Dragon X
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Whitepaper

Abstract

The DeFi industry lacks an effective, default-choice advertising platform. Existing blockchain advertising platforms require identity verification, banking access and generally do not comply with the principles of DeFi in a meaningful way. There is also a negligible utilization of tokenization or blockchain technology in the advertising industry.
We propose a method to tokenize advertising engagements using the Dragon X Token (DAX), an ERC-20 utility token, redeemable on the Dragon X advertising platform for real-world advertising engagements.
The Dragon X advertising platform is designed to be an ergonomic, simple and effective advertising platform combining the principles of DeFi with digital advertising.
Those principles include accountless authentication via an ethereum wallet, a native stake-able ERC-20 token and no identity verification requirements.
The aim of this project is to provide the DeFi community with an advertising platform that is as effective and ergonomic as the big tech advertising platforms without the associated censorship, limitations and bank & identity requirements. In addition we seek to create a token economy for DAX that enables stakers who put funds at risk to earn advertising engagements for free that can then be used to promote their projects or sold for fair market price.

Maximizing ROI

Ultimately; the value of an advertising platform is determined by it's ability to produce ROI (return of investment) on ad spend for an advertiser.
ROI=((yx)/x)100ROI = ((y - x)/x )* 100
ROI is the end-goal for any advertising campaign and can be calculated in % by the above formula, where x is the total spend and y is the revenue produced. Ideally, ROI is positive.
The goal of this project is to create a platform that makes it as easy as possible to obtain positive ROI from ad spend.
It's an ambitious goal but in the following document, we will explain how we intend to create the best possible ROI driven advertising platform for the decentralized web.

Problems In Advertising We're Trying To Solve

1. High Fees, Low-Value

Advertising platforms are notorious for charging extremely high fees and commissions. These platform fees range from 25 - 60% in most cases.
In addition, these commissions often are compounded and multiplied when the inventory goes through multiple advertising platforms, with each platform taking a cut at each stage of the auction process. Up to 70% of ad dollars end up in the hands of the platforms, ad-exchanges and middle-men in commissions leaving only 30% for content providers. Lots of value ends up lost to intermediates as opposed to being spent on content. Lowering ROI for advertisers.
This results in a lot of problems for the ad business. Because so many ad dollars go towards ad-tech intermediaries, a lot of value is lost for the both the paying advertiser and the supply side publishers, ROI is diluted substantially as a consequence.
What makes this problem particularly challenging is that the value offered by middlemen and intermediaries is often low, this creates an atmosphere of mistrust, fraud and bad-faith in the industry.

2. Censorship And Centralization

The most popular and widely used advertising solutions; Google, Facebook and Twitter have consistently made it incredibly difficult for blockchain companies to raise funds, sell their products and innovate. This is because they've consistently been blocking, banning and confounding advertisers in the blockchain industry for several years. This presents a significant obstacle and limiting factor for the growth of blockchain companies as a whole. The is particularly damaging for small to medium sized blockchain businesses.

3. Banking & Identity Requirements

To advertise your business using one of the big tech platforms, a bank account and some form of identity documents are usually required. This bars many people in the developing world from using these platforms. In addition, the use of fiat currency and banks is required to fund an account. This requires the user have a bank account and use the legacy financial system to participate in online advertising.

4. Poor Traffic Quality

Most advertising platforms get their traffic by offering a revenue share arrangement with content providers and publishers, platforms must focus on serving two customers; advertisers and publishers. This presents advertising networks with a conflict of interest; their profits are contingent upon revenue sharing with their publishers, so there is pressure to sell as much of the publisher's content for the highest price to the advertiser as possible, often compromising on traffic quality.
Not all traffic is of equal value, the vast majority of internet traffic isn't suitable for driving advertising conversions, however, because platforms rely on these content providers sharing their revenue to drive their own profits, traffic is often sold and packaged together from multiple publishers. This dilutes traffic quality and ROI for the advertisers and drives up cost of acquisition.

Our Proposed Solutions

1. An Advertising Platform With No fees Or Commissions.

Dragon X will not operate on a revenue-share basis with publishers, meaning no commissions will be charged on purchased traffic. That means a substantial amount of value that would usually go towards intermediaries and middle-men will instead go directly to supply side publishers and provide a significant boost in ROI potential for advertisers.
Instead, Dragon X will rent traffic on a fixed-price basis from only the top performing traffic sources and publishers. Dragon X will be funded directly by sales of the DAX ERC-20 token, which is required to access and buy advertising engagements on the Dragon X platform. This removes the need for us to charge a commission and gives us the ability to pay top dollar for the best performing traffic assets.
By offering 0% commission and fees, Dragon X will be able to pay publishers significantly more and stands to be an extremely attractive and lucrative alternative to current advertising platforms. In addition, by abolishing the revenue share / commission model, Dragon X will find it much easier to negotiate with extremely high quality traffic sources and create tangible long-term value for both the supply side and demand side of the advertising ecosystem.
More information about the business model mechanics can be in the token economics section of this document.

2. A Platform Based On The Principles of DeFi

We believe decentralized finance is one of the great innovations of our time. The ability for individuals to access a free and open financial ecosystem beyond the control of centralized institutions and governments presents a massive opportunity for people who are either disillusioned by the current financial system or excluded from it entirely.
We believe in applying the principles of DeFi to the advertising economy. Those principles are inherently anti-censorship and community driven. Whilst Dragon X is centralized to an extent in the sense it is operated by Dragon X labs, we intent to stay true to the decentralized principles of DeFi, including a commitment to prevent the censorship of the blockchain industry.
By providing a viable and effective alternative advertising solution to big tech platforms, specifically designed for the DeFi world, Dragon X will play an important part in the process of freeing blockchain enterprises from the restrictions and limitations imposed upon them by censorious big tech platforms.
In addition, we make a commitment to enable open access, without an account, utilizing the ethereum wallet sign-in mechanism to identify and manage user accounts.

3. Bank-less Advertising

Dragon X is an advertising platform that will exist in an economy that is completely separate from the banking system. The DAX token replaces the use of fiat currency and does not require a bank account, therefore, anyone with an ethereum wallet can access the platform, acquire a DAX balance and use the platform regardless of their identity or banking status.

4. Only The Best Performing Traffic

The Dragon X platform will not revenue share with publishers, instead, we will rent ad space on fixed-price terms with only the most quality traffic sources on the market. This gives us unparalleled freedom to choose exactly what kind of traffic we provide and also eliminates the conflict of interest that arises when advertising platforms are responsible for providing monetization for their publishers.
Because Dragon X will be renting traffic only from a select few high-performing sources, it means that we can ensure advertisers only receive the highest possible quality of traffic.

The DAX Token

Introduction

The DAX token is an ERC-20 token designed to be redeemable for real-world user engagements on the Dragon X platform. It is a mintable, fungible utility token produced via proof of stake and features a deflationary supply pressure through a mechanism of token burning whenever DAX is spent for advertising on the Dragon X platform.

Initial Supply

An initial supply of 1,000,000 DAX will be minted upon the launch of the token. This initial supply will be distributed in the following way:
10% - Airdrops (100,000 DAX)
We will airdrop early adopters of Dragon X with up to 100,00 DAX. These DAX tokens will be provided in order to facilitate a "free trial" of the platform for select advertisers. These airdrops are also necessary to get DAX listed on exchanges.
90% - Dragon X Contract (900,000 DAX)
The rest of the remaining supply will be locked in the Dragon X smart-contract. This contract serves as a reserve of DAX, from which advertisers can buy DAX from when advertisers purchase engagements on the platform.

Target Price

As a utility token, DAX is designed to be redeemable for real-world advertising engagements.
Initially, the DAX / Engagement rate will be set at 1:1, meaning each DAX token is redeemable for one engagement. A target price of around $1 per DAX will be the initial target price for the token.
As the token becomes available on open exchanges, the price of DAX may fluctuate, for this reason we have developed a mechanism of ensuring the DAX/Engagement rate remains affordable and appropriate, this is achieved by a variable in the Dragon X contract called the DAX rate.

DAX Rate

The DAX rate controls the ratio between a single DAX token and the number of engagements that can be redeemed for it. Initially as described, this will be a 1:1 ratio.
Assuming the price of DAX dramatically changes, the DAX rate can be used to modify the amount of engagements that can be purchased with the DAX token.
For instance, assuming a DAX rate of 1:1, for one DAX token a user can redeem 1 engagement on the platform. If the price of DAX doubles, the DAX rate could be changed to 2:1, requiring 2 DAX for an engagement. The DAX rate will be set by the team depending on various economic factors related to business operations, for instance, it may be that the price of advertising goes up and therefore the DAX rate must be changed, or the DAX price gets so high it becomes unaffordable to use the platform, the DAX rate is needed to ensure the platform remains economical and affordable for paying advertisers.
The concept of a DAX rate enables us to make sure that price fluctuations in the token to not harm the overall business and makes sure we can ensure advertisers aren't overpaying or underpaying simply because of price fluctuations of the utility token.

DAX Price (Temporary)

Closely related to the DAX rate, a DAX price is to be utilized temporarily while the initial supply of DAX still exists within the Dragon X contract. The DAX price controls how much each unit DAX costs in ETH. The aim is for this to be around $1 to start with. Once the Dragon X contract has sold all of its initial supply of DAX tokens it will be no longer possible to purchase DAX from the platform itself and users will instead have to acquire the DAX token through third-party exchanges or through staking, making the DAX price entirely market-driven in the near future.

DAX Creation

The DAX token is designed to be a PoS (Proof of stake) token. After the initial supply of 900,000 DAX locked in the Dragon X contract is spent, DAX will be exclusively created by the process of staking.
Staking enables a unique economical value in advertising in that those who put DAX at risk in a staking pool stand to earn DAX tokens which can then be used to purchase advertising engagements, essentially producing cost-free advertising for their business. This presents a unique opportunity for savvy businesses to cut their costs of acquisition down to zero and essentially pay nothing out of pocket for advertising engagements.

DAX Deflation

To prevent inflationary pressure building up on this token economy, DAX tokens will burned when spent on advertising on the Dragon X platform, creating a deflationary pressure on the total supply. Over time, this will reduce the total supply of DAX tokens significantly.

Summary

We have proposed in this document our plans to build a DeFi advertising platform. Utilizing a native ERC-20 token and novel token economics to tokenize advertising engagements and provide an alternative advertising ecosystem built on the decentralized web.
For more information please visit our website www.dragonx.app or email our CEO directly at callan[at]dragonx.app
Last modified 5mo ago