An Approach to Solve the Data Consume Challenge on the Ocean Protocol Marketplace.
Researchers may yet be the biggest opportunity for the Ocean Market - but only if the data supply and demand is aligned simultaneously.
Ocean Market Web3 Data Economy
Since inception of the Ocean Protocol Marketplace, data publishers and Data Token investors have highlighted the challenge of the lack of buyers that consume datasets via the Marketplace. Data buyers play an integral - if not the most important role - to close the sustainability loop of a flourishing, long-term Web3 data economy. They provide the incentive to publishers to continue tokenizing high quality datasets, generate swap fees for liquidity providers and create a demand for Data Tokens that may have a positive effect on the price of both $OCEAN and the Data Token itself.
The sales of datasets with the help of Ocean Protocol's "Data Tokens" create the main incentive for data owners to distribute their data through the Ocean Market (more data sales = more revenue = more incentive to tokenize more datasets).
Data sales also provide an incentive to the Data Token investors (as demand for the Data Token increases) and Data Token liquidity providers (as the fees generated from each sale are distributed among the liquidity providers that have their $OCEAN locked up in the respective Data Token pool).
In conclusion, without data buyers, the Ocean Market faces considerable challenges.
Ocean Market v4 and "Data Farming"
The Ocean Protocol core team are working on solving these challenges through exploring token rewards via "data farming". This incentive-based rewards system will be launched along with Ocean Market v4, which is released in Q1/2022. Data farming will release weekly airdrops of $OCEAN tokens to every wallet that has published, staked or consumed on the Ocean Marketplace. The more a dataset is sold, the higher are the rewards for the publisher or liquidity providers that have staked on the dataset.
Alice developed a renowned dataset that provides on-chain data insights about OpenSea - a popular NFT Marketplace. She decides to tokenize and sell her data on Ocean Market v4, in order to be eligible for the data farming rewards of that week amounting to 1'000'000 $OCEAN tokens that are split among all Ocean Market publishers, stakers and consumers that have transacted. As NFTs are very popular, her dataset is bought 100 times. No other dataset that was published that week has had any sales, so Alice and everyone that staked on her Data Token liquidity pool will be highly rewarded (it is still unclear how the incentives will work, but they seem to be VERY lucrative :-) ).
How these incentives will align the onboarding of consumers and publishers is yet to be tested. Nevertheless, it is important that data owners ensure that there is a demand for their published dataset, in order to ensure the long-term success of a Web3 data economy and Ocean Protocol.
Attention: Academic Researchers
Data Whale, along with other Ocean Protocol community members, has developed two early-stage Proof-of-Concepts that aim to capture the attention of the data consumer audience of academic researchers. In our opinion, academic researchers and specifically the niche audience of "AI-researchers" could become a key audience that requires attention and engagement.
Currently, academic researchers (e.g. PhD students) face considerable challenges in receiving the data streams that are required to complete their work. Specifically AI-researchers are spending vast amounts of times to find datasets to train their algorithms. Although Kaggle and other third-party sites offer data for free, the time spent on finding quality data is an opportunity cost that can be spent elsewhere. Often, the data found on such sites is not well-maintained to an extent where the download-links have stopped working. Based on a brief qualitative survey with one researcher, the target audience is willing to pay to gain access to quality data streams - an opportunity for Ocean Market!
A Web3 data exchange protocol like Ocean Protocol imply more benefits for researchers. Currently, data procured from centralized services like Kaggle prevent researchers from using the data for something beyond academic research according to the data license. Effectively, this means that their research can't be used commercially, as they are legally prevented from using their algorithms to develop applications or monetizing their models. With this in consideration, neither data publishers nor researchers have a medium of exchange where they can agree on commercial terms - Ocean Market changes this: once the dataset has been sold, the researcher has acquired the right to monetize their model in the future.
Now that we've identified a potential buy-side for the Ocean Market, we need to start promoting the utility of the Marketplace among the audience - after all, it's blockchain and still remains challenging to understand. This can be achieved through launching "data challenges", where data owners (e.g. companies or government entities) can offer their datasets through Ocean Market to solve certain problems. After a data challenge is launched, the same can be promoted among researchers, universities or specific online channels that are popular among this target audience. If the challenge is solved, the winning researchers will be rewarded with $OCEAN tokens, providing an incentive for researchers to onboard to the Ocean Market. Centralized services, like Kaggle, have similar initiatives, although Ocean Protocol's privacy-preserving compute-to-data technology may lead to more confidence among data owners. Compute-to-data solves another big challenge researchers are facing: not receiving access to presumably restricted data. For more confidence and security among data owners, data challenges could also be launched on Ocean Market forks, which only allow whitelisted addresses belonging to the researchers to engage.
Utilizing data challenges effectively solves two challenges: onboarding more data consumers (i.e. researchers) and encouraging data owners to publish and tokenize further datasets. As both data buyers and owners become more comfortable with using Ocean Protocol technology, these processes could also take place on the main Ocean Protocol Marketplace, allowing for public participation. Another proposed outcome would be that researchers highlight the Ocean Protocol technology and Ocean Marketplace in their research thesis. Once published, a PhD thesis for example is referenced and read by companies and individuals all around the world - ultimately exposing Ocean Market to a greater audience.
If you'd like to learn more about the proposed POCs, please feel free to read them below.
All the above is based on our own opinion and may or may not represent or warrant facts. The blogpost was drafted for entertainment purposes and does not imply financial advice.