For every additional $1 spent on reward programs the overall raised amount increases by $8 to $15.

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The proceeds from a virtual token crowdfunding event appear to directly correlate to the size of their bounty campaigns, according to a report of US-based consultancy firm Element Group on digital currency markets, released on Tuesday.

The researchers examined data from 164 ICOs that employed bounty programs and found that every additional $1 spent on reward programs increases the overall amount raised in the coin offering with $8 to $15. The analysis covered crowdfunds completed within the past 12 months and took into consideration, among others, the token sale’s hard cap, overall proceeds and price per token.

“Naturally the size of a project dictates the commitment to the bounty as well as the amount raised in the token sale, but interestingly, even when controlling for these and other factors, the aggregate effect of a bounty campaign on the overall amount raised in a token sale is still significant,” Kevin Lu, director at Element Group, explained.

Digital start-ups often launch bounty campaigns along with a token fundraising to attract attention to the blockchain project, to improve its presence in the digital space, to help correct technical weaknesses, etc. Participants are asked, for example, to write articles about the ICO, promote it on social media and report on bugs in the software, usually getting in return virtual tokens and, in rare cases, fiat money.

Stan Miroshnik, CEO of the advisory firm, commented that the cryptocurrency space is now evolving from the “massive main sale model” that prevailed in 2017 and he highlighted the importance of analyzing and making sense of token crowdfund models.

Notably, Element itself is engaged with carrying out ICOs and also provides technical support for token-related transactions.



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