The Chinese-based DAD Chain (Decentralized ADvertising) project plans to build a distributed advertising economy, utilizing its own DAD blockchain in cooperation with the Ontology and NEO public blockchains. Ontology officially announced a partnership with DAD on July 26th 2018, and DAD Chain has been on the road promoting its project in conjunction with a community airdrop.
Online Advertising Problems
In its white paper, the DAD project asserts that the Ontology blockchain can be used to restore trust between the actors in the advertising economy, and thus tame some of the problems with the online advertising economy as it exists currently. These problems are said to include: fraudulent and invalid advertising traffic, and ad impressions that are generated by bots and not users; tensions between corporate advertisers and the platforms they advertise on; poor placement of advertisements in locations that have little or no effect, and; users that are excluded from advertising revenue despite supplying the time, bandwidth and computing power necessary to display and consume the ads. These factors drive users towards ad-blocking software and separate advertisers from their intended audiences.
Further problems are said to include lack of mechanisms to review and censor ads that are inappropriate for a user or region, and excessive amounts of corporate intermediaries between the marketer and the publisher, who siphon off profits from the ecosystem.
Much of the proposed value of the DAD project comes from eliminating fraudulent advertising traffic and impressions. The whitepaper devotes considerable space to algorithms and neural networks that are designed to verify clicks and user impressions to eliminate fraudulent ad spending.
User data can also be used to verify that ad delivery was accurate. However, because users are cut out of ad revenue in today’s model, most currently resist sharing information. DAD Chain aims to incentivise users to share their data by rewarding them with cryptocurrency. This will enable the platform to cross-validate its publisher and platform-collected data with user data for more accurate ad delivery results.
Users will register their identity using ONT ID on the Ontology blockchain. According to DAD, their behaviors will be anonymously recorded, and data businesses who wish to analyse user profiles will require authorization from the users themselves.
Additionally, users will be incentivized to participate in governance of the advertising network, by judging the quality of advertisements, and reporting desirable or unwanted advertising. Because ad publishers and advertisers themselves can also have verified accounts on the DAD network with their own credibility scores, feedback loops become possible, and all actors in the ecosystem become liable for their own behavior. This design is intended to increase trust and cooperation between advertisers, publishers, and users.
The DAD token will be a NEP-5 token registered on the NEO blockchain. However, the DAD project plans to migrate its token to the DAD blockchain upon launch of its MainNet. The DAD blockchain will use Ontology’s open-sourced VBFT consensus mechanism, that combines Proof of Stake, Verifiable Random Function, and Byzantine Fault Tolerance.
Use cases of the DAD token include: Payment from advertisers to publishers and users; staking and payment for block producers on the DAD MainNet; and voting rights for content quality and blockchain administration. Half of the total supply will be initially released to launch the DAD economy, with another 25 percent released in the second year. All tokens will be in circulation by the fifth year.
The DAD project plans to release a technical prototype on the Ontology TestNet as well as an SDK for developers in the third quarter of 2018. Launch of core features on the DAD MainNet is planned for the third quarter of 2019. The project’s goal is to have a next-generation distributed ad network in 2021.
More information on DAD can be found at the links below.
Written by Colin Closser
Colin Closser, M.D., was a speaker at the first NEO DevCon in San Francisco. A devoted contrarian, he has managed the improbable: a peaceful and healthy life, despite holding a medical degree. He aspires towards the wisdom of Michael Lewis and Nassim Nicholas Taleb.