LG Electronics develops blockchain platform for digital ads
The South Korean consumer electronics company is working with Arbitrum on a layer-2 network aimed at ad buying and placement.
By Daniel Okafor · Business Editor
3 min read
LG Electronics is developing a blockchain-based advertising system, Fortune reported, putting a major consumer device maker behind a corporate use case for crypto infrastructure. The project matters because it extends blockchain experimentation beyond finance and into the mechanics of digital ad sales.
The South Korean company, known for televisions, laptops and other consumer products, has a dedicated blockchain research lab and has tested the advertising project with an unnamed Japanese ad agency, according to Fortune.
The planned platform is designed to give advertisers and publishers a common database for ad inventory, Fortune reported. It also records how customers interact with advertisements, according to the report.
LG Electronics worked with Arbitrum, a layer-2 protocol built on Ethereum, to create its own blockchain network, Fortune reported. Layer-2 networks are used to process and bundle transactions at lower cost than the main Ethereum blockchain.
The collaboration led LG to build its own layer-2 network, according to Fortune. The company plans to examine later this year how it could bring the ad platform to market.
Samuel Byungsun Park, who leads LG Electronics’ blockchain research department, said in a statement to Fortune that the company is assessing whether the model can provide value for advertisers, publishers and audiences.
Arbitrum sees automation potential
Steven Goldfeder, cofounder of Arbitrum, told Fortune the system could make ad sales more efficient by allowing parts of the market to run through software rather than manual processes.
The project places LG among a group of large companies building blockchain systems tailored to their own business needs. Fortune reported that corporations have generally been cautious about launching their own blockchains over the past decade, but that some large firms have become more open to the idea as the U.S. regulatory environment for crypto has become friendlier.
Fortune cited several examples of that shift. Stripe has worked with venture firm Paradigm on Tempo, a high-speed blockchain. Circle, the stablecoin issuer, is working on Arc, its own decentralized ledger. Robinhood is working with Arbitrum on a chain for tokenized equities, according to Fortune.
Fortune also reported that JPMorgan Chase has a blockchain unit using a private version of a decentralized database. The broader corporate strategy, according to Fortune, reflects efforts by some companies to control more of the technology stack that supports crypto applications.
Goldfeder cautioned that launching a blockchain is not the right move for every company. He told Fortune that while some organizations may have a good reason to create their own ledger, most likely do not.
LG Electronics has not disclosed the name of the Japanese ad agency involved in the pilot, according to Fortune. The company also has not announced a commercial launch date for the advertising platform beyond saying it will explore market options later this year.
This story draws on original reporting from Fortune.