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5 Ways to Get Free Tokens. How to Make Money on Airdrop and Bounty Campaigns

Who and why is throwing the coins around during ICOs? Is it legal on the U.S. territory? Do you have to pay taxes? And if yes, what taxes? You will find the answers in this article.

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Cryptoassetsrank.com Published on Jun 29, 2018
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Who and why is throwing the coins around during ICOs? Is it legal on the U.S. territory? Do you have to pay taxes? And if yes, what taxes? You will find the answers in this article.

Airdrop: why are ICOs throwing the coins around?

What is an ICO airdrop? An airdrop is a free distribution of tokens by the ICO organizers either for nothing or in exchange for:

  • signing up on the website;
  • subscribing to the Telegram channel;
  • subscribing and making a repost on social media.

You can find the information about the ongoing airdrops in a specialized thread of the Bitcointalk.org forum.

Developers’ benefits. Free tokens is a cheap and effective way to attract attention to the project. Several thousands of tokens distributed during the initial emission will not harm the project and will attract the beginner investors.  

Participant’s benefits. You can get free tokens in exchange for several minutes of your time, in order to sell them later at cryptocurrency exchanges.

Advantages
Disadvantages
a chance to get cryptocurrency for free;
if the project fails, nobody will get the tokens;
anyone who has a cryptocurrency wallet can take part in an airdrop;
after getting listed on a cryptocurrency exchange, the price of the coins of the majority of ended ICOs drops;
just 2-3 minutes of your free time are enough to get free coins.
there are a lot of scammers who are taking advantage of the agiotage.

Bounty: what do ICO organizers reward freelancers for?

What is an ICO bounty? A bounty is a reward for helping with the promotion of blockchain startups during the initial coin offering. In order to get the coins during such a campaign, a user is required to perform one or several tasks:

  • to write a promotion post on social media;
  • to translate the documents or the website into other languages;
  • to create a topic about the project on a specialized forum;
  • to write an article in a blog;
  • to make and share a promotion video;
  • to use the project logo as a profile picture at the Bitcointalk forum.

An example of reward distribution during the REPU ICO bounty campaign

The reward for such actions is higher than that during an airdrop, that is why the number of those who would like to participate is much higher than the number required by the ICO organizers. In order to select the best freelancers, the developers announce the launch of a bounty campaign and offer those who wish to book a place or to take part in a tender.

In a tender they select experienced marketing specialists and people with fully-functioning accounts on Twitter, Telegram, Facebook and Bitcointalk.org. It is important to have a fully-functioning account because the more friends and subscribers a freelancer has, the higher is the marketing effect from his or her actions.

ICO organizer’s benefits. Raising awareness of investors about the startup for a minimum amount of money. The developer pays with fiat money only to the bounty manager for checking the reposts, content posts and the correctness of the translation.

User’s benefits. A user can receive the coins of a high-potential ICO and sell them later at the cryptocurrency exchanges.

Advantages
Disadvantages
the reward is much higher than that in the airdrops;
if an ICO fails, the time spent will not be recouped;
a chance to take part in the development of a promising project, which can later be mentioned in the CV;
fully-functioning accounts on social media or freelancer skills at copywriting, translation or video marketing are required;
you can participate by yourself or together with your team.
a lot of time is required.

Other ways to get free tokens

Affiliate programme. You get a reward for attracting new investors. It is one of the most effective ways to make an ICO successful because it is aimed at a certain useful activity, namely: raising funds for a startup.

Advantages
Disadvantages
a chance to monetize the traffic of your website and social media pages;
irregular income — it is difficult to predict the investor’s actions;
the reward size depends on the number of attracted investors;
a high risk to spend time and not to get any profit if an ICO fails or there are no referrals;
you can start making money without having to invest money.
high competition


Bonus distribution is a distribution of coins to the website visitors. They are referred to the website in order to increase the website traffic or to attract attention to the promoted or sponsored article. The size of the reward is small (5-25 cents), and the number of the visitors it is given to is limited to the first 100 or 1,000 people.

Advantages Disadvantages
requires minimum of time;
small bonuses;
does not require any skills or initial investments.
you should be among the first free token hunters in order to get a bonus.


Advisor’s job. ICO organizers pay in tokens to the experts who help them to develop and promote the project. To become an expert, you need to have a large experience in IT or marketing.

Advantages Disadvantages
the biggest reward;
it is impossible to submit an application and become one of the project advisors; the advisors are invited;
a chance to participate in the project development.
you should be an expert in blockchain, marketing or finances.

Is free token distribution legal?

According to the report of the U.S. Securities and Exchange Commission (SEC) of June 25, 2017 about the investigation of The DAO crypto startup, the initial coin offerings on the territory of the USA are equated to the issuance of securities. That is why all the ICO organizers must register their coin offerings and token sales, only if the startup fails to undergo the Howey test.

The test includes ICO checkup by the following three factors:

  • there are investments of money into a startup;
  • there is a reasonable ground to expect profit from the investments;
  • the profit is gained from the efforts of third parties (ICO organizers).

Ended ICOs by countries

If a startup has failed to undergo the Howey test, all free tokens that have been distributed by its founders are equated to the securities and get under regulation by the SEC. It means that the investor must pay the personal income tax:

  • a standard tax — from 10 to 37%, if he or she owned the coins less than a year;
  • a static tax — 24%, if he or she owned the coins over a year.

This tax applies to all cryptocurrency transactions, wherever there is increase of capital. The Americans must pay taxes for such transactions, whether or not the ICO is American or foreign.

How to crank out the earnings during airdrop and bounty campaigns?

In order to create a constant and safe flow of income from free token distributions, you should:

  1. Create a separate email box for subscriptions.
  2. Create Bitcoin, Waves and Etherium wallets. Most of the ICOs use these blockchain platforms for launching their startups. The address of a wallet at the cryptocurrency exchange must not be used.
  3. Register and develop accounts in Telegram, Twitter, Facebook, Bitcointalk.
  4. Аdd to your bookmarks (favourites) the rating of ICOs with free tokens and use it for searching and selecting high-potential projects.

You can track the news about airdrop and bounty campaigns at:

  • BitcoinTalk — the main place where the blockchain community meets;
  • Airdropalert — the news and the list of ongoing airdrops;
  • Coindar — a calendar of events in the cryptocurrency world.
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