What is Ocean Protocol and the OCEAN Token?

Ivan On Tech

Written by Ivan on Tech

June 30, 2021

Powered by the native OCEAN token, Ocean Protocol is one of the leading blockchain-based data marketplaces. The platform provides a wealth of accessible private data that can be used for a variety of applications. Also, the Ocean Protocol staking feature allows participants to earn a passive income by providing liquidity to the Balancer automated market maker (AMM) and curating datasets. This data can range from market data to consumer data, and even decentralized AI (artificial intelligence) data. If you’ve been asking yourself – “what is Ocean Protocol and the OCEAN token?” – then you’re about to find out!

In this article, we’re going to explore Ocean Protocol and the native OCEAN token. Also, we’ll discuss the Ocean Protocol staking facilities, along with Ocean Market, and OceanDAO. Plus, we’ll look at datatokens, data marketplaces, and the Compute-to-Data feature!  

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What is Ocean Protocol?

Data is quickly becoming a highly desirable asset class. For businesses large and small, data is the oil that keeps the digital world moving. Ocean Protocol was created to unlock the value of data using secure, privacy-preserving technologies. 

Blog Ocean Protocol Logo

Using the Ocean Market app, data owners and consumers can publish, buy and sell data on the blockchain in a decentralized manner. Using the native OCEAN token, Ocean Protocol provides developers with an extensive data library that can be used to create bespoke data exchanges and wallets. Plus, the platform provides a host of decentralized finance (DeFi) and artificial intelligence (AI) tools. Furthermore, the Ocean ecosystem is secured by Ocean Protocol staking. 

Ocean Protocol is deployed on Ethereum, the largest smart contract-enabled blockchain in existence. Plus, as one of the leading data marketplaces and decentralized AI data providers on the blockchain, Ocean Protocol is well placed to spearhead the new data economy.

OCEAN Token

The OCEAN token is an ERC-20 utility token with three main use cases. Firstly, the OCEAN token is a unit of exchange. It can be used to buy, sell, and publish data on Ocean Market, or on a customized Ocean-powered market. 

Blog Ocean Jellyfish Image

Secondly, the OCEAN token is used for Ocean Protocol governance and project funding via OceanDAO. Thirdly, the OCEAN token can be staked on data to add liquidity. Stakers receive staking rewards and transaction fees, which makes it easy to earn a passive income with crypto.

Furthermore, the OCEAN token is branded as “the token for the Web3 data economy”. The OCEAN token has a similar distribution model to Bitcoin. The growth and continued adoption of the Ocean Protocol ecosystem are expected to add value to the token over time. 

Ocean Token Model

The OCEAN token model is heavily focused on long-term sustainability and growth. The dynamics of the OCEAN token follow those of a work token. Work tokens are a type of utility token whereby a service provider earns the right to carry out work on a network by staking the native token of the network.

Blog Ocean Protocol Jellyfish Image 2

Furthermore, the OCEAN token model includes the “Web3 Sustainability Loop”. This is a system created to sustain a healthy ecosystem based on sound tokenomics and sustainable ecosystem development. The Web3 Sustainability Loop ensures that Web3 projects created using Ocean Protocol technology receive adequate funding and grants. Rather than relying on a flash-in-the-pan strategy that hinges on an injection of initial funding, Ocean Protocol takes a small fee from transactions throughout the ecosystem. This is then allocated to the development of new projects and long-term community growth.

Ocean Protocol Staking

The OCEAN token can be staked on data assets via Ocean Market. This means adding liquidity to a datatoken-OCEAN pool. Ocean Protocol staking rewards entitle stakers to a portion of all transaction fees from data buyers. These rewards are distributed proportionally to a user’s stake. In the future, we can also expect an increase in Ocean Protocol staking with the introduction of the Ocean Data Farming program.

OceanDAO

The OCEAN token can be staked via OceanDAO. This enables participants to vote on which new Ocean community projects should be funded. OceanDAO directs resources to teams that have been earmarked by the community as having a high probability of sustainable success and growth. 

Also, 51% of the OCEAN token supply will be distributed to the OceanDAO decentralized autonomous organization (DAO) over the coming decades to bring long-term sustainability and growth to the platform.

Ocean Protocol Data Marketplaces

The Ocean Protocol data marketplace, known as Ocean Market is a one-stop shop for Web3 data provision. Ocean Market allows users to publish data, which can then be bought and sold. Also, Ocean Market users can stake OCEAN tokens on other people’s data so that it can be curated and exchanged. Furthermore, Ocean Market allows publishers to monetize their data while retaining full control and privacy.

Blog Ocean Data Market

Ocean Market provides access to private data which would otherwise be unobtainable. Plus, publishers can participate in an Initial Data Offering (IDO) on Ocean Market by providing datasets. These datasets can be published at a fixed price or automatically achieve price discovery using the Balancer automated market maker (AMM). Also, users can create and launch their own data marketplaces. Doing so allows users to earn a percentage of each dataset they sell on Ocean Market. 

Moreover, when datasets are published, they are tokenized as datatokens. Automatic price discovery is based on the ratio of datatokens to OCEAN tokens in the Balancer pool. As datatokens are sold, OCEAN tokens enter the pool in their place, causing the price of the datatokens to go up. The same works in reverse, meaning that when more datatokens enter a pool and more OCEAN tokens enter, the price of the datatokens is reduced.

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Datatokens

Datatokens are ERC-20 tokens used to bridge data assets with crypto wallets and decentralized finance (DeFi) tools. These tokens make publishing data simple, by allowing publishers to deploy and mint datatokens that can be spent by data consumers. Also, datatokens allow for data cooperatives and decentralized autonomous organizations (DAOs) thanks to the composability of Ocean Protocol’s smart contracts and libraries. This enables developers to access valuable data without friction.

Also, this allows crypto wallets and exchanges to become data wallets and data exchanges while providing on/off-ramps for data assets to be integrated with decentralized applications (dApps). Moreover, datatokens allow data to be exchanged on the blockchain in a decentralized, trustless way, without the data itself being made public on-chain. 

All that remains on-chain is the access control of the data. Also, by turning ERC-20 compatible wallets into data wallets, and crypto exchanges into data marketplaces, Ocean Protocol’s datatokens could funnel tremendous value into decentralized finance (DeFi) from the ever-expanding data industry.

This works by using datatokens to access data services. Each data service provided by the Ocean Protocol ecosystem has its own datatoken. Holding a specific data token gives users to that particular data service. Furthermore, datatokens provide all of the benefits of decentralized access control, with the added bonus of a simple development environment and user experience. Moreover, data is published as ERC-20 datatokens which have automatic price discovery and are highly interoperable.

Compute-to-Data

Ocean Protocol’s Compute-to-Data feature is a decentralized exchange (DEX) for data that has been integrated into Ocean Market. The Ocean Compute-to-Data function facilitates the buying and selling of private data in a way that preserves privacy. It resolves many of the issues associated with using private data, and the risks involved if that data becomes compromised. 

Blog Ocean Protocol Compute-to-Data

This is achieved by providing a platform for the exchange of data that allows consumers to run compute jobs on data while publishers retain control of their data. In turn, this allows data owners to monetize data on Ocean Market without giving up privacy or control of their data.

Furthermore, data buyers can use this data for analytics, market insights, artificial intelligence (AI) modeling, and much more. The Ocean Protocol Compute-to-Data environment assembles remote computation and data execution without jeopardizing the privacy of data. Also, with the help of smart contracts, any data publisher or AI practitioner can use Ocean’s Compute-to-Data feature to verify that algorithms have been executed as intended.

Moreover, this technology benefits users in various ways. For example, data owners can make a passive income with crypto by monetizing data in a privacy-preserving way. Consumers of this data gain access to private data without the liability that comes with directly seeing it. 

This opens up a wide array of new opportunities for data scientists and AI practitioners by giving them access to high-value, private data that was previously inaccessible. Indeed, Compute-to-Data could improve research outcomes, facilitate higher levels of accuracy with decentralized AI modeling, and enable decentralized AI practitioners to publish algorithms for others to use, all while retaining the privacy of their data.

Data Science – Decentralized AI

Data scientists and artificial intelligence (AI) practitioners stand to benefit from the data provided by Ocean Protocol. Cryptographically, verifiably secured data provenance has the potential to improve decentralized AI models by providing tamper-proof data secured by the blockchain. Not only does this create more opportunities for data providers and curators, but it also opens up many new avenues for decentralized AI by providing access to data that was previously inaccessible.

Ocean Protocol Summary

Ocean Protocol is striving to build a sustainable community of developers, engineers, data scientists, and decentralized AI practitioners. By providing high-quality, tamper-proof data, and encouraging community growth and development, Ocean Market is among the most popular data marketplaces on the blockchain. Moreover, Ocean Protocol is positioned to be a key player in the data economy thanks to the extensive development taking place throughout the Ocean Protocol community.

Blog Ocean Protocol and Ethereum Logo

As data is becoming increasingly commodified, the tokenization of data on the blockchain could become an important part of everyday working practices sector-wide. This includes the music industry, real estate, insurance, fashion, and the energy sector. Almost every business, large or small stands to benefit from decentralized data marketplaces such as those developed using Ocean Protocol.

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