The Future of Advertising: Paying Communities, Not Platforms

Traditional digital advertising is a leaky bucket. For every dollar spent, only ~40 cents reaches publishers. The rest is siphoned by a complex chain of DSPs, SSPs, and exchanges. This creates misaligned incentives and funds platforms, not people.

• ~60% of ad spend is captured by intermediaries.
• Zero value flows to the community members driving engagement.
• Opaque pricing and fraud plague the ecosystem.

Smart contracts enable verifiable, on-chain attribution. Advertisers can deploy capital into a vault, and community members earn directly for provable actions—clicks, referrals, content creation. Protocols like Rally and Layer3 pioneer this, turning engagement into a direct revenue stream.

• Pay-for-performance with immutable proof-of-engagement.
• Direct-to-community treasury payments, bypassing platforms.
• Composable rewards that integrate with existing DeFi and NFT ecosystems.

To prevent spam and ensure quality, communities use token-curated registries. Members stake tokens to vouch for high-quality contributors or content, creating a self-policing, reputation-based ad marketplace. This aligns economic stake with ecosystem health.

• Stake-weighted curation surfaces genuine value.
• Sybil-resistance via economic bonding.
• Dynamic reward scaling based on community consensus.

Protocols like BanklessDAO and Friends with Benefits are building their own internal ad networks. Revenue from advertisers is distributed to token-holding members via governance, funding further growth. This creates a closed-loop economy where value accrues to the protocol treasury.

• Ad revenue funds community grants and development.
• Token holders govern ad policies and pricing.
• Sustainable growth funded by the community's own attention.

Infrastructure like Ceramic and Tableland enables portable, composable user profiles. Advertisers can run coordinated campaigns across multiple DAOs and communities, rewarding users for cross-protocol engagement without sacrificing user privacy or data sovereignty.

• Portable reputation across Web3 ecosystems.
• Privacy-preserving attestations via zero-knowledge proofs.
• Composable rewards that work across Uniswap, Aave, and NFT platforms.

The final stage is the financialization of attention. Communities can mint yield-bearing tokens backed by future ad revenue streams, or create prediction markets on engagement metrics. This turns community attention into a tradable, capital-efficient asset class.

• Securitized cash flows from community attention.
• Derivatives markets for hedging ad spend.
• Real-time valuation of community influence and reach.

Legacy ad-tech is a ~50% margin business built on opaque data brokers and walled gardens. Brands pay for reach, not results, while communities see no direct value.

• Key Benefit 1: Unbundling the ad stack removes $200B+ in annual intermediary fees.
• Key Benefit 2: Transparent on-chain attribution enables pay-for-performance models, not just pay-for-impression.

Treat ad campaigns as composable smart contracts with on-chain settlement and verification. This enables direct treasury-to-community payments via mechanisms like retroactive public goods funding or real-time micro-transactions.

• Key Benefit 1: Enables trustless affiliate marketing where influencers and communities are paid automatically upon verifiable action.
• Key Benefit 2: Creates a liquid market for attention where ad slots can be permissionlessly traded, bundled, or used as collateral.

Future ad systems will use intent-based architectures (like UniswapX or CowSwap) where users express desired outcomes. Decentralized oracles (e.g., Chainlink, Pyth) will attest to real-world conversion events off-chain.

• Key Benefit 1: Shifts focus from impression fraud to provable conversion, solving a $80B/year ad fraud problem.
• Key Benefit 2: Modular design allows privacy-preserving attestations via ZK-proofs, separating identity from transaction data.

Future ad inventory and user attention flows become tokenized assets. Think ERC-20 ad slots or NFT-based membership passes that grant access to a community's attention.

• Key Benefit 1: Enables programmatic treasury management where DAOs can sell forward ad space to fund operations.
• Key Benefit 2: Creates secondary markets for attention, allowing brands to hedge exposure or speculate on community growth.

Winning protocols will bypass Google/Facebook's front-ends but leverage their distribution. Early adopters are crypto-native communities (DAO treasuries, NFT projects) and performance marketers tired of 30%+ customer acquisition cost inflation.

• Key Benefit 1: Zero sales cycle with crypto-native brands already managing on-chain treasuries.
• Key Benefit 2: Viral integration via SDKs for Discord, Telegram, and Farcaster clients, not traditional websites.

Platforms like Apple and regulators are killing third-party cookies and cross-app tracking. On-chain, user-owned ad preferences create a compliant, privacy-first alternative where users opt-in to monetize their own data.

• Key Benefit 1: Regulatory alignment with GDPR and CCPA by design, turning compliance into a feature.
• Key Benefit 2: User-owned data vaults (e.g., using Lit Protocol) allow granular, revocable permissioning for ad targeting.