Basic Attention Token (BAT) is a critical component of the Brave browser ecosystem. The main motive behind this project is to create an equitable and rewarding system for stakeholders — including advertisers, publishers and internet users — in the digital advertising industry. The creators of this project believe that this approach will eliminate issues relating to privacy, monopoly, security and online experience. In this guide, we will explore the workings of Basic Attention Token and highlight other crypto projects looking to optimize the digital advertising industry.
Overview and History of Basic Attention Token
Internet users are increasingly aware of the privacy and security risks associated with online advertisements. More often than not, they tend to ignore unsolicited advertisements, albeit to the detriment of advertisers and publishers. On the one hand, it has become a tad difficult for publishers to monetize their content. And even when they do, a large chunk of the ad revenue goes to Google. On the other, advertisers and brands are investing billions, and yet, they are not entirely sure that they are achieving their goals.
Thanks to its privacy-focused functionality, Brave quickly became a popular browser for crypto users. It has consistently leveraged this status by partnering with reputable blockchain companies to provide specialized crypto tools.
It was not a surprise when the team introduced the platform's blockchain-based monetary incentive initiative, Basic Attention Token (BAT), in 2018. Simply put, BAT is an Ethereum-based utility token that anchors the digital advertising economy of the Brave browser. The digital asset incentivizes Brave users to view ads and also serves as the settlement currency for publishers.
How Does Basic Attention Token Work?
As mentioned earlier, Brave is trying to enable an equitable distribution of value in the digital advertising industry. To achieve this, it has tried to create a privacy-focused platform such that advertisers or publishers cannot log users’ private data like IP addresses, even when the ad-block feature is not activated. In essence, users are promised privacy protection at all times.
Part of the added security measures that Brave offers users is that it only features ads from its pool of verified advertisers. These advertisers pay a certain amount denominated in BAT to finance their ad campaigns on Brave. Subsequently, these funds are distributed among content creators and Brave users.
With this system, Brave believes that users can shield themselves from fraudulent advertisements. In addition to this optimized privacy feature, you get to receive rewards denominated in BAT when you view ads.
Likewise, whenever you visit a website and view the featured ads, the publisher gets paid in BAT. These content creators are also allowed to receive BAT as tips or donations from internet users. You can also access premium content from such websites by paying the subscription fees with BAT. As such, BAT functions as a reward and settlement mechanism on the Brave browser.
The digital asset has been implemented to incentivize the attention value of users, which is calculated based on the incremental duration of ads on active browser tabs and the proportion of their visible pixels to the rest of the website. As for advertisers, this solution affords them clearer insights into the effectiveness of their advertisements.
There is over 1.49 billion BAT currently circulating in the market. Considering that the maximum supply is capped at 1.5 billion BAT, the digital asset is almost fully diluted.
Other Crypto Solutions for Online Advertising
Besides Brave's unique approach to digital advertisements, platforms like 2Key Network and AdEx Network are also utilizing crypto to improve online advertising in one capacity or the other. 2Key Network, in particular, focuses on optimizing referral marketing with a blockchain-based settlement solution. The platform capitalizes on blockchain’s immutability to help advertisers or brands track and reward referrers.
The platform introduces smartlinks for automated and immutable referral maps for link distribution. In other words, it helps advertisers convert their links to smartlinks that can autonomously log clicks and conversion rates. The protocol tracks the efficient distribution of such links and distributes 2key tokens among referrers.
AdEx, on the other hand, provides a verification system for ad delivery and a trading protocol for ad space and time. The main objective of this project is to eliminate ad fraud so that advertisers get value for their money. While noting that the volatility of crypto limits its use as a standard business payment, AdEx has opted to use DAI, a crypto asset pegged to the US dollar, as its settlement currency.