The AmaZix community is our favorite success story. They are why projects want to associate with us, recognizing the powerful networks that the community commands. Our community is a chief driver of our direction and continuous evolution of the unique AmaZix brand of crypto marketing.
The participants of the AmaZix Community Rewards campaigns are the visible front of partners and projects, building awareness, disseminating content and promoting use, ensuring valuable knowledge is transferred and important discussions take place.
While we believe that the future has never looked brighter for blockchain and cryptocurrency markets, the market conditions during the majority of the year have made their effects felt on our Community Rewards participants. The price of cryptocurrencies and tokens continue to plunge to new depths as we speak, sapping investment appetite for new projects and diminishing returns for rewards.
At AmaZix, we’re well aware of the problems campaigns have increasingly encountered over the past few months, affecting their suitability as solutions for those looking to help raise awareness of the projects AmaZix works with. Our community — you — constantly give us feedback and we continuously adapt to the needs of projects and participants: the redesigned AmaZix Community Rewards in May was one significant result of community dialogue. More recently in July, we introduced several improvements to our moderation policies based on constructive feedback from you.
Clear and present complexities
The crypto market appears to have entrenched itself in a long “crypto winter”. Despite AmaZix working proactively to preempt the difficulties that projects are facing in fundraising, such as taking greater measures to ensure prompt and timely payouts for rewards participants, much decision-making and management actions remain with project teams and are beyond our control.
Some of the issues and challenges that have presented themselves as the year wore on include:
- Significantly longer fundraising and token sale processes, as more projects have needed to delay their token sales, while others have elected to extend theirs.
- Greater difficulty raising funds, partially due to a reduced appetite for investment in market conditions, and owing to regulatory restrictions on capital. More projects have been unsuccessful at reaching their soft cap, and it is likely a portion of projects will continue to be unsuccessful in this regard.
- Disparity and uncertainty in token monetization value. Participants intending to liquidate rewards once received often cannot estimate the value or volume of liquidation — an important factor for many when deciding whether or not to participate.
- A minority of projects AmaZix has worked with have unfortunately failed to fulfil conditions on their end with regards to payout issuance and timelines.
- Some projects have continued to run into legal or KYC issues surrounding token issuance or distribution to participants.
- Ultimately, rewards program participants are too frequently not receiving suitable compensation in a reasonable timeframe.
Protecting rewards participants
AmaZix heavily vets projects before agreeing to partner with them. All projects are required to go and pass a rigorous assessment before AmaZix brings them on board as a client; the vast majority of projects don’t even make it past the initial assessment stage. However, passing our thorough assessment is no guarantee of success, particularly given the extenuating factors of bearish sentiment and market exhaustion.
And when things don’t quite go to plan often for the reasons indicated above, it is not lost on us that reward campaign participants have all felt the effects to some degree. While it serves no benefit to square the blame on parties responsible in the past, AmaZix accepts that it has to negotiate for more degree of control over certain decisions, particularly with payouts and schedules, to minimize the risk borne by rewards participants.
It is in recognition of this that we are taking firm action to mitigate these issues and reduce the risk of them occurring again. We have engaged in active discussions with existing partners, while opening new conversations with potential ones, to seek mutually acceptable solutions.
What the solution might look like moving forward
Initial conversations we have had suggest that projects electing to pursue a rewards campaign with AmaZix could be willing to consider certain changes to the current structure of Community Rewards. Some of these considerations include:
- A possible escrow mechanism which will involve a project collateral in native tokens (for projects already generating the tokens prior to their sale). This will address the issue of diminished or zero returns in actual amount of tokens distributed to Rewards Participants.
- The possibility of setting aside a portion of rewards in liquid currencies (such as USD, BTC, ETH or other liquid and actively traded asset), rather than the existing model consisting entirely of native tokens. This ensures Rewards Participants have more predictability in estimating the value of rewards.
- A deposit of liquid currency (BTC/ETH/USD) as project collateral which will be held in escrow for projects that still choose to reward participants solely in native tokens. In the event payouts are not achieved by agreed time frame, AmaZix can decide to distribute collateral to Participants instead.
- Additionally, AmaZix will take further steps to ensure rewards promised to participants aren’t withheld or delayed through a variety of possible mechanisms including continuous distribution of tokens/funds, rather than waiting until the end of the token sale.
This is not a guarantee that all projects will elect to go down either route, nor does it imply that they are financially capable of the second or third options, as this decision will require budgeting of hard costs to their marketing and promotion activities — the nature of startups going down the crowdfunding route via token sales already indicates limited capital resources.
Particularly, with the options involving liquid currencies, there will need to be a collaborative effort to examine and determine what the appropriate levels hard currency collaterals should be. AmaZix has already begun this process of evaluation internally, as well as through discussions with partners, but we are well aware of the need to consult the community to help us define what these levels will be.
A Community Survey for Community Rewards — We Want Your Thoughts
As such, we will be conducting a community survey that we hope our Rewards Participants will use to inform us of their opinions. We will collect the responses for a period of two (2) weeks, after which we will evaluate and analyze them. It is hoped that this will help inform AmaZix and projects of what the suitable levels of hard funding for collateral might be.
We ask all Rewards Participants to complete the survey at the following link: https://form.responster.com/bkVOkD
We urge you to consider the questions carefully and provide realistic answers, bearing in mind that your responses will not necessarily determine the exact course of action we eventually take.
Our commitment to value
There is a clear — if not quantifiable — value that rewards participants offer to projects. AmaZix intends to safeguard and protect that.
We believe these actions under consideration will help ensure rewards campaign participants are compensated fairly and in a reasonable time frame. We also believe they will help ensure some of the problems encountered on past campaigns outside of our control won’t happen again in future campaigns.
Do note once more these actions may not take place immediately, if at all, and that we will not be able to apply these new actions retroactively and can only enforce them on all new campaigns going forward. All projects that already have an active rewards program managed by AmaZix will not be obligated to adopt the new terms.
We ask for your patience and understanding.