Back Camera
We recently connected with Bruce Pon, Founder of Ocean Protocol (OCEAN), which allows software engineers to build marketplaces and other apps to privately and securely publish, exchange, and consume data.
Pon is also the CEO at BigChainDB, which is an organization that allows app developers and enterprises to deploy blockchain-based proof-of-concepts, platforms and software solutions with a scalable DLT-enabled database.
Pon talked about the benefits of monetizing data and how datatokens may be used by individuals and organizations as they interact with web-based platforms. Our discussion is shared below.
Crowdfund Insider: Your team recently launched Ocean Protocol Version 3.0 – which features the Ocean Market, datatokens and Initial Data Offerings (IDO) as key elements.
Please tell us about why these products and services are being offered. What would be their main use cases?
Bruce Pon: First and foremost, Ocean is about data sharing, and bringing buyers and consumers together. Ocean V3 brings all the capabilities of data and AI sharing in a much lighter architecture that makes it easier for people to publish their data and then sell it.
The core part of Ocean V3 are datatokens, ERC20 tokens that are generated for each published dataset. Since ERC20 tokens are highly compatible with (decentralized finance) DeFi, all datatokens can be staked, injected into AMMs like Balancer or Uniswap and then used as collateral for lending.
An Ocean datatoken is an ERC20 token to wrap access control to a given data service. Each data service gets its own datatoken. To access the data service, one sends one datatoken to the data provider. The most interesting thing about datatokens is that they are fully compatible ERC20 tokens – so anyone can generate a datatoken, then input it into Balancer or Uniswap for immediate trading. It solves one of the biggest questions we had when we started this “what is the price of data?”, “what is the value of data?”
With datatokens along with AMMs – the market can figure it out. If people can get a price signal on the value of their data, we think people will be incentivized to share more willingly
We’re bringing the tools of #DeFi to data, along with an interface that is web3 native.
Crowdfund Insider: You’ve explained that Ocean Market serves as a frontend portal to this new data sharing infrastructure, which allows users to become data publishers and sell their data while maintaining privacy and control over the information that they’re sharing.
Please tell us more about this new data economy and what it might means to have “data sovereignty”?
Bruce Pon: Ocean Market is an open-source community marketplace for data. At the core is the principle of putting data owners in control of how they share and monetize their data. There have been historically two challenges in getting people to share data – first, to give them a sense of control, security and comfort, second, to have realistic price signals on the value of the data. Ocean V3 solves these challenges – and with it, gives people a sense of sovereignty over their data.
Crowdfund Insider: The Ocean protocol team has developed a live application for converting data services into data assets — datatokens, which allow for automatic discovery of the dataset’s price and encourage liquid trading of data assets.
Using Ocean Market, the publishing of a dataset as a tokenized data asset is an Initial Data Offering. Please tell us more about the potential benefits of conducting an IDO.
Bruce Pon: An Initial Data Offering (IDO) is just another name for launching a datatoken pool on Balancer. The community seems to have latched on to the idea. It’s relatable and makes sense.
The idea of using an AMM to first price, monetize a data stream, and making it liquid and tradeable was the holy grail only 3 years ago. With Ocean V3 – it is now a reality. Ocean Market makes it easy to do this – it’s the first IDO Launchpad.
This launch opens up enormous opportunities for developers and enterprises to explore the data economy. People will be able to securitize data, earn money on their data, construct pools of datatokens, just like an index fund – where others can invest into. I think this will drive innovation.
Being realistic also – Ocean V3 is a first cut. So there will definitely be toothing pains and it may be rocky. But we are on the side of releasing code early, but audited, to the community, so we can get feedback and adjust – rather than building something in the wrong direction.
We need the community to help us improve.
Crowdfund Insider: Ocean Protocol’s native OCEAN token is now available on Kyber Network, a decentralized digital asset exchange. Please explain why it might be preferable to list tokens on the Kyber Network instead of a centralized exchange.
Bruce Pon: Kyber offers liquidity across DEXs and this is a benefit to help the market function efficiently.
We feel that CEXs and DEXs work in conjunction to give people more options for acquiring $OCEAN, while allowing algorithmic bots to ensure a relatively uniform price across the system by arbitraging away price differences and making a small profit. In this way, people can feel reasonably certain that when they acquire or sell $OCEAN, they are getting a fair market price.
Crowdfund Insider: Ocean Protocol developers have introduced data mining in order to incentivize a supply of “relevant” and “high-quality” data sets. Tell us more about these data mining processes and algorithms and why it might be useful to have access to these types of data sets.
Bruce Pon: To kickstart the publishing of data, we envisioned a program to encourage data owners through the use of incentives, such as airdrops of $OCEAN.
However, with the early success and uptake of Ocean Market, it seems that the AMM integration already gives significant incentives for data publishing because publishers can already earn a lot when the community curators stake on the datasets and drive the price of the dataset up. In less than one week, we’ve seen 25x the transactions above baseline, have over 200 datasets published and there’s about 1.7m $OCEAN staked (worth $800k).
It’s a win-win for everyone because there doesn’t seem to be an immediate need for artificial incentives for data publishers. The market is already extremely active in assessing and curating data sets and setting prices.