A third and all-encompassing version of Ocean Protocol has been released, enriching his view of “datatokens” and decentralized data markets.
Announced Tuesday, Ocean v3 brings to life the ocean data market proposition with Ethereum-based datatokens, plus a range of other features such as initial data offerings (IDOs), staking, automatic market creation (AMM) functionality and the potential to share and monetize smart data.
The project’s goal is to democratize the value of data and artificial intelligence (AI), which tends to accumulate in the hands of a few Internet giants. To monetize data created by individuals, businesses, or even cities, efficient methods are required for evaluating individual data sets. To solve this problem, Ocean uses decentralized finance (DeFi) elements, combining AMM price tracking tools with decentralized exchange (DEX) technology.
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To explain how datatokens work, Ocean founder Trent McConaghy uses the analogy of “wrapping,” the way cryptocurrencies are represented on Ethereum so that they can be compounded into yielding DeFi assets.
“I think an interesting way to frame this is for datatokens to be ERC-20 wrappers for access control,” McConaghy said. “So just as you brought BTC into the Ethereum ecosystem by wrapping bitcoin, Ocean is wrapping data to bring data services as resources into the Ethereum ecosystem as well.”
Does data monetization become real?
McConaghy points out several major obstacles that have held back people’s ability to monetize data: lack of control, lack of privacy, difficulty pricing data, false signals of care, and poor interoperability.
By leveraging a combination of blockchain and “compute to data” (the computation arrives at the dataset itself, which means that the data never leaves the premises), Ocean had addressed the first two problems; adding DeFi elements and staking with v3 helps sort out the rest, he said.
A data marketplace can be thought of simply as a DEX front-end, McConaghy said, one that is optimized for data and that makes it really easy to publish data and consume it, as well as trade it, put it into play, and so on.
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Each data service on the market gets its own dated ERC-20 Ocean to provide access. To access the dataset, send a datatoken to the data provider. To give someone else access, send them a datatoken.
Inauthentic signals are a common annoyance on the internet, from fake Amazon reviews to Twitter bots following accounts with little following. Staking in Ocean addresses this problem because, in effect, it is a kind of cure: the more it is aimed at a particular data pool, the more likely it is to be a quality data set (each pool contains OCEAN tokens and the corresponding datatokens to that dataset).
“When people are buying and selling data, there has to be some underlying credibility around that,” McConaghy said, adding:
“What better way than to have skin in the game. The proxy for data quality is simply the amount of participation in that data pool. Sure, people could still fake things by putting a bunch of OCEANs somewhere. But it costs them to do so, when they could just bet on real value datasets that have real volume and get trading commissions from that. “
Another interesting aspect of Ocean’s token model is the way it staking in the context of AMMs. “Staking adds liquidity; adding liquidity is a gamble, “McConaghy said.” Rather than those tokens kind of being stuck and not being able to use them, they add value to that pool. “
Assembling these component parts (DeFi uses the term “composability” for the way Lego bricks can be clicked together on Ethereum) gives people a fighting chance to monetize their data in this new “shadow industry”, currently dominated by companies like Facebook and Google, McConaghy said.
AMMs offer an easy way to launch so-called “initial data offerings” or IDOs, to create a market in a dataset or otherwise. These datatokens can then find their way into order book DEXs like 0x, Binance DEX, and Kyber, McConaghy said, while centralized exchanges like Binance or Coinbase could easily create their own data-driven markets and even think about selling sets. of data they generated internally, he added.
With the launch of v3, Ocean announces partnerships with CivicTechHub, the largest database of projects dedicated to the fight against the COVID-19 pandemic, as well as Swash, Human Protocol, Thalus.ai and Transport Genie.
“To incentivize better data flow in our COVID project database and to facilitate cross collaboration, the ability of ocean protocol market liquidity to double as a management and investment mechanism is a logical step,” Vincent Verheyen, CEO and founder of CivicTechHub, he said in a statement.
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CivicTechHub aims to provide Ocean functionality to each of the projects on its COVID-19 platform individually, Verheyen said, adding:
“The ability to share full access to data or just processing means crisis projects and solution teams will have the ability to provide access to their data based on their preferences.”
Ocean was prepared from the outset to integrate AI platforms or web apps such as Azure ML Studio or Anaconda Cloud, and AI-oriented data marketplaces can be easily deployed within Ocean’s Python library.
“I’m very excited that data scientists are going crazy with this,” said McConaghy, “It allows you to distribute data marketplaces in 10 lines of code.”