Ternio — Highly Scalable Programmatic Blockchain
Ternio has built a highly scalable blockchain framework capable of delivering over 1 million transactions per second, fully decentralized and on-chain. It’s not lightning, plasma, sharding or any concepts already being tested.
The company is applying this speed and scale to the $224B programmatic ad industry which is ripe for disruption with blockchain. They have already struck partnerships with the leading companies in the industry. Ternio provides their blockchain framework to existing trustworthy ad companies in the supply chain — enabling those companies to verify users, instantly pay publishers, and protect advertisers from ad fraud.
Scale
Ternio’s blockchain is called Lexicon and uses highly modified versions of IBM’s HyperLedger Fabric and Stellar to achieve such high scale and low cost validation. In a recent testnet, they were able to deliver 1.2 million transactions per second. They are also the only blockchain company that is supporting their claims by currently going through a 3rd party verification process.
This scale is required to support high QPS (queries per second) of programmatic buying and selling which is similar to high frequency trading on the stock market. When someone visits a website (publisher) it generates an impression. If that page has 5 advertisements, then that’s 5 impressions. Aggregate that over tens of millions of users and tens of millions of webpages and the scale is immense.
Co-founder Ian Kane provides an explanation of programmatic advertising — starting at 0:42.
Opportunity
This is not another ad network I.C.O. similar to many that already exist. Ternio does not sell advertisements. This is a B2B enterprise play in an industry that transacted $224B last year and is on track to be over $300B by 2019. In a consumer industry the company needs to convince each unique customer to use their product, but in business you need to convince only a few decision makers to capture millions if not billions of dollars. Ternio has first mover advantage in a highly niche and lucrative market that most do not understand.
Co-founder Daniel Gouldman explains ad supply chain problems at the Dubai Innovation and Investment Summit — starting at 4:15
Ternio solves the following problems:
- Lack of transparency: Approximately $0.50 of every $1.00 currently spent makes it to the publisher. The remaining $0.50 is taken by companies to transact the advertisement. Both the advertiser and publisher do not know how many companies sit in between them. Many low value companies thrive in this obscurity.
- Lengthy payment terms: Since the 2008 financial crisis payment terms have been stretched to a point where they are no longer sustainable. Publishers are paid anywhere from Net30 to Net120. The hurts every company in the supply chain as they have to wait up to 4 months to be paid. In addition, many supply chain companies sustain themselves on payment float (collect Net30 > pay Net60)
- Advertising Fraud: in 2017 $18 billion dollars was spent on advertising fraud. This is a massive problem. Fraud can be anything from domain spoofing (representing a low quality site as a high quality one) or bot traffic (generating ad impressions from data centers to increase ad revenue).
Ternio provides their Lexicon blockchain to companies in digital advertising space so that they can solve the problems mentioned above. This is an important differentiator because they are not competing with established companies, but rather complementing the efforts of companies already controlling billions in ad spend.
Co-founder Ian Kane explains how Ternio differentiates;
Traction
A huge need exists in the advertising industry to solve the problems outlined above. Marc Pritchard of Proctor and Gamble, one of the biggest advertisers in the world, recently called the ad supply chain, “Murky at best, fraudulent at worst.” The status quo is not sustainable so the response to Ternio’s technology has been great. Ternio has already struck numerous partnerships with ad agencies, buying platforms, and exchanges. They have also been approached by other companies who are interested in licensing their Lexicon framework.
The founding team hosted a 90 minute live stream where they answered questions.
