Meet the Man Behind Associated Press' Crypto Strategy

Dwayne Desaulniers is running the news agency's increasingly ambitious blockchain experiments – from NFTs to Chainlink nodes.

AccessTimeIconFeb 7, 2022 at 6:14 p.m. UTC
Updated Feb 7, 2022 at 6:24 p.m. UTC
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Daniel Kuhn is a features reporter and assistant opinion editor for CoinDesk's Layer 2. He owns BTC and ETH.

The Associated Press, a collective of more than 1,300 news organizations, might be the original DAO (decentralized autonomous organization). At least, that’s what the white-haired, New Jerseyan behind its blockchain experiments, Dwayne Desaulniers, has said.

Over the past year, the AP has made newsworthy leaps into the world of blockchain. In October, it partnered with Chainlink Labs to launch a node and push news onto Ethereum. For the U.S. elections in the next month, it worked with decentralized encyclopedia Everipedia to publish and preserve its race calls. And, at the beginning of this year, the AP unveiled a Polygon-based NFT marketplace where it will auction some of its Pulitzer Prize-winning photos.

That’s a lot of activity for a 175-year-old organization, widely regarded as one of the most sober and reliable news organizations left standing. But perhaps it’s not so surprising. The not-for-profit has often been quick on the draw when it comes to technological innovation, Desaulniers said. It was early on the telegraph, television and color photographs – always in search of the best way to get more news out there.

Blockchain, the technological innovation that combines immutable record-keeping and decentralized consensus, was a natural fit. But crypto’s comparatively short, 13-year lifespan is littered with failed media projects. It turns out the colloquial “first draft of history” often needs to be rewritten. (In 2019, for instance, the AP Stylebook, the spelling and grammar guide CoinDesk uses, said “crypto” isn’t proper shorthand for cryptocurrency, but cryptography.)

Desaulniers, who started out as a reporter and transitioned into media business development, is not discouraged. And neither is the cooperatively run media behemoth behind him. Tasked with searching for new ways to generate revenue, crypto, once a $3 trillion industry, was a no-brainer. Micropayments, NFTs and social tokens are all prospective ways for media companies to build businesses.

It’s early days yet and still risky, but the AP is taking it slow. Desaulniers spoke with CoinDesk about the AP’s experiments so far. Blockchain has yet to become a moneymaker, but this may be a useful guide for any yeoman journalists looking to leverage crypto to pay the bills so they can write.

Over the past two years, there have been a few organizations that have dipped their toes into crypto. Like more than just NFT branding experiments, but really engaging with the tech: PayPal, Square, the Associated Press. It always seems like these changes typically come from the agitation of one committed crypto person at a firm. Is that you?

I'm a former journalist as well. In the ‘90s I fell in love with technology and the internet, and I was just, like, “what is this gonna do to news? Is it good? Is it bad?” I've just been working in tech and business development ever since. That was my current role at AP, finding new revenue from non-traditional sources to fund the journalism that we do. In the summer of 2020, I got a call from Everipedia asking if we thought about publishing election data on the blockchain. That started a weeks-long education.

We deployed our API and when we made a race call it hit the node and a few smart contracts – that was the very beginning. We were stunned that this whole environment [crypto] has great difficulty porting data over from the internet. It's like this empty vessel. There's this whole economy that needs good information – that's very much aligned with our core business. We're a news wholesaler, we're not-for-profit, B2B. If we get a sense that there's a community that needs good information, and boy, we should get on that.

Do you have a whole team of researchers, coders and business types?

After we did that election experiment, a lot of colleagues – totally organically – who shared an interest in crypto got involved. It’s an ad hoc band of folks that wanted to understand what this was all about. Somehow in this global company, we all found each other. There's still, like, no real official team. My bosses have said, “you're the guy in charge,” but apart from a title, we don't really have anything official. There’s me from the sales side, a couple people from customer service. Obviously, some of our journalists (photographers in particular) are helping.

The more we looked at it, the more testing and little pilots that we did, the more pleased we were with the results and what we were seeing. Everyone loves the chance to figure out what’s the future of news on this platform called “blockchain.” Where do NFTs and even the metaverse – that's something that we're looking at – come in?

That's where we're at today. We did four NFT drops last year on OpenSea, Ethernity and Binance. We're totally playing the field to learn how is Binance different from OpenSea from our perspective.

What did you find there? Are there quantitative or quantitative metrics you’re looking at to see which platform to use long term?

Number one is: how did the sale go if it's an auction or selling at a fixed price? How much does the marketplace help us with marketing? Would they give us a placement on the carousel? Would they help on Twitter? We did a few AMAs [ask me anything] and observed who was attending. This is not scientific, but we certainly had a very, very strong sense that Binance was heavily exposed in Asia. That was one notable difference. We also asked what the fees were like? Fees were a minimal consideration: We're not greedy, we're sharing money with everybody who's helping us.

It's far more important to get the learning and then figure things out as to whether this is going to be a real, official line of business for us. We sold our first NFT for 100 ether back in March, so that got people internally to pay attention.

That's a windfall.

Yeah, it was unbelievable.

There must be concerns too.

No doubt about that. We’re very concerned about the progression of the technology, especially concerning the environment. For the marketplace that we're going to launch, we're going with Polygon because it's a drastically smaller impact.

This might be projection, but there seems to be widespread skepticism about crypto from professionals outside of the industry, especially among journalists. Did you have to do a lot of convincing internally to get AP photojournalists involved?

The thing we had to do more than anything was education. You know: What is the blockchain? What is an NFT? That was job number one. Even today the knowledge is still broadly very, very, very, very, very low. We just wanted to be thoughtful about what we were doing. We didn't want to just raid the archives and see how much money we could make. We thought if the photo community is growing, and if this technology allows them to feel more confident and secure in acquiring an AP photo, then that's possibly a really good thing.

So that's our approach with photographers: We share revenue and teach them how to set up their wallet so they can take advantage of direct payment and secondary sales. We’re trying to be fair with this new potential market

I was trying to find a tough question to ask a former journalist and was going to ask what an NFT marketplace would mean for news, what are there ethical considerations around individuals owning news photographs, which, in a sense, belong to the world. But that’s not exactly fair, because it ignores the reality that just about every digital news image is already gated by Getty.

Or Shutterstock.

Yeah, exactly. Do you think crypto marketplaces like AP’s NFT app could steal market share from these image monopolists?

Well to answer the original question about news ethics: We don't see the blockchain at this point as a way to distribute our daily news report. It just doesn't work. If we ever have to make a correction to a story; it quickly becomes a mess. For certain things like election race calls – where it’s exceedingly rare to reverse those calls because software and humans are working together to all but ensure the runner-up cannot overtake the winning candidate – we feel much more comfortable putting that type of data on the blockchain.

Blockchain permanence is attractive because it can be broadcasted widely to the public, but no one can mess with, or alter or undo something really, really important. We’re trying to figure out what elements of the technology we can extract and use to further our mission. The mission is to get more AP facts out into the world.

And the second question: All the photos that we will be minting on this marketplace, they've already been sent to all of our members and all of our customers. We're not yet filing anything totally new to the blockchain. We are looking at that, but, at this point, the photos that we're planning to mint are just some of the best news, weather photos, aesthetically, we think we've done in the last few years.

Have you heard of Polymarket?

No.

It's an Ethereum-based predictions market that was recently dinged by the CFTC for offering unlicensed binary options. In my heart of hearts I wanted to see something like it develop into a real web primitive, a way to make bets across the internet to help us resolve the truth or combat fake news by putting a price on truth. A big reach that’s even less realistic now. To some extent, Polymarket is the ideal use case for what the AP is doing by pushing information out to blockchain. Does the regulatory environment limit the impact you can have working with smart contracts?

Publishing information on-chain is probably the most traditional of all our blockchain projects – it’s just distributing information. Working with Chainlink, we basically asked what is the information that’s needed? [Feeding] DeFi is obviously way up there at the top of the list. I’m constantly looking over my shoulder at regulation, watching what's happening there and just, like, checking the vibe. We've had ideas that – let’s say, if the government may be turning sour, we’d just stop. We don't want to get involved with that. We’re mindful of who's using the material.

With regards to sports, which is a large market for us, we had a very big ethical dilemma. About four years ago, some states started to legalize gambling and sports betting. We have a ton of accurate, verified sports data, and it's all technically, beautifully structured. We went back and forth on whether it was ethical to put this stuff out there for betting. Initially, the answer was no, but that changed as more and more jurisdictions opened up and it became a legit business.

We're taking the same approach with trying to understand how smart contracts will use our data that we want to put on our node. When we detect a customer that's interested in a particular data set, we'll have the ability with our systems to be super selective about what stories go where. I see it as an entirely new economy that's missing information. And for a news company like AP that's a pretty sizable, if theoretical, opportunity.

Do you have any projections there?

I wouldn't say it's a formal established line of business because it's so early, there's still so much to learn and there's definitely risk. Honestly, we're not budgeting expected revenue from any of these projects. We could just pull the plug on everything tomorrow.

How profitable has the Chainlink node been?

So total transparency – it's early. It's a combination of waiting to find the right customers that want the data that we've got. That's just going to take some time. I don't think I should share the number, but honestly, Dan, it's just not very much at all at this point. Although we did make money off the election data in 2020 – about $50k. But, you know, that was election data, it was a crazy election, it was globally important, there was a huge amount of attention which is why it was that profitable.

How does business development work – are customers reaching out to the AP or Chainlink, typically?

With Chainlink, we're trying to find customers where we've got a really good match, and then work to get the data to those guys. We publish all information about how to access our node online. I think folks with experience, they hear through marketing that the AP has public data and hook up to our node. But Chainlink also does some matchmaking between industries and companies, so that's primarily how things have been working so far.

What do you make of the litany of failed crypto-media experiments?

There was a really interesting pilot done three years ago called Civil where a bunch of journalists issued a coin that allowed those who had stake to react to news. Theoretically, there would be a community that would be incentivized to engage with stories and check things that were suspicious. It was a lot of fun, and we learned a ton – but the thing was just way too early. Man, I found it super complicated just setting up the wallet and whatnot. Setting aside those mechanics and the operations, it was a really good way to figure out how to use this technology to further our mission.

Going back to the election. Having a tamper-proof dataset that’s broadcasted to clients and the world is all well and good. But there's sort of this “last mile” problem of people actually trusting this information. I don’t know if I should get into all the ways the 2020 election unraveled, but can these blockchain experiments ever actually restore trust – is that possible?

Yeah, you're absolutely right to ask how this tech can actually help us. Take news photography, does the technology allow a news consumer to distinguish more easily a real photo or video from a deep fake? That's a really important use case that a lot of organizations – The [New York] Times, The Washington Post – are interested in. From the position of better facts, fighting fake news, it's one of the best tools I've seen.

Then, on the business side, it’s allowing us to do things we never even imagined. When someone buys an AP photojournalism token, and then sells it, the photographer can also get a portion of that secondary sale. We've never, ever been able to do that before. The licenses that we issued to people to use our photos has been a total dead end. We give you a personal license, you can hang the photo on the wall after it’s printed, but that's it. But NFTs could allow us to actually extend that market and allow the license itself to have some value that can be passed along and traded with profits continuing to come back to photographers and the AP.

In a way, this technology also helps us build tools to help individuals make better informed choices about what they're reading or what they're looking at – to determine whether it's real or not or misleading.

There’s a lovely quote from a previous interview where you said, “The AP is the mother of all DAOs.” Any plans to migrate AP governance on chain?

No plans, but the parallels are undeniable. The AP is a co-op, it’s member-driven, there are bylaws, a board that represents the whole and makes decisions – it's in our DNA to operate that way. We’re always asking what the co-op will look like if the media landscape continues to change. DAOs came up in an R&D conversation; we compared our 175-year-old governance model to our understanding of a DAO and didn't see a perfect fit, but, boy, there's enough there that we really want to understand.

I doubt a DAO will ever replace the AP, but what might happen is we pick a subset of news – a niche area like statehouse news reporting – and experiment. The DAO model is great for something like that. Sadly, so many statehouse reporters have lost their jobs over the last few years and left the business. There’s information that needs to be in the public domain but is hard to sustain. A DAO could be an interesting solution.

Josh [Quittner] at Decrypt spun up PubDAO – he told me they’re trying for “AP on the blockchain.” Great for Josh, but a little too far, too fast for us. We’ll learn from them.

Any other words of wisdom for media types looking to experiment with crypto?

You know, we're not going into this as experts. We're learning as fast as we can, and as much as we can. We're trying to be creative and make creative uses of the technology. But none of us want to get fired. So we're very, very careful about the decisions we're making and how far we're going. It's going to be a really interesting chapter in terms of being part of the group that figures this stuff out. Is there a role for news on the blockchain? The fact that I get paid for asking that is kind of a bonus.

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Daniel Kuhn is a features reporter and assistant opinion editor for CoinDesk's Layer 2. He owns BTC and ETH.

CoinDesk - Unknown

Daniel Kuhn is a features reporter and assistant opinion editor for CoinDesk's Layer 2. He owns BTC and ETH.

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