DIRT, a blockchain startup that plans to develop a trusted platform for structured data, has raised $3 million in a seed funding round. The San Francisco-based company said investment firms that participated in the round include General Catalyst, Greylock Partners, Lightspeed Venture Partners, Pantera Capital and others.
In a Medium post, the company, which describes itself as a “blockchain-based Wikipedia,” wants to make it “economically irrational” for false information to be shared. DIRT is looking to create a protocol for crowdsourcing information using the Ethereum blockchain to organize the world’s data and make it freely accessible to everyone.
Flushed with cash, DIRT plans to release its protocol along with its token in the coming months. The tokens will be based on the Ethereum ERC20 standard, and they are central to the company’s plans to crowdsource trusted data at scale.
Speaking to Bitcoin Magazine, DIRT CEO Yin Wu said, “No single company should have a monopoly on information and truth. We’re building DIRT because we believe structured data about the world needs to be freely available for new applications to emerge.”
“DIRT is doing to data what Wikipedia did to the encyclopedia — create a database of trusted information that is open and free.”
Wu said the protocol would make it possible for third-party DApp developers to create a token curated registry (TCR) similar to how Wikipedia uses its community to verify data.
“Token curated registries use economic incentives to crowdsource information on any topic. Creating lists is at the root of decision making: consider options, rank them, take action. DIRT makes it easy for communities to coordinate and build these lists for an arbitrary number of topics,” she noted.
Crowdsourcing and Competition
DIRT plans to create a new way of crowdsourcing trusted information at scale, which it plans to do by incentivizing honesty. A contributor has to deposit tokens before they can contribute to the platform.
Once this is done, the network calls for a vote to attest the information. For accurate information, the DIRT tokens will remain with the data as a form of “bounty for the information’s accuracy.” Incorrect information, however, will result in a penalty, wherein the user who committed the data will lose their staked tokens.
“Similar to Wikipedia, DIRT allows anyone to contribute information. DIRT maintains accuracy because every contributor needs to deposit tokens to write data. If the data is correct, it is freely shared. If the data is incorrect, anyone can challenge the data and earn tokens for identifying these inaccurate facts. Our protocol and platform make it economically irrational for misinformation to persist in a data set,” a DIRT blog post reads.
DIRT sees centralized data providers and companies exploring verticalized data on the blockchain as its primary competitors but competitors with obvious flaws. The company believes that data marketplaces with existing data curation solutions come with scalability problems, untrusted moderators and more.
The company will focus on cryptocurrency projects once it launches, where it hopes to provide a scalable way to vet information and solve the problems of fraud and plagiarism faced by crypto companies raising funds through ICOs.
Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.