Today, we are announcing a new blockchain-based platform to connect people and brands directly, cutting out marketing middlemen, using an ERC20 token of utility.
The introduction of the Cryptopal token allows to provide highly targeted recommendations to consumers about products, services, and activities, without relying on ads. It reduces price for consumers, improves marketing performance for brands, and protects users’ privacy.
Digital marketing is broken
Digital marketing is a critical industry in modern economies. Brands depend on digital marketing to get new customers and drive growth. People rely on marketing to discover new products, services, and activities that will improve their lives.
But digital marketing today is controlled by a few giant middlemen, whose interests are often misaligned with those of consumers and brands.
The top 2 ad networks alone dominate more than 60% of the industry. Ad networks are the gatekeepers of the new economy. They control how consumers and brands connect. This allows them to capture vast amounts of data from users and extract much value out of brands, injuring user privacy and overall economic efficiency.
Ad networks use cross-device tracking to capture people’s personal data without their explicit consent, monetize that data by showing ads that most people don’t want to see, and keep all of the profits.
Brands, on the other hand, have to engage in bidding wars to connect with users. They typically pay 20% to 35% of their revenue to ad networks, which is more than what most companies allocate to their own employees. This higher cost is ultimately transferred to consumers who end up paying higher prices, in addition to experiencing ever-decreasing privacy.
It doesn’t have to be this way. We are proposing a new, decentralized, ad-free system to connect people and brands directly, in a way that benefits both parties.
Introducing Cryptopal
The fundamentals are simple: people don’t want to see ads and be tracked by third-parties. It’s annoying, it’s invasive, it’s risky. But they do want to discover very relevant products, services, and activities that will improve their lives. And when people consider making a purchase, preferred pricing is a strong incentive to buy.
Brands, on the other hand, need to grow their customer base with users who will love their products, and minimize acquisition costs.
Cryptopal leverages blockchain technologies and advances in decentralized Artificial Intelligence to connect people and brands directly, cutting out ad networks and other marketing middlemen.
In this new blockchain-based ecosystem, people give access to extensive data about their online activity voluntarily, in a way that is trustless and that protects their privacy. In exchange, they get super relevant recommendations and preferred pricing.
User data is processed on-device to match users with highly relevant products, services, and activities. Extensive data means better recommendations. Cryptopal is like a friend who knows you very well, is aware of every single product, service, and activity out there, and gives you the best possible recommendations. No middleman is required.
When users buy a product recommended by Cryptopal they get preferred pricing, in the form of significant discounts, offered by the brand. Discounts are represented by Cryptopal tokens, transferred from the brand to the user when the user makes a purchase.
From the brands’ perspective, Cryptopal allows them to be matched with highly targeted users directly, at no cost, without having to rely on ad networks.
Brands can therefore incentivize users to make a purchase by offering preferred pricing, instead of paying ad networks to be matched with users who may or may not convert.
This leads to more sales for brands (because users are incentivized to make a purchase), higher ROI (brands cut out the marketing middlemen), and more valuable new customers (extensive user data means better matching).
It’s a system that is just more fair to both brands and users.
Benefits for users:
- Discover extremely relevant products, services, and activities
- Get preferred pricing on recommended products and services
- Keep their data private
Benefits for brands:
- Get matched with highly targeted users, at no cost
- Grow revenue by incentivizing users to make a purchase (instead of paying ad networks for making the connection)
- Reduce marketing costs by cutting out middlemen (+87% brand ROI on average, based on our projections)
- Only incur a cost when users make a purchase (instead of paying for ads that don’t convert 91% of the time)
This new decentralized system unlocks the value presently captured by ad networks. It improves economic efficiency. It increases recommendations accuracy. It allows users to benefit from their own data without compromising their privacy. And it allows brands to grow revenue by incentivizing targeted users to make a purchase, instead of having to pay ad networks to connect with them.
Local machine learning and private user data
The Cryptopal browser is a key component of the system. When people opt-in, their online activity is privately monitored in the browser. The corresponding data is stored, anonymized, and encrypted in the browser.
User data is much more granular than third-parties can collect insidiously, because users grant access to their data voluntarily. Data includes the websites they visit, the products they buy, detailed social media profiles, social media content they engage with, demographic information, subscriptions, real-time location, etc.
Local machine learning algorithms then run on-device to match users with the most relevant products, services, and activities. No signal out to protect users’ privacy.
Brands can also use Cryptopal’s zero-knowledge protocol to proactively incentivize users who fit specific criteria. A brand such as Blue Apron can use Cryptopal to incentivize millennial males who often eat at healthy food chains, follow Foodie influencers on Instagram, buy their groceries online, haven’t subscribed to food delivery services yet, but have been searching for healthy recipes in the past 48 hours.
When users buy products or services recommended by Cryptopal, purchases are recorded by the browser, and tokens are transferred from the brand to the user’s wallet. Users’ wallets are integrated with the Cryptopal browser.
The Cryptopal Token
The value of the token is derived from its utility: brands need the token to incentivize users to make a purchase. Demand for the token increases as the system grows: the more users and brands join the system, the more brands need the token to incentivize users to make purchases, the more demand for the token grows, the more its value increases.
In the most basic example:
- Products are recommended to a user
- User purchases products through the system
- User gets discount in the form of tokens, transferred from the brand to her/his wallet
- User exchanges tokens for fiat currencies, ETH, etc.
- Brand buys new tokens on the exchange to give discounts and incentivize users to buy
- Repeat
The token exchange will be rolled out in phases over the year. Additional use cases for the token will be described in upcoming posts, allowing users and brands to increase the use value of their tokens by keeping them within the Cryptopal ecosystem, creating additional network effects.
This is just the beginning. Stay tuned for more information about Cryptopal and how we are reinventing the way people and brands connect. Future posts will describe our detailed roadmap, key aspects of the project, partner brands, and much more. We are always open to conversations and we love it when people say “hi” — don’t hesitate to send us a note!