BAT lost 50% in value within the last 3 months. Nothing special when it comes to cryptocurrencies. But you still receive 0.05 or 0.1 BAT per ad. Does that mean Brave is also paid autonomically from the exchange rate by advertisers?
Hello, I am leading the business effort to bring Brave Ads to market, and am happy to help break down the process.
Advertisers onboard to our ad platform through our Managed Services and Ad Operations team.
There’s a process that advertisers are required to follow, similar to how we require publishers to verify with the platform. This involves checking to verify the advertisers are who they claim to be, and have a registered business address associated with the domain, etc.
Advertisers set a total budget for the campaign, and set a date range.
Their campaigns go through preflight checks, and are deployed from the ad server.
We invoice the advertisers every month, for the total ads viewed for the month.
Advertisers can choose to pay in USD or BAT. We have a 3 tier CPM based rate card that advertisers buy against when they send in their order for our team to traffic in the ad server.
Note that prior to invoicing, any delivery that has failed to pass anti-fraud checks is filtered out of the total.
To determine the BAT price, we run a 30 day blended average of the daily close price of the BAT, to provide a fair rate.
70% of the revenue from USD and BAT campaigns is distributed in BAT through ad grants that people are prompted to claim around the 5th of every month.
Advertising campaigns are typically purchased for weekly or monthly durations outside of Brave, so we wanted to begin with a setup that advertisers are familiar with. This is also why we provide options for advertisers to pay in USD or BAT. If we required advertisers to learn how to handle and transact with crypto in order to participate, we would have a difficult time landing advertisers.
As a general rule, whenever there is a delta from volatility, or an issue with delivery, etc., Brave makes good on the difference.
This all becomes less of an issue as we scale and have more utility over time. If you’d like a deeper dive into the token economics, I’d suggest taking a look at our BAT whitepaper at https://basicattentiontoken.org - I was one of the members of the team that wrote the white paper, and it covers the token economics in detail.
We have taken a pragmatic approach, initially focusing on creating an alternative ad serving model (ad catalog and local ML matching on-device), ad event confirmation reporting protocol (blind token confirmations w/ZKPs), and stand up the ad server and campaign management and flows.
This has proven to work out well initially, as the blockchain space is still maturing, and more solutions are becoming available to test that are capable of handling the throughput and scale of transactions required to have more and more on-chain activity. We have an entire team of engineers focused on this work, and they are making progress.
I hope that this helps clear things up. As we continue to iterate through our roadmap, the platform and transaction flow will become more decentralized and on-chain