One commonly overlooked area of decentralized finance? Decentralized advertising.
A decentralized advertising network that focuses on ethical and private ads, AdEx has been around for years but has recently doubled down on DeFi and new staking incentives. Let’s dive deeper into AdEx’s staking mechanics to see how this young project has built toward the DeFi market.
The Rise of AdEx Staking
In late 2018, the AdEx team first announced ADX staking. The system entailed validators, i.e. ADX depositors, backing ad campaigns and processing micropayments (now paid out in the Dai stablecoin and/or ADX) on the AdEx network.
Thus when ads on this network generate impressions, they earn fees into a staking pool that pays out on a pro-rata basis to ADX stakers. The validator fee per ad campaign is 7%, and there are ultimately set to be different staking pools with different compositional parameters.
Things picked up steam in December 2019 when AdEx first rolled out the ADX staking app, which offered users their first chance to start providing security for AdEx ad campaigns. The first staking rewards started being distributed in Q1 2020, which were “backdated” to cover stakers who had provided their services since the staking app opened.
The DeFi Revamp
DeFi lending project Compound sent the ecosystem abuzzing this summer when it launched the COMP governance token and started rewarding it to borrowers and lenders of the Compound protocol.
The move sent DeFi’s new “yield farming” phenomenon into high gear and caused more than a few projects in the space to pay close attention. One of those projects was AdEx. Accordingly, in July 2020 the AdEx team revealed an ADX token upgrade that would 1) optimize ADX for DeFi interactions, and 2) introduce a new token rewards system (a.k.a “security mining”) centered around ADX and DAI.
The upgrade took place one month later and, among other things, saw ADX made compatible with flash loans — the first Ethereum token to achieve this feat. As such, the new and improved ADX model and staking system puts AdEx in position to be leveraged in novel ways around DeFi.
Exploring the ADX Staking Portal
What actually goes into ADX staking? The process is actually pretty simple and looks like so:
- Start by getting some ADX to stake + ETH to cover transaction costs
- Navigate to the AdEx Staking portal
- Sign into your wallet (e.g. MetaMask)
- Go to the inaugural “Tom” pool and click “Stake”
- Follow through with the needed transactions, and voila! You’ll be staking AdEx
At this point, you’d be able to monitor your staked positions and unclaimed token rewards from the portal’s UI. The interface also makes it easy to withdraw, claim your rewards, and re-stake your ADX tokens.
For now, the project’s staking arena is relatively small. At the time of this post’s writing, there were 25.7 million ADX (~$3.6 million USD) staked in the Tom pool and the pool was offering a current annual yield (APY) of ~58%.
At the same time, AdEx staking is still very young as is the wider DeFi sector. As the latter seems poised to continue swelling, the former is well positioned to ride this growth toward a more robust ADX staking community.
Of course, only time will tell if AdEx’s novel and out-of-the box approach to online advertising can gain serious traction. But there’s no question that the status quo around online ads is rife with problems, and there’s certainly room for a cryptoeconomy outsider to come in and disrupt this status quo. Incentivizing early users with security mining may be the juice needed for AdEx to do just that.