Ocean Protocol and Balancer Want to Do for Data What Uniswap Did for Coins

Thursday 24 September 2020, 5:03 PM AEST - 3 months ago


Some tricks of the trade employed by todays booming decentralized finance (DeFi) platforms are being used for a completely new paradigm: decentralized data marketplaces.

Announced Thursday, blockchain-based data monetization startup Ocean Protocol is teaming up with Balancer Labs to create the first automated market maker (AMM) for data.

Ocean Protocol is about helping people and businesses unlock data and monetize it, spreading the benefits of data and AI beyond the handful of organizations that hoard, control and get rich from it. Creating efficient data marketplaces is really the lynchpin of this, according to Ocean founder Trent McConaghy. Thus the collaboration with Balancer.

Many people have tried to build data marketplaces in the past, but have been held back by issues of privacy and control. With blockchain and compute-to-data, Ocean is addressing this, McConaghy said in an interview. So our goal is to unlock this data economy with data marketplaces, connecting the buyers and sellers of data. These can be individual humans, families, small companies, large companies, cities, nations, etc.

Ethereum-based Ocean creates data tokens, which can represent a particular dataset – be it an individuals DNA or something much larger and more valuable, like all of Daimlers self-driving car data. The tokens act as an on-ramp to the data, which is stored elsewhere. The second part of the puzzle is establishing a marketplace where this tokenized data and can be discovered, priced and traded using Oceans native token (OCEAN) or other cryptos like ether (ETH) or dai (DAI).

Pricing data is hard. Now, with the third version of Ocean, McConaghy has concluded AMMs like Uniswap do the job best.

Unlike an auction-based approach, AMMs continue to price throughout the assets lifetime. And unlike order books, they dont need a lot of upfront liquidity and a double coincidence of wants. As such, AMMs – which have been instrumental in DeFis ...

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