 Live from Toronto, Canada, it's theCUBE. Covering Blockchain Futurist Conference 2018. Brought to you by theCUBE. Hello everyone, welcome back. CUBE exclusive coverage here in Toronto for the Untraceable Blockchain Futurist Conference. Two days, two days of wall-to-wall coverage with theCUBE, I'm John Furrier. My name is Dave Vellante. We're initiating this Blockchain, covers all 2018 CUBE events all around the world. You'll see us more and more, talk to the most important people. I'm excited to have here in theCUBE, Sam Kim, CEO of Lucidity on the front page of SiliconANGLE.com, our journalism team with news, also doing a really interesting Blockchain advertising. If you can believe what that could be, we know about Brave and the attention tokens, a lot of activity going around on what is the benefit to the user around advertising, certainly having immutability, and data might be interesting. Sam, welcome to theCUBE. Thank you. So first of all, big news today on SiliconANGLE. You guys, we covered you guys. You got us announced, 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 Pithya. Pithya represents the R Chain Foundation. And so we're really excited by this opportunity because we believe R 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 Pithya, R Chain, and that community. Talk about what you guys offer. Take a sit context. Folks may or may not be familiar with what you do. What's your basic premise of your opportunity, technology and problem that you solve, and how do you use Blockchain for that? Yeah, so we started, we're a digital advertising protocol. Effectively we are a shared ledger for the digital advertising ecosystem. And if you know digital advertising, it operates at tremendous scale. And so we have to build this layer two technology that sits on top of the base layer protocols like Ethereum and R Chain, in order to address the three challenges. The three challenges, one being scalability. The second is difficulty ensuring privacy. And the third is the high overhead cost of decentralizing a network. And so we built this layer two technology that uses a plasma side chain, 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 R Chain is a natural extension for us. Yeah, and you guys also get, we cover you guys from a fraud perspective. That's a big problem in advertising. Absolutely. Are you guys targeting the user value proposition or the marketer, digital marketer, or agency proposition, or both? Yeah, so we're not trying to tokenize digital advertising. Our token is basically used internally for 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 in our current instance, it's the die token by maker down. 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 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 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 or that data is no transparency. And so we created this protocol layer for our advert for all of the part, all 15 vendors to submit their data. And in real time, we can understand which impressions were valid, which ones were fraudulent. And that will allow, well, not just transparency, but now that we as industry participants no longer have to argue with one another, we'll start to trust one another and now we can move the industry forward. And the market will adjust the pricing as a result of that as well, right? Oh, absolutely, absolutely. And it's just like about identifying where's the value created, right? So if you're a value creator in the supply chain, you could probably estimate that the advertiser is going to limit at least the less valuable one and focus on the value and adding one. So basically if you're fraudulent, like yeah, you might get hurt, but the real value adders will benefit from it. Just to clarify a question, you talked about the overheads of decentralizing advertising. I infer from that that advertising supply chain by its inherent nature is decentralized or are you talking about more of a disruptive model? Can you explain? No, so it's not, we're not recreating a whole ecosystem. We're interoperable with the existing architect. Which is decentralized by its very nature, you're saying? No, no, no, it's not decentralized, very centralized. All the metrics are controlled by a few players. So it's those seven people in the supply chain that form that central entity. And we're asking them to submit their data into the shared ledger that works across all of the different industries. So it is disrupting that. Oh, it's highly disruptive in terms of, we're not trying to recreate the infrastructure, like a lot of other blockchain ad tech companies. I see, okay. You're tapping into existing. Yeah. 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 buy. And so let's say, let's focus on just the, instead of talking about the 15 vendors, let's just talk about the four. The four are the advertiser. It's 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. And if you take 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 holistically, rather than just 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? Here's an update on who's involved, what's been the successes, how's the success going? So we've been really excited to work with the IAB. And the IAB stands for the Interactive Advertising 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 we're working with us. We're working with a lot of the agencies. And we're actually even working closely with the publishers and the ad networks and the exchanges. 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? Fraud is rampant, really. 220 billion dollar industry. I bet you there's a lot of people in it who are like, oh boy, there comes Lucidity. I mean, come on, what about that? I'm sure that exists, but we haven't really come across that 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 the quality of the data. And so the advertiser demanding 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 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. The advertiser. And I would, personally, I would totally agree with that because as I said, the market will correct itself. Yeah, higher quality advertising is going to deliver more revenue ultimately in the long 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, you know, with our system, we enable publishers to look into what we call, it's our side chain, right? And so they're able to look at the events, but we have scared the data, we hashed the data so that we make it anonymous. But they're able to see like, okay, these are the impressions that ran. 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 which that 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? Box, big traffic. You can automate a lot of that. And you've been doing this for 20 years. Yeah, at least. It's been the status quo for 20 years. We need to change it. So talk about the company, how big, how much funding? Did you do an ICO? 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 $5 million. We did it in traditional means. We did not do an ICO. Venture capital? It makes the venture capital and obviously, Pithya is the fund for our chain. So, but it was on, it was an equity deal. And that's the brand we're going to continue with. You know, we believe we do have an internal token, but we are not looking at doing a public sale. It's not a security token, preferred stock, classic funding. So wait, so you did a security token? No, no, no. No security token. Preferred stock, classic venture capital. Great, yeah, that's awesome. Congratulations. Well, keep in touch. 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. We're on 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 theCUBE is supported by sponsors. We appreciate that. Thanks for coming on. CUBE coverage here in Toronto for Blockchain Futurist, be right back. Stay with us as we start to wind down day one. Be right back with more great interviews after this break.