AdEx is a decentralized platform that brings new levels of efficiency when advertising on the internet.
The amount spent on advertising is expected to fall by 11.8 percent to reach roughly $500 billion this year. While the print media and other subsectors in the advertising industry record a decline in monetary expenditures, digital advertising is gaining momentum. Digital advertising, unfortunately, brings solutions and problems in almost equal measure.
Part of the problem is that malicious parties conduct cookie stuffing, traffic fraud, impression fraud, among other scams to steal from legitimate ad campaigns. For the most part, fraudsters inflate metrics used to measure ad campaigns, tricking a company or individual into spending more.
Systems have been built to curb ad fraud, but fraudsters still find a way to rig the game. But there’s a solution using a technology that provides immutability like blockchain. AdEx is an example of such platform.
The Genesis of AdEx
AdEx was conceived in 2016. The founders conducted a crowdfunding round in mid-2017 to raise funds to kickstart the project’s development. And in early 2018, the platform was in the beta stage.
By 2019, AdEx protocol’s version four was launched, followed by a stable version of the network in June 2019.
Ivo Georgiev leads the AdEx team as the CEO and Dimo Stoyanov as the COO. The team is comprised of blockchain security experts, developers, marketing officers, designers, legal advisors, and other experts in different fields.
What is AdEx?
AdEx is a decentralized platform that brings new levels of efficiency when advertising on the internet. The platform’s key areas of concern include ad fraud, transparency, and user privacy. AdEx sits at the intersection of end users, publishers, and advertisers to allow trading of advertising time and space on websites and other online platforms.
The protocol uses a combination of blockchain and conventional P2P technology to power payment systems to provide a comprehensive experience. Apart from intersecting the three crucial pillars of advertising, the network provides a fool-proof way to verify that ads’ traffic actually happened and deliver real data. The platform supports all classical ad/banner sizes, such as 300X250, 160X600, and 728X90.
Advantages of AdEx to publishers
- No fees needed – Publishers are the online platforms where ads appear. They aren’t charged a dime. With AdEx, publishers connect directly with advertisers, removing third parties, and increasing revenue in the process.
- Protection against fraudsters – Fraudsters have remained one of the biggest problems in digital ads. The platform provides a direct link between advertisers and publishers, thereby removing any weak link that may trigger ad data manipulation. Also, the platform uses independent validators to check the validity of ad data, such as impressions.
- Guaranteed payments – AdEx employs micropayments that publishers receive for each impression. Also, there’s no maximum on withdrawals.
- Publishers are the bosses – Publishers have control over their ad spaces. This means that they can choose what type of ads to display on their platform and form which advertiser.
- Privacy is guaranteed – Cookies are the battlefields when it comes to cookie stuffing. However, with the decentralized protocol, cookies only live in the end-users’ browsers. To enhance privacy, AdEx uses an in-house SDK that allows the system to learn about the end-user without disclosing their information.
Note that to become a publisher, a site should never reward random ad views or clicks, have no automatic refreshing, and should not exclusively be meant to display ads.
Advantages of AdEx to advertisers
- Active monitoring – The protocol allows advertisers to interact with data in realtime. As such, advertisers can decide what’s working and what isn’t.
- No unnecessary overhead fees – In the case of third parties, the advertiser incurs superfluous expenses. However, with AdEx, advertisers only pay what they owe, and without a minimum deposit.
- Pay per impression – Commonly calculated as cost per impression (CPM), AdEx allows advertisers to pay for real interactions with end-users. They are also able to track users in terms of sex, age, and affinity.
- Access clean traffic – AdEx provides functionalities such as blacklisting users who are presumed to provide bad traffic. Impressions from blacklisted individuals are ignored.
The network counts one impression per unique visitor per five minutes. Also, the visitor has to spend at least five seconds on the page, and the ad is on the active area of the page.
How AdEx works
Six core parts power the network. They include:
The AdEx Core
This handles everything that enables the system to reach a consensus through decentralization. This includes paying publishers. The core employs a unidirectional payment channel with a single advertiser accounting for a single channel.
The market system is developed using the REST commands. Part of the market roles includes facilitating trading, demand, and supply. Also, it hosts all active but valid ad campaigns and handles queries from publishers and advertisers.
Software Development Kit (SDK)
The SDK provides better targeting by interacting with the end-user.
Being a decentralized platform, validators are needed to validate things like impressions. To reach consensus, 2/3 of the validators have to agree on a record before it gets committed to the chain.
Graphical User Interface (GUI)
It provides publishers and advertisers with a gateway to access the platform’s features.
Keeps track of public validators that can be nominated during a campaign.
AdEx and Polkadot
Polkadot is a decentralized platform allowing the secure exchange of information between blockchain platforms. To harness its power, AdEx operates a parachain on Polkadot to help power the AdEx registry. Interfacing with Polkadot enables it to interact with other blockchain platforms such as Ethereum.
AdEx Token (ADX), Staking, and DeFi
ADX is the platform’s native currency. The token powers ad campaigns and rewards validators. Another functionality of ADX is staking to enhance the powers of validators.
Staking is done using either DAI or ADX coins. Note that staking gives coin holders a voice on the governance table. With decentralized finance (DeFi) being powered by staking, ADX provides another revenue stream for yield farmers and liquidity miners.
ADX rewards are inspired by popular DeFi platforms such as Compound. DAI rewards, however, are derived from validator fees. Note that staking happens outside the AdEx protocol to allow the platform to continue serving the advertising world.
With the growth of the internet and smartphone adoption, digital advertising is expected to experience sustained growth. However, the growth comes with fraudsters keen on maliciously getting a piece of the pie. Therefore, robust platforms are needed to assure both advertisers and publishers of fair playing ground.
AdEx brings this equality by providing a protocol that key players in the digital advertising space can utilize to realize a transparent ROI. With the inclusion of DeFi, yield mining, and liquidity mining, AdEx attracts more than just publishers and advertisers.