Bruce Pon: Data Monetization Model for the Decentralized Web

Great. Thank you. Thank you for inviting me to speak is my slide showing.

Okay, good. Excellent. So just give you a quick background before coming into black blockchain. I did five years at a consulting firm and moved into banking to help build about a dozen banks and industry startups in Europe, Asia, and north America. During the 2008 financial crisis, I wanted to have a more direct impact in giving people power in a world where automation, AI, and robotics were gonna take jobs.

And, and I'll tell you some of the work we've done in the field to advance the use cases. Well, as give you an idea about ocean protocol in 2013, in 2013, we jumped into blockchain ascribe.io aimed to put IP intellectual property under blockchain and make digital collectables scarce. From there, big chain DB was developed and it married blockchains with databases, turning data into tradeable assets and establishing us as kind of pioneers into crypto space. We sensed that the confluence of blockchain, AI and data was going to be a lightning charge to spark a data economy.

And the premise is that if blockchain could be used to secure Providence of data and the claim of intellectual property, if blockchain could act as a transport layer for value and data, and if blockchains could be used to manage to access that value, then it could be the perfect mechanism to unlock data silos, because it could give access to data. If the right amounts were paid and the conditions of access fulfilled without any intermediary, more importantly, this vision aligned with our core value to equalize access, to opportunity and give people back control of their ideas and their data.

We need to give people the ability to add value in a society, the ability to take their ideas and sell them in a way that's borderless and global. And we need to give people the ability to own their own data and control where it goes and who gets to use it. And our teams work since 2013 blockchain and prior experience in industry has given us unique experience to design and deploy a system that can help kickstart a data economy. Ocean protocol allows people to buy and share data securely while preserving privacy. And we want ocean to become the conductive tissue for our new data economy.

We see a world where data is an asset that is fairly priced and where people can share their data safely and receive compensation. Let's look at the two main problems that we need to solve. People need comfort, security, and control to share their data. How can we give it to them so that they can freely share just like Uber made it completely normal for people to jump in a stranger's car or a driver to let a stranger into their car. We need to make it completely normal for people to feel safe, to share their data when the natural instinct is not to. And second, what is the value of data?

Give data is shared. What is the right price? Because there hasn't been a lot of data sales in the, the market is relatively illiquid. If there is trading or sales, the knowledge is locked up and held by a very narrow group of participants. So any solution that tries to unlock data needs to solve this pricing problem towards the first problem, comfort security control. We built V1 and V2 ocean V. One was released in late 2019 about a year and a half ago.

It had the basic access control mechanism built into smart contracts, meaning that for the very first time access to data sets could be managed without a third party in this way. One could, for instance, Daisy chain, a set of instructions for access control and build kind of an autonomous data service pipeline and orchestration that runs on its own essentially runs on smart contracts.

And so like a honeybee visiting multiple flowers to gather pollen, ocean B one allowed a data scientist to own the entire orchestration process, which itself is intellectual property, as well as control how the data process functioned ocean V2 was released in the spring of 2020. So just over one year ago, and this release gave people the ability to share data without exposing either the data or the algorithms we called it compute to data because it brought algorithms into a secure container, held with the data provider and the data would stay.

I situ with the data provider, never moving the computations would be performed safely for everyone. And once complete the results would be sent back to the consumer and the secure container would be wiped. Both parties benefited a, a data provider unlocks the latent data that is a valuable resource for someone and the consumer gets access to private data that they might not normally have had access to.

So with ocean V one and V two, we completed a pilot project with Daimler, the company behind Mercedes-Benz in Singapore, building an end to end solution that used the entire stack of technologies that we had built. The goal was to share supply chain information amongst an ecosystem of internal and external suppliers while allowing data to be monetized the project enabled Daimler to build a secure enterprise B2B data marketplace, to monetize and put data to work.

As everybody probably knows, Daimler has an international footprint where every business unit can participate in a data sharing ecosystem internally and externally with service partners and the need for easy data sharing across this complex company structure calls for decentralized technologies where onboarding user authentication and sharing can be activated while ensuring security and allowing participating companies to maintain control over their data. This pilot is an important step for Daimler to become a data driven company and an opportunity for data sharing with clear incentives.

And this project is continuing as we speak. So with ocean V3, our latest release, we released the end of October. So just about three months ago, we moved towards solving the second problem, which is what is the value and price of data in ocean V3. We have three concepts, data tokens, ocean market, and initial data offerings. And I'll talk about each one and then bring it all together. Data tokens are crypto tokens. They wrap access to a given dataset. So each dataset gets its own data. Token.

A consumer buys a data token to get access to the dataset and the ocean smart contracts manage everything in the middle without any person to manage that process. It runs on smart contracts and since data tokens are ERC 20 tokens, it's a specific standard of crypto token. They can be bought, held and traded like any other crypto token. They use existing infrastructure on Ethereum, which is kind of the, the leading smart contract platform.

They use that existing infrastructure like wallets exchanges, market makers, which has a global community of about 30 million people and is growing exponentially like the internet did. We're probably about 1997 right now. And so data tokens are a simple but powerful construct that unlocks kind of a universal potential for accessing data and ocean market is an application that's built on top of the smart contracts. It is kind of the user interface layer that exposes all that good stuff in the smart contracts, as well as those data tokens.

And it creates value from the data by exposing that data, using a front end, the ocean market gives people the ability to publish, generate, publish, and generate data tokens, stake, and consume data tokens. And there are three actors in, in, in this ocean, B3, this ocean market, there's consumers, there's publishers, and there's stakers data publishers naturally bring the data to the marketplace to sell out a fixed or dynamic price. The publisher is the owner or legal custodian of the data.

And the data consumer of course, is anyone who wants to purchase the data for their reasons for research AI, what have you stakes are the third piece? And they add ocean token to crypto token into a liquidity pool for each data set, which is, which is in a sense of price, prediction market stakes bring a market signal to the value of each data set. So the more popular and useful data set is the higher the liquidity pool and the higher the price for someone to access that data.

So stakes are essential for giving a price signal on a data set where maybe a publisher didn't know what the value could be and the community helps them to find out. So when a data provider publishes the dataset, they choose a fixer dynamic price, fixed prices, straightforward. Somebody just buys a data token using that ocean. And then they consume the dataset. A dynamic price data asset is more interesting where ocean market supports automatic price determination using automated market makers. And the moment a data token is generated.

A publisher can go straight up to setting a pool where then people put their tokens into, to help give kind of a public signal. And this measuring and pricing of the data is pretty innovative.

It, it allows the hive mind to come together to find out what's the best price for a data token. And it uses some really interesting ideas because there's already technology that allows these types of data, tokens, and liquidity pools to have kind of liquidity. You can essentially have a stock like dynamic on data assets now using this data token. And that is something pretty innovative. So imagine if you're able to securitize the data flow that comes out of Google, what would that be worth? It would for sure, be a new line item in the balance sheet for Google.

And now what happens if they securitize it and actually do something like trade it, trade it off. So these are some of the things that ocean market now allow, which is pretty innovative.

And so, as I said, this concept of allowing your data to be securitized leads to the idea of an initial data offering, where if there is enough support behind a data set, a community can now form around it, add enough liquidity where the price is very dynamic. And the actual ownership of that data token becomes valuable. Not only is that data token give you access to data. The data token itself has value in a liquid market. So we're combining two ideas here. Number one is access control.

So data token as the key that opens access to dataset, but at the same time, the data token itself is an asset pretty cool. So this allows data to be priced by the market. You are using technology that isn't standing in the way anybody can use this from anywhere on earth. All you need is to be kind of onboarded into this Ethereum network. And when there's sufficient liquidity and maturity, the data token could have, could be considered to have iPod it's freely tradeable in any exchange. And people are incentivized to share data now because they know they can securitize it.

They know that the data tokens have value and the ocean market, the reception was quite a surprise. On the first day we had dozens of data sets within a week 500. We had millions in liquidity and thousands of people.

We, we essentially maxed out all of our resources and we had, you know, by now probably 2 million page views and a lot, maybe a hundred thousand transactions. So it's, it's a really interesting experiment. We're excited to see what can be done with it. And I what's really cool is that there've been about a dozen new startups that have formed around the market in the time that we launched at the end of October, beginning of November, they're trying to sell data services, analytics tools so that people can understand this kinda like the moods or S and P 500 around data assets.

They flock to the community. And so we have startups that are now forming an ecosystem around this whole concept of securitizing monetizing data. So we'll go to the end up until now. Everybody looking to provide data for sale would need to set up companies, figure out the back office, build sales and distribution channels, and then provide the actual value of the data with ocean V3. These barriers are much, much lower. If a data scientist has a valuable data set, they can publish it directly on ocean market. Within a few hours, someone might have already bought and used the data.

And meanwhile, the market price has been set by the community on their behalf. We think this is revolutionary. So just like the internet made it possible for anybody to be a publisher for no cost. Airbnb made it possible for anybody to be a hotelier without all the investment. Uber made it possible for anybody to be a taxi driver in their spare time. Ocean V3 makes it possible for anybody to be a data provider, a consumer, or a Staker.

And we believe it's the first step to break the data monopolies because when people know the value of their data and they have the means to sell it and get a fair price, they will demand control back from the Facebooks and Googles of the world. And our solution is unique. We allow people to monetize data and give them the opportunity to earn money from their data. We don't know of any other project. Who's taking a similar approach. And we think that the idea of securitizing data or data streams making it liquid and tradeable is now here to stay with that. I'm gonna stop we're 16 minutes in.

I believe I have four minutes for questions.