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Web3 Tokens: Ocean Protocol and OCEAN Explained

We are living in a data-driven world.

While the world only produced 2 zettabytes (ZB) of data in 2010, analysts expect that number to grow to 59 ZB by the end of 2020, with a further projected surge to 149 ZB by 2024.

With the proper use of data, organizations can create more value while increasing their growth potential.

From the development of self-driving vehicles and AI algorithms to creating a more efficient healthcare system, data helps businesses advance technology.

However, the centralized networks of tech giants like Google and Facebook prevent businesses from maximizing the potential of data.

Furthermore, since they are not in control of their personal information and have lost their trust in centralized data-sharing platforms, consumers consider data privacy increasingly crucial.

Due to the lack of trust, 1% of the digital data ever created has been analyzed, which significantly slows down the development of technology.

Ocean Protocol aims to provide a solution to the above problems with the use of blockchain technology and the Web3.

Interestingly, the project’s decentralized data platform has been actively explored by prominent organizations, such as the Mercedes-maker Daimler and the car-manufacturer consortium Mobility Open Blockchain Initiative (MOBI).

What Is Ocean Protocol?

Ocean Protocol is a decentralized, blockchain-based data exchange.

As its name suggests, Ocean functions as a protocol that allows anyone to build his own decentralized data marketplace. Such data marketplaces enable individuals and organizations to share, exchange, and use data to create better products, services, and user experience.

Artificial intelligence (AI) and machine learning (ML) algorithms need data to function efficiently and provide precise results.

However, data sharing on centralized platforms come with high risks for organizations, especially as they have to comply with strict laws, such as the EU’s General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA) in the US.

While the above issues prevent organizations from exchanging most of the data generated on the web, Ocean seems to have found the solution to them in blockchain technology.

Via Ocean’s decentralized platform, participants can exchange data in a safe, transparent environment with the ability to control who and how one can use their information while tracking it in real-time on the blockchain.

Ocean’s data-sharing ecosystem includes five different participants:

  • Data providers: Anyone, including organizations, governments, and individuals, seeking to share valuable but under-utilized data.
  • Data consumers: Anyone, including enterprises, non-profit organizations, governments, startups, and universities, needing access to data for analysis and developing AI or ML models.
  • The community: Ocean’s community consists of the general public, legislators, regulators, privacy watchdogs, and internet advocates that monitor and contribute to how data is shared and used on the platform.
  • Data marketplaces: Built on top of Ocean, data marketplaces refer to any portal that connects buyers and sellers while providing storage, data, algorithms, computation, and other relevant services for the network.
  • Developers: Any individual or organization that seeks to build value-added solutions or marketplaces on top of Ocean.

Datatokens, Compute-to-Data, and AMM Functionality

Interestingly, Ocean doesn’t require participants to store data on the blockchain. Instead, they can keep the information on the premises, in the cloud, or on a decentralized platform, such as Storj, Swarm, or IPFS.

With that said, the access control has to be based on the blockchain in the form of a datatoken.

On Ocean, a datatoken is an ERC-20 token that represents each data service on the platform. To use the data of a service provider, one has to hold 1.0 datatoken.

Data providers can customize their tokens to, for example, provide access to their records only for a limited time (e.g., 24 hours).

In addition to datatokens, it’s also crucial to mention Ocean’s compute-to-data solution, which allows the platform’s participants to exchange private records without exposing the privacy of end-users.

With compute-to-date, private information isn’t actually shared (so it doesn’t leave the premises), but rather specific access to the records is granted.

As a result, owners can maintain their control over their records while businesses can stay compliant with data protection regulations. Also, since compute-to-data gives proof that the algorithms were appropriately executed, AI tests based on the solution provide confident results to organizations.

Interestingly, Ocean doesn’t seek to build a whole ecosystem from scratch around datatokens.

Since the assets function as ERC-20 tokens on Ethereum, providers (such as wallets, DAOs, exchanges, and DeFi projects) can integrate datatokens into their existing crypto solutions.

In addition to the ability to launch Initial Data Offerings (IDOs), Ocean has recently added automated market-making (AMM) functionality to its protocol in collaboration with the Balancer DeFi project.

Combining DeFi, decentralized exchange (DEX), and AMM elements allows Ocean users to exchange data on marketplaces without centralized features (e.g., order books) while empowering the platform with additional features, such as data staking and farming.

What Is the OCEAN Token?

The OCEAN token is the Ocean Protocol’s native cryptocurrency.

OCEAN functions as a utility token, which is used for buying, staking, and selling data as well as for the governance of community funding on the platform.

With a maximum supply of 1.41 billion tokens, the project uses a Bitcoin-like deflationary mechanism (meaning that the rate at which coins are minted decreases over time), in which OCEAN is disbursed to fund community projects.

Since the coin’s launch in May 2019, OCEAN has increased its price from the initial $0.033 to $0.43 by November 28, 2020, representing an all-time Return on Investment (ROI) of 1,203%.

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