Today digital advertising blockchain startup Lucidity announced a funding round of more than $5 million. The investors include 3Rodeo, CoinUs, Cypher Group, YouBi Capital, and Pithia, a venture capital firm part of the RChain ecosystem. RChain is one of those yet-to-launch Ethereum competitors but has more credibility than many others.
Digital advertising’s challenges
Online advertising has three big problems. Firstly intermediaries take up to 60% of the ad spend, often referred to as the ad tech tax. Secondly, there’s a significant amount of bot activity and fraud. And finally, given the large volumes and separate logs, reconciliations between publisher and advertiser figures are painful.
Lucidity addresses the second and third pain points. It provides advertising supply chain transparency which should reduce fraud and minimize reconciliation discrepancies. Essentially it’s a logging mechanism for digital advertising on a shared ledger.
But AdAge asked the natural question: will Lucidity become another ad tech tax?
Lucidity CEO Sam Kim responded: “It will add small fees. But that will pale in comparison to the money saved, recapturing wasted spending from fraudulent impressions and wasted hours fighting discrepancies.”
IBM announced a project called MediaOcean to address the ad tech tax issue. MediaOcian has partnered with major advertisers like Kellogg, Kimberly-Clark, Pfizer, and Unilever.
It’s widely known that public blockchains like Ethereum currently have serious scaling issues. To address this, Ethereum is planning to launch Casper which is equivalent to Bitcoin’s Lightning Network. Both of these ‘layer 2’ protocols involve executing transactions outside of the main blockchain and then grouping them in one or more blocks to submit to the main network.
Lucidity deals with digital ads which are a high volume space, so the company designed its solution around Casper.
The solution is currently being tested in pilots run by the Internet Advertising Bureau’s Tech Lab.
With today’s announcement, Lucidity also plans to support RChain. With all the hype surrounding blockchain, it would be easy to lump RChain with all the Ethereum contenders. Its website states: “To become a blockchain solution with industrial-scale utility, RChain must provide content delivery at the scale of Facebook and support transactions at the speed of Visa.”
Two of the reasons to keep an eye on RChain are its people and technology. George Meredith is the President and has strong credentials as a technologist. He has a history with Microsoft and MCC, particularly working on concurrent computing.
For Ethereum fans the familiar face is Vlad Zamfir who is the lead developer of Ethereum’s Casper protocol work. He’s also a director of RChain.
The technology has several novel features. Of note is the smart contracting language which allows concurrency and formal proofs. The latter should reduce, if not eliminate bugs.
Disclosure: The author does not hold Rchain tokens