(electronic music) >> Live from Toronto, Canada it's the Cube! Covering Blockchain Futurist Conference 2018. Brought to you by The Cube! >> Hello, welcome back. Cube exclusive coverage here in Toronto for the untraceable Blockchain Futurist Conference. Two days of wall-to-wall with the Cube. I'm John Furrier, my co-host Dave Valante, we're initiating this Blockchain coverage to all 2018 Cube events all around the world. You'll see us more and more talking to the most important people. Excited to have, here at The Cube, San Kim, CEO of Lucidity. on the front page of siliconangle.com, our journalism team, with news. Also doing the really interesting Blockchain advertising, if you can believe what that could be. We know about Brave and the attention token, a lot of activity going around on what is the benefit to the user around advertising. Certainly having having immutability and data might be interesting. Sam, welcome to The Cube >> Thank you. >> So, first of all, big news today on Silicon Angle. We covered you guys, you guys announced a strategic investor. >> Yes. >> What's the hard news? >> Yeah, well, thank you for covering us today. Today we announced our initial funding and our strategic investor is Pythia. Pythia represents the hard chain foundation, and so we're really excited about this opportunity, We believe our chain represents an incredible advancement of base protocol layers and so, we're looking, we'll be supporting them as we go forward, as we work closely with Pythia, our chain, and that community. >> Tell me about what you guys offer taken specific context, folks may or may not be familiar with what you do. What's the basic premise of your opportunity, technology and problems that you solve, and how do you use Blockchain for that? Yeah, so, we started, we were a digital advertising protocol. Effectively, we are a shared ledger for the digital advertising ecosystem, and if you know digital advertising, it operates at a tremendous scale. And so we have to build this Layer 2 technology that sits on top of the traditional, the base layer protocols, like Ethereum and Archain. In order to address the three challenges. The three challenges, one being scalability, the second is difficulty in sharing privacy, and the third is the high overhead cost of decentralizing a network. And so we've built this Layer 2 technology that uses a plasma sidechain, and we use something called a time series database, that solves those three problems. And, we're looking to support additional chains, in addition to Ethereum, and so obviously our chain is a natural extension for us. >> Yeah, and you guys obviously get, we cover you guys from a broad perspective, that's a big problem in advertising. >> But are you guys charting the user value proposition, or the digital marketer or agency proposition, or both? >> Yeah, so we're not trying to tokenize digital advertising. Our token is basically used internally as a proof of stake token. So, the advertiser, we're asking them to pay in fiat, and we convert that into a stable coin. And on our current instincts, it's the Dai token by MakerDAO. And so, what we are trying to solve is the transparency issue, that's rampant in the supply chain. So for example, when you run a digital ad today, you use anywhere from seven to 15 vendors, and those vendors, each of them have their own database, and they never communicate that data across to each other, and so there's discrepancies, and it also opens itself up to a lot of fraud. And so the industry is a 225 billion dollar industry, and the industry itself estimates that there's, like, 30% of that money is wasted. And a lot of that is because there's no reconciliation of that data, there's no transparency, and so we've created this protocol layer, for all 15 vendors to submit their data. And, in real time, we can understand, which impressions were valid, which ones were fraudulent, and, well, not just transparency, but now that we as industry participants don't have to argue with one another, we'll start to trust one another, and then we can move the industry forward. >> In the market it'll adjust the pricing as a result of that as well, right? >> Oh, absolutely, absolutely, and it's just about identifying where is the value created, right? So if you're a value creator in the supply chain, you could probably estimate that, the advertiser's going to eliminate the less valuable ones, and focus on the valuable and the adding ones. So basically, if you're fraudulent, like yeah, you might get hurt, but the real adders will benefit from it. >> Just to clarify a question, you talked about the overheads of decentralizing advertising. I infer from that that an advertising supply chain, by its inherent nature is decentralized? Or are you talking about more of a disruptive model? Can you explain? >> Yeah, so we're not re-creating a whole ecosystem, >> Right >> We're interoperable with the existing architecture. >> Which, is decentralized by its very nature, you're saying, or...? >> No, no, no, it's not decentralized >> Okay >> It's very centralized, like all the metrics are controlled by a few players. >> So it's no seven people in the supply chain, that form that central entity... >> Yes, it's all central entities, and we're asking them to submit their data, into this shared ledger, that works across all of the different industry structures. >> So it is disrupting that... >> Oh, it's highly disruptive in terms of that, but we're not trying to re-create the infrastructure like a lot of other blockchain architect companies. >> Oh, I see, so you're tapping into the existing, and you're providing good auditing, I imagine with this, right, so the benefit might be auditing. So give an example of how that would render itself. >> Yeah, so, one of the areas that we're focused on today, is just looking at the impressions, in a programmatic ad buying. And so, let's say, let's just focus, instead of talking about the 15 vendors, let's just talk about the four. The four is the advertiser, is the DSP, which is basically the buying platform, the SSP, which also represents the exchange, and then the publisher. Now there is, we were asked that all four submit their data into the smart contract, and we verify whether that impression was valid. If you think of a fraudulent example, like a bot, they will not be able to mimic the data across the whole supply chain. And so because we're looking at the data wholistically, rather than just the slices of it, we can identify those fraudulent behaviors. >> This is the benefit of horizontally scalable, integrated systems. Cloud can help you, Blockchain helps you. How's the uptake been? Give us an update on who's involved, what's been the successes, and how's your success going? >> So we've been really excited to work with the IAB, and the IAB stands for the Interactive Advertisement Bureau. They're the bodies that set standards in digital advertising and we're working very closely with them. We launched our pilot, the first official pilot with the IAB, and we have great advertisers that are working with us, we're working with a lot of the agencies, we're actually even working closely with the publishers, and the ad networks, and the exchangers. AppNexus is one of the major partners with us, and the reception's been really positive because I think everybody wants that transparency. >> Well, some of the status quo might not want that transparency, I mean, let's face it, right? >> The fraud is rampant, it really is. >> A 220 billion dollar industry, I betcha there's a lot of people in it that are like, oh boy, here comes lucidity! I mean, come on, what about that? >> I'm sure that exists, but we haven't really come across it because the advertiser, at the end of the day, has become really aware that there is this rampant fraud, there is this waste. And I don't want to attribute everything to fraud, I think some of it is just wasted, because of the quality of the data. And so, the advertiser is demanding and at the end of the day, we're here to serve the advertiser, right? We're here to deliver value to the advertiser, and I think the industry is mature enough now, to where we recognize that. And so we don't think of transparency as a threat to the business anymore. We think of it as a value enhancement to our customer, the advertiser. >> Yeah, and I would personally totally agree with that, because as I said, the market will correct itself. Higher quality advertising is going to deliver more revenue, ultimately, alone, because there's going to be better outcomes. Right, so if you can increase your hit rate, you'd be happy to lower the clicks, you know? >> Is there any benefit for publishers? >> Yeah, I mean, publishers today have to basically trust what their partners are paying them. There's no way for them to verify and validate it. And so, with our system, we enable publishers to look into, it's our sidechain, right? And so, they are able to look at the events, but we obscure the data, we hash the data that's there so that we make it anonymous. But then they're able to see, like, okay, these are the impressions I've manned, here are the ones that were considered valid and verified, and here's what I should get paid. So the publishers now get the transparency, that which they lack today. >> So much of that industry is a black box, you might have a big media buyer, who's got voodoo, you know, that sprinkles magic dust, sends you a big bill, and you're like whoa! Is this really worth it? >> Bots, fake traffic.. >> You can automate a lot of that... >> And you've been doing this for 20 years! This has been the status quo for 20 years! >> We need a change. So, talk about the company, how big, how much funding did you actually owe? Is it privately funded, what's the funding mechanism? How big are you guys, what's the story? >> So today we announced that we raised five million dollars, we did it in traditional means. We did not do an ICO. >> Venture capital? >> It's a mix of venture capital, and obviously Pythia is the fund for our chain, so, but it was an equity deal. And that's the brow we're going to continue with. We do have an internal token, but we are not looking at doing a public sale. >> So not a security token, preferred stock, classic funding. >> So wait, so you did a security token? >> No no, no, preffered stock, classic venture capital. Well, great! Yeah, that's awesome, congratulations. We'll keep in touch, it's great to have you come on. >> Thank you very much >> Thanks very much, appreciate the time. >> And thank you for covering us! >> Of course! We love innovative things, in advertising specifically because it's freaking broken, big time! We have no advertising on our site, because we want to get the best content possible. Of course, the Cube is supported by sponsors, we appreciate that. Thanks for coming on. Cube coverage here in Toronto for watching futurists, we'll be right back, stay with us, as we start to wind down day one. Be right back with more great interviews after this break. (light-hearted techno music)