The Taboo Surrounding ‘Ref’ Links in Crypto
The ‘Ref’ Link
At some point or another, everyone in the crypto space will have seen or used a ref link to sign up to a new exchange, service or platform. But what exactly are they and why is there such a taboo about them? This article will help shed some light on what they are, how they work and why they have such a bad reputation.
The ‘ref’ link stands for referral link and is a form of affiliate marketing. Coming from a digital media background I’ve been privy to how affiliate marketing works and why it’s such an effective tool for generating sales.
Affiliate marketing is all about helping a company make a sale and being rewarded for the help that you have provided on route to the sales conversion. Most businesses will have an entire affiliate marketing section on their website which is always easy to find.
My personal experience involved working with Sky and Virgin, the telecoms giants. They have entire teams dedicated to affiliate marketing including setting up campaigns, reporting and optimizations.
The best example to use for explaining how this works are the now extremely popular comparison sites. In the UK when you’re looking to change your internet provider you will most likely use a site like uSwitch or GoCompare (yes the one with the incredibly annoying adverts) to compare all available offers then find the best deal for you.
The site asks several things such as your post code and what additional features you would like, then provides you with the best offer tailored to you. The deals on these comparison sites are often better than if you were to go on the site directly (I’ve just saved you some money here so you can have this tip for free).
If you go on to make the purchase via this comparison site, then uSwitch have essentially aided Sky or Virgin in gaining a new customer. It is because of this that uSwitch will be given part of the total commission for the sale e.g. if the customer goes on to take the £60/month or £720/year package then they could take 5% of that £720 meaning a tidy £36.
Crypto Marketing and the Taboo
So what does this have to do with Crypto?
Well this is the exact same process for ref links from exchanges and other platforms.
Let’s look at the Binance ref link for example. If you share your referral link and get a friend to sign up then you will get a percentage of the trading fees that Binance charge that friend when they make a trade.
And here lies the Big Taboo which I’ll now do my best to quash.
There is a common theme in Crypto that everyone is out to get you. You have to go to extreme measures to protect your keys, your identity and whatever private information you want to remain hidden from potential hackers and other nefarious characters who are destined to steal your hard-earned coins.
I believe this is one of the contributing factors to why people are apprehensive when it comes to ref links as it’s something they may not necessarily trust.
Others, I think, believe that people ‘shilling’ their ref links just want to make money from them.
Herein lies a common misconception.
When you sign up using a ref link you actually, more often than not, get a better deal then if you were to sign up directly on the site as there has to be an incentive to use this referral link. You will most likely get a sign-up bonus or reduced trading fees for the first few months that you trade or use the platform that you’ve signed up to.
The other misconception is that the person who has given you the ref link is directly benefitting from YOU. This is not the case! The person who has given the ref link benefits from the money that the EXCHANGE was going to make from you anyway.
For example, let’s say that you sign up to Binance by going directly to Binance.com and creating a new account. They will then take 100% of the trading fees that they charge for you to make your trades. However, if you sign up via your friend’s referral link then Binance will receive 60% of those fees whereas your friend will receive 40%. You are essentially helping your friend rather than the exchange.
So, the reality here is that you will actually be better off using a ref link than going direct. It is for this reason that I will always purposely ask for someone’s link if I’m signing up to a new platform as there are three winners in this scenario:
- The person signing up gets additional benefits such as sign-on bonus or reduced trading fees
- The person giving the ref link makes a small profit as a sign-on bonus or part of the trading fees that the exchange was always going to take
- The exchange or platform gets a new user
I hope this has helped clear up some of the confusion surrounding this Crypto taboo.
Thank you for reading.
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