This interview is part of our new Blockchain In Advertising series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and advertising.
In this interview we speak with Dimo Stoyanov, COO of AdEx Network, to understand how his company is using blockchain to transform the advertising business, and what the future of the industry holds.
1. What’s the story behind AdEx? Why and how did you begin?
DS: It all started in the beginning of 2015 when the Chinese technology company Bitmain invested in our first product – the video streaming platform Stremio. A year later, Stremio gained enough traction so we started exploring monetization options. The easiest way to monetize Stremio was through advertising.
That was our first interaction with ad networks and the experience was very disappointing. We found that centralized ad networks can easily manipulate the results, have no transparency in their reporting and do not hesitate to deliver false data.
In that time, we already had a good understanding of the main blockchain technologies and the advantages they provide, so we've decided to build our own decentralized advertising solution. We made the first announcement about AdEx in late 2016 and become one of the first companies to introduce advertisement on the blockchain.
Our goal to build a decentralized ad exchange evolved into building an industry-wide solution for decentralized digital advertising as AdEx is today.
2. Please describe your use case and how AdEx uses blockchain:
DS: The AdEx protocol is a system of software components that combines blockchain, payment channels and cryptography.
We use the Ethereum blockchain and smart contract technologies, and payment channels to provide publishers and advertisers with transparent reporting through per-impression micropayments.
That lets advertisers spend 100% of their budget on ads and not on commissions and intermediaries, and provides publishers with higher revenue. With other words, there is no way to cheat and everyone gets his share.
Using blockchain in such a use case is very beneficial for all parties, but it is very challenging, because blockchain operations are slow and expensive. This is why we have developed the “layer 2” scaling solutions that allow transactions to happen very fast off the blockchain, and push them on-chain when needed. We call it “OUTPACE” – off-chain unidirectional trust-less payment channels.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
DS: Since we have launched the AdEx network in the beginning of the year, we have successfully onboarded number of companies.
Maybe a bright example is NordVPN. In 24 hours they have generated sales resulting in a ROI of 238%. You can find the case study on our website.
4. What other blockchain use cases in advertising are you excited about?
DS: Currently there are not many projects trying to utilize blockchain in digital advertising, because it is not an easy task and can be approached from multiple angles.
We keep an eye on the Brave Ads, Lucidity and also CodeFund.
5. Where will AdEx be in 5 years?
DS: The past 2 years were very productive for us and yet a lot needs to be done. In the next 5 years, we'll be focused on product and business development.
In the upcoming quarters, we are planning to launch privacy-preserving behavioral targeting that stores data only on the user’s browser. We will release the “AdEx Lounge” – a user-facing panel where users will be able to see and modify the data that the system collected about them.
We are also planning to launch a staking mechanism, which will allow third-parties to become validators which will make the network more stable and secure.