There is a project in the DeFi space that few are talking about, aiming to unlock data using existing and improved DeFi infrastructure. Ocean Protocolrecently received the Technology Pioneer by the World Economic Forum, has a vision of making data a liquid asset class through blockchain tokens. The founders are pioneers, partnering with the European government and the German Central Bank, who said Ocean’s technology “has no comparable competitors” in the space.
In essence, Ocean Protocol is building a decentralized, multi-chain data marketplace based on advanced DeFi infrastructure and leveraging various token standards including ERC-721 (NFT) and ERC-20. The goal is to make their native OCEAN token the underlying currency of an open data economy, while data is traded on an open data market using the corresponding token.
In general, decentralized finance (DeFi) has proven to be a valuable utility for cryptocurrency. Yield farming, staking, and lending have earned many cryptocurrency investors annual interest rates in the double or even triple digits. Unheard of in traditional finance!
Nevertheless, many DeFi protocols lack utility and are not backed by any “real” assets. Therefore, despite high returns, investors also faced high risks. Numerous smart contract exploits where user funds were drained and malicious activity of DeFi protocols that suddenly withdrew large amounts of cryptocurrency resulted in a fair amount of skepticism towards this segment. Additionally, DeFi has gone behind the scenes since speculation around NFTs became a lucrative investment alternative, allowing investors to gain immense multipliers by flipping JPEGs.
Yet DeFi has evolved into a broader “Web3” movement. Many DeFi projects, including Ocean Protocol, have learned from past mistakes, improved their infrastructure, and implemented advanced features that could lead to exciting opportunities, disrupting multi-trillion dollar industries. Ultimately, the foundations are laid and DeFi may be on the verge of taking center stage again.
An Unexplored DeFi Utility: Data
Data is the world’s most valuable resource. Our future depends on technologies such as artificial intelligence, which can only work well when large amounts of data are available. But currently, less than 0.5% of global data is accessible. Like traditional resources, data is exploited by large corporations creating unfair monopoly market power. Have you ever wondered why Google’s analytics are the best in the world? They have the most data. The data economy is a trillion dollar opportunity that has yet to be explored.
When the Ocean Protocol Data Market V4 launches in the first quarter of 2022, data owners can tokenize their dataset into an NFT, which proves the exclusive right to the data. It’s like owning a Bored Ape, but instead of a JPEG file, owners of Data NFT own the right to a dataset. Data NFT owners can also create an offering of Datatokens, which are based on the ERC20 standard. Data tokens enable all DeFi activity to take place, while assets are backed by real-world data. A breakthrough!
At Ocean Protocol Data Market, data investors can bet on Datatoken liquidity pools or can simply bet on the increase in value of a data set by exchanging OCEAN for Datatokens. If someone wants to access the dataset themselves, data buyers can purchase data tokens to access the data. This proves invaluable as Data NFT owners can actively generate revenue by selling Datatokens to data buyers. All functions are regulated by blockchain technology on Ethereum, Polygon, Binance Smart Chain or Polkadot’s Moonriver
There is a growing community around the Ocean Protocol ecosystem. Ocean Protocol’s DAO funds third-party teams to build valuable infrastructure that accelerates DataFi adoption. DataX for example, is building Datapolis, a data finance protocol offering a “Data DEX” that expands into data-backed lending and more. Another project is that of Data Whale ALGA Mobile Datatoken Wallet for iOS and Android, where users can track their data assets and stake or trade in the ocean data market via their phone.
If you want to know more about DataFi, go to Data Whale website and follow the Ocean Data Market tutorials. Read the definitions and watch our simple explainer videos on our Web3 YouTube Channel on Data Economy.
Disclaimer: This is a paid publication and should not be considered news or advice.