Home / Business / Dirt Protocol raises $3M for a decentralized, blockchain-based approach to information vetting

Dirt Protocol raises $3M for a decentralized, blockchain-based approach to information vetting

The team at Dirt Protocol is using blockchain technology to create a new approach to verify information.

The startup doesn’t plan to launch its platform until later this year, but it announced today that it has raised $3 million in seed funding from General Catalyst, Greylock, Lightspeed, Pantera Capital, Digital Currency Group, SV Angel, Avichal Garg, Elad Gil, Fred Ehrsam Linda Xi and others.

Founder Yin Wu previously created lockscreen startup Echo (acquired by Microsoft in 2015) and laundry startup Prim. She told me that after becoming interested in the cryptocurrency industry, she was concerned about the fear, uncertainty and doubt around coin offerings — after all, we’ve covered several ICOs where companies appear to have disappeared with people’s money.

“The market today is still unregulated, with high incentive for people to spread misinformation for personal gain,” Wu said.

Her solution? Build databases where anyone can contribute information, but where they have “skin in the game,” so there’s a financial penalty if they’re not truthful.

Dirt Protocol isn’t trying to create a single, definitive data repository, but rather to provide the tools for developers to build their own databases. Those databases might focus on things like ICOs (providing information like the team, the investors and the number of tokens in circulation), or online publishers (to help advertisers avoid bots), or professional listings and membership lists.

dirt protocol

There will be a single token that works across the Dirt platform. Users will need to stake tokens to add new information to databases, to challenge an entry or to vote in disputes — you’ll be penalized (by losing tokens) for adding misinformation and rewarded for weeding out misinformation.

While that should create an economic incentive for people to not just avoid inaccuracies but also to actively remove them, it doesn’t fully address the question of determining the truth — who, ultimately, gets to decide whether an entry is accurate? Wu said Dirt will support a variety of different “governance structures,” whether that’s centralized moderation, free-for-all voting or a system where votes are weighted by reputation.

Wu also suggested that the system is designed in a way to discourage concerted misinformation campaigns. For one thing, hoaxers will probably want to target the more popular databases, but those are also the ones that should attract more active moderation. Plus, she said, “The more valuable the network, the more people are contributing information, the more expensive [it becomes to contribute].”

A recurring theme in our conversation is the advantage of a “decentralized” approach to data verification. Wu said that isn’t always the right way to go, but she said it makes sense when there’s a big platform with the centralized vetting that works too slowly, or in situations where “you can’t trust the curator” of information, or with data sets that are just proprietary and expensive to access — while you have to buy tokens to contribute information, Wu said that Dirt Protocol datasets should be freely accessible, and “no single party owns that information and can shut off access.”

In a similar vein, she said Dirt Protcool isn’t currently focused on making money. Ultimately, the business model will probably involve some combination of giving the software away for free and charging for additional services.

“We’re focused on creating this open dataset that anyone can use,” Wu said. “If we achieve that goal, I’m confident that some monetization will arise.”

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Expense management software provider Certify is beefing up its artillery against rival Concur with the acquisition of Abacus, which enables companies to deal with expenses in real time. The deal’s financial terms were not disclosed. The addition of Abacus will help Certify, which includes other expense management solutions like Nexonia and ExpenseWatch under one umbrella, become a stronger rival to SAP-owned Concur by reaching new customer segments. Founded by Omar Qari, Josh Halickman and Ted Power, Abacus says it was the first real-time expense reporting solution on the market when it launched in 2013. The Y Combinator alum, whose investors included General Catalyst, Bessemer Venture Partners, Google Ventures and Salesforce Ventures, currently counts 1,000 customers. Its team will join Certify and the Abacus product will continue to be independent. Expenses are a bane for everyone involved: the employees who need to turn in receipts, the managers who have to approve them and everyone in the finance department who needs to reconcile corporate credit cards and make sure company policy is followed. Abacus eases their pain with features like automatic expense suggestions and Slack integration for employees. For companies, it lets them set prompts to enforce spending limits and make sure details, like client names, are filled in correctly. If expenses need to be approved by specific managers or departments, Abacus routes them to the right person. Real-time analytics also help companies make quick budget decisions. Abacus’ clients include Betterment, Dropbox, GLG and North American Substation Services. In an email, Qari, the CEO of Abacus, told TechCrunch that Abacus is a good fit for “companies that need out-of-the-box flexibility in approval flows, spending controls and ERP sync.” For example, he said North American Substation Services, which provides installation, repair and maintenance work for high-voltage stations, uses Abacus to speed up its account receivables by billing back expenses closer to when they actually happened, while Dropbox chose Abacus to reimburse interview candidates more quickly. Certify was acquired by K1 Investment Management last year and combined with expense management software providers Nexonia, ExpenseWatch and Tallie to serve a total of 10,000 businesses. Certify says this makes it the largest competitor to Concur. Each brand operates independently, serving its own niche, like Abacus will. Qari said that “in a prospect overlap analysis, we found hardly any opportunities are common across the portfolio, highlighting how unique each brand’s segment is. The expense management industry’s typical customer profile is fairly fragmented, so it’s going to take multiple solutions approaching the space from multiple angles to fully satisfy market demand.”

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