.

I have had the same instance happening several times, and these days, I have been doing the 50:50 pattern for ICOs, which is more like, invest 50% during the ICO and if it keeps going up once it hits the exchange, good and fine, and if it drops far below the ICO, then I invest the remaining 50.

The OP is very right and if investors start seeing this trend, then we may end up seeing just few investors in the future. The only excuse some of them are giving now is that it is a bear market, so there is really nothing that can be done.

That is already known to be honest. The good projects should know that they are harming themselves when they pay bounties out in their own tokens, first of all because they know these tokens are going to be dumped. Second because they know bounty hunters can even sometimes gain a lot more tokens that investors, and investors who know this will stay away, or feel like an injustice has happened after bounties are distributed. Solve the issue and just pay properly.

I also want to get paid in ETH instead of these tokens that doesnt have good value after some time,keeping tokens in months wont give you any assurance that they will have some good value in the future,you are indeed right the ICOs should pay us with ETH as they have millions of funds on hand bounty hunters are the key to success that is why we should be prioritize in the first place.

I really do not know why as well and the earlier they find something to do about it, we may have to start seeing the era of ICOs going and every project will just have to hit the exchange first and any investor who cares will go there to make a purchase. It is becoming unbearable and I really do not know why bounty hunters do that, when of course, they should wait for the token value to increase. Well, they are always there looking for the quick profit anyway.

Ideas:

- smart contracts that lock up the collected Ether and releases a portion of the Ether at predetermined intervals, when reaching milestones (but how do you link real-world milestones to a digital contract?) or by community DAO mandate

- selling a smaller portion of the total amount of tokens, so that the issuing team has a bigger stake in the success of the token

- a variation of the lock-up idea: divide the ICO in phases and sell tokens when a new phase is reached, which could be after a predetermined amount of time, reaching a milestone or when approved by a DAO, for example when running out of money (but how do you monitor and control expenditure?)

The more I think about it the more my ideas start looking like shares with voting rights.

your idea is very exactly. I have joined some ICO projects and i realized that there are rarely investors invest in ICO now because they usually wait the falling down of tokens price when ICO finishes.  I think this is the most suitable time for the change. If not, ICO will be died.

Do you mean Oyster Pearl (PRL) right? Damn! I miss that train. I heard that ICO was succeeded.
I agree with OP thought. Sometimes, paid by the token is stressful if the project becomes failed like PINDIFY (https://bitcointalk.org/index.php?topic=2240238.0)today.

that was right, ICO project should pay their bounty participant with ETH or BTC that they raised rather than the token itself, if this system not implemented and ICO keep paying bounty participant with their selling token i'm sure smart investor would eventualy lost interest in ICO.

I agree with you. Previously, there were many projects that paid bounty hunters ETH or BTC instead of tokens. Now many organizers try to deceive bounty hunters with a reward and even professional coders offer to work for tokens.

not a bad idea in general! there is only a problem that the developers are hoping for those who will not sell their bounty rewards immediately after receipt. It is more interesting to distribute tokens and not money

I agree with you and your opinion is very precise and on point, many ICO's investors are the ones who are at risk in this dump in the market after the first listings in ICO''s im aware of this because I am also a bounty hunters but I don't dump that fast because I wait for the project to fully launch it's potential we can say that some bounty hunters are greedy and wants to earn money in a fastest and as soon as possible. That's the reason why many ICO's hate bounty hunters when it comes to the first listing of the ICO.

Here it is precisely noticed, so it will be much better and more favorable both to both parties. It is a pity that many do not think of it before.

I agree with your opinion. Campaign managers should read this article. I'm bored with selling tokens after the end of the campaign. I hope the bounty campaign will pay with eth or bitcoin.

Clearly stated and you really have a great point about this, because the investors are the ones who are being put in the risk once most of the bounty hunters dump their coin on the first day that the coins is listed in exchange instead of holding it and wait for the project to prove and rise to it's full potential, because clearly some great project really takes time for them to show their full capability in the market.

I agree with the author, devs should realize this before all ICO's investors start taking this situation seriously i think that most of the new investors got burned during this bear market and some of them think that all ICO's are scams.

2% of total budget isn't that much, so it can't dump prices. Moreover not all participants sell immediately after ICO. But paying in ETH is much more attractive for bounty hunters. Also I saw some projects which clarify in bounty, that they buy back tokens in ETH

Payments to signatory campaigners for their promotion of the ICO project in ethereum would be very beneficial to all ICO project participants and his team. This would save many problems from absolutely everyone. Those same members of the generosity campaign who would like to get the tokens could already at any time when the token goes down in price, buy it for the received ethereum. Either when completing the participation form, indicate what he wants to receive a payment - ethereum or released token. It would also be very convenient.