Datatokens, DAOs and NFTs
Trent McConaghy, Co-Founder of Ocean Protocol on the structure of Data Marketplaces, the evolution of Data NFTs and DAOs
For this episode of Voices of the Data Economy, we candidly talk with Trent McConaghy, Co-Founder of Ocean Protocol. During this discussion, he explain how Data Marketplaces dey work, the concept of Datatokens, Data NFTs, and the road ahead with OceanDAO and Ocean V4. Here na edited excerpts of the full podcast:
The rabbit hole of Data Economy and Data Marketplaces
At a high level, the aim or ideal situation for people and organizations na to reclaim their data sovereignty where them fit own, control and manage their data while still dey preserve privacy. To facilitate this, you wan get data economy wey facilitates buying and selling of data. If you fit get platforms wey connect possible buyers with sellers, these platforms dey marketplaces- but that, of course, on its own go dey centralized. But different marketplaces go deal with different verticals or shapes or sizes of data. Trent talk sey,
“We see sey instead of one data marketplace, what if 1000 different data marketplaces dey? Wetin e dey take to get to 1000 different data marketplaces to bloom? We already don get the ‘web’ for pure open data sharing where permissions or anything no dey. The World Wide Web na data-sharing protocol itself. But e no get anything about the buying and selling of data.”
What if you fit layer on top of that? This go bring us to the concept of blockchain.
The four benefits of blockchain
It’s decentralized: Instead of to dey controled by a single entity (for example Facebook). Thousands of people fit control am.
It’s immutable: You get provenance trail to buy and sell- and all of that dey on the blockchain. It’s immutable.
You fit own assets: If you own one Bitcoin, you own a private key, just like a password. Ownership na the possession of that private key. Not your keys, not your Bitcoin or data.
It offers incentives: Bitcoins na piece of software wey initially, one team or one person write am. This somehow grow into a global phenomenon with 1000s of people dey run nodes. It dey worth more than a trillion dollars now and spawning a whole new industry. And that na just with one chunk of code wey evolved over time. And the core of this na sey its growth dey based on incentives.
Wetin be Datatokens?
How one fit rewire the world for new rules around data? How we fit let NFTs in the marketplaces bloom? How we fit make the data marketplace even more interoperable with other blockchain tools out there?
“When we begin dey build Ocean V3 (about a year and a half ago) crypto na already a huge industry but neva really hit a trillion yet. All these tools dey such as crypto wallets: Metamask, Trust, etc. Then also a bunch of tools dey around, DAOs, groups of people wey dey manage assets, and exchanges, buying and selling these assets, whether centralized or decentralized. We dey think about how we fit leverage some of these concepts to make Ocean more interoperable? And we realize something very straightforward in the world of data. If I publish data set, then there fit be thousands of people who wan license that data set; them wan use it. So that na fungible concept.”
The vast majority of tokens dey follow the standard. Make we say you publish a dataset for your DNA. What if that DNA get its own datatoken? Its own ERC 20 tokens? So e dey follow the standard. Basically, wey be the idea of a datatoken. An ocean datatoken na fungible token wey dey follow the ERC 20 token standard, and with benefits in terms of interoperability and simplicity. Read Trent’s blog post on datatokens.
Ocean market na data marketplace, where people fit publish their data assets to create these fungible token contracts. Them fit buy and sell data sets and under the hood — e dey use decentralized exchange technology from Balancer.
“We dey able to leverage off-the-shelf technology wey don dey developed for crypto, and we dey leverage am to solve long-standing problems in the world of data.”
Use cases of Ocean Marketplace and Ocean V4: Rug Pulls, Data NFTs, and Monetizing the Community
Ocean V1 solve data sovereignty; Ocean V2 solve data privacy through privacy-preserving AI and Ocean V3 solve a few things at once. It said: How we make things simpler? How we fit really get crazy interoperability for custody and management of data? How we fit automatically price data?
“Wetin we dey do for Ocean V4 na to solve rug pulls and get into data NFTs. Ocean V3 add better data management with sovereign data with wallets, automatic data pricing, and simplicity. Ocean V4 add three specific things: solving rug pulls, Data NFTs, and help the community monetize.”
The target for Ocean V4 is mid-January 2022.
Wetin be Data NFTs
A pragmatic definition of ownership dey get a “bundle of rights”.
Wetin be the motive of ascribe? The idea wey dey behind am na to give everyone more control over their work: for the first time in history, creators go break the lock on content, distribution, and licensing of the entrenched players. When you publish your initial digital art, you dey claim sey you get all the rights around it– either copyright, wey be the main thing you get as a creator, wey mean sey all other rights derived from that baseline copyright, or all the rights to sublicense. na similar thing for data.
Say when you publish a CSV file holding your DNA, you dey claim sey you get copyright on that. For example, you publish the DNA data wey you own– you go get all the rights — e go create a fungible datatoken. This mean sey everyone get license whenever you send them the license.
“Wwtin Ocean V4 dey do na, when you publish just this claim initially, that na single NFT. na non-fungible token because you fit make copyright fungible; only one entity dey wey get control of it. So we go explicitly have am where e dey represented as a token, rather than implicitly with whoever publish the contract, and that na wetin Ocean V4 dey do. But wetin e dey do, you fit still get the sublicenses against that, the fungible tokens.”
Trent add sey
“In 2021, NFTs took off, mostly entities for digital art, wey make me very happy, like artists dey get paid. Hurray. Artists dey get paid and tooling around NFT’s dey explode too. More wallets wey get really good support for these NFTs. More exchanges dey buy and sell NFTs. If we actually explicitly represent ‘copyright’ as an NFT, then now great wallet support dey for this too. So Data NFTs, thanks to the explosion of NFTs, have great support for wallets, exchanges.”
OceanDAO na critical piece and na the foundation of a fully decentralized Ocean ecosystem.
“Over time, we keep iterating, with our users and with their community and learning about wetin makes sense and wetin no make sense. As we dey go on the path of designing V3, we see sey we also get opportunity, not just to simplify how take do data sharing but to improve the macro-level token design of Ocean itself towards long term sustainability”
This na where OceanDAO come into the picture. That na how Ocean itself dey more and more decentralized. Teams fit get grants, but also people wey dey in teams, as well as others in the community fit participate in these working groups to help to grow the Ocean ecosystem in various ways wey suit their skills and passion.
Here na list of the selected time stamps on the different topics wey dey discussed during the podcast:
2.00 to 10.38: Trent’s journey from AI research to Founder of Ocean Protocol
10.38- 27.28: What is a Datatoken? How does a Data Marketplace work?
27.28- 43.47: The journey of Ocean from V1 to V4 and use cases in Ocean Marketplace
43.00- 53.20: OceanDAO
53.20 till the end: The year 2022 for Ocean