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AMA Highlights – Ocean Protocol

By 02-Sep-2020 No Comments

AMA Highlights – Ocean Protocol

By Daniel Dal Bello, Director.

August 30, 2020 – 9 min read.

On Thursday 2 July, we welcomed Bruce Pon, Founder of Ocean Protocol into the Hillrise Capital Telegram chat for an AMA. Ocean Protocol’s token OCEAN has been on a sharp upward trajectory over the past few months since our conversation with Bruce. This is due to a mix of strengthening fundamentals, increasing awareness of the company and their technology, and speculation alike.

Bruce has studied at MIT and has an extensive background including time at Daimler AG and as a founder of several startups. Bruce’s first work in the blockchain world came in 2014 with ascribe.io. Bruce is a founder of both BigchainDB GmbH and Ocean Protocol.

In this post, we have compiled key questions and answers from our AMA event.

Daniel Dal Bello
Bruce could you start with some background and insight into your individual background prior to Ocean Protocol and especially prior to joining the blockchain space? Where does data fit in with blockchain tech?

Bruce Pon
Thank you for having me and compliments to you for gathering an enthusiastic community of crypto-enthusiasts here. I have been working on blockchain since 2013, around the time when BTC had a peak of $1,300. We started by working to put intellectual property on the blockchain with ascribe.io, like what CryptoKitties, SuperRare and others are doing now.

Then, realizing that the idea of NFTs was too early for this stage of the technology, we pivoted to BigchainDB – a database with blockchain characteristics. This was a good move because it gave us some of the earliest insights about how companies and individuals could share data using blockchain. After 2 years on BigchainDB, it was clear that the confluence of AI, blockchain and data would be a massive opportunity. And that if we could leverage the advantages of blockchain for access control, tracking and provenance, we could equalize opportunity for everyone around the globe – this became Ocean Protocol.

“It was clear that the confluence of AI, blockchain and data would be a massive opportunity.”

Daniel Dal Bello
It’s interesting to hear that you’ve been in this space for so long and that Ocean Protocol was where everything culminated for you with your past in BigchainDB.

Could you explain Ocean v3 in layman’s terms? What are data tokens?

Bruce Pon
Sure, happy to. In a nutshell, it is decentralized access control. Most people know the advantages of blockchain relating to transparency, auditability and custodian-less control. One feature of blockchain that is particularly useful for data is access control.

Imagine trying to attend a very popular online event with limited access, a private event, a concert, a speech with Elon Musk. Instead of whipping out your Visa and buying entry using Eventbrite, the tickets are issued as “Data Tokens”. These tokens are transferable, so the person buying tokens doesn’t need to attend themselves, but they can resell them. Nowadays, people might call it scalping – but there are some nice advantages in a blockchain world.

Here are some features:

1. The buyer can come from anywhere on earth, without needing to have a credit card.
2. The access tokens could be put on an exchange, where the price fluctuates based on demand, transparently and [they are] available to all.
3. When the event starts, people use/spend the token to enter the event.

This is Ocean v3 in a nutshell.

This means that access has been decentralized and [is] available to everyone. It applies to data, but also to any digital asset, events, software, subscriptions, news, etc. We think that the tools of DeFi will allow data tokens to integrate and inter-operate with the Ethereum community and other smart contract platforms.

Daniel Dal Bello
Further to that example you’ve just given, how would you have these tokens tradeable like you mentioned? Would you create some kind of marketplace for that?

Bruce Pon
You can now use bootstrap liquidity [with] providers like Uniswap, Balancer and other DEXs for this. We imagine that in the future, there might be category-specific “access control token” exchanges. Imagine “Binance Token Exchange” that deals in collectibles, data tokens, events, etc. It would unlock a huge untapped “Data Economy”. One of the learnings from the last couple of years is that a protocol is most adoptable, when it is a tool – like Uniswap or Balancer. Then, other services rally around and create a stronger ecosystem along with the tool.

“One of the learnings from the last couple of years is that a protocol is most adoptable, when it is a tool – like Uniswap or Balancer.”

Binance and other exchanges have a large role to play because they are already used by crypto-enthusiasts for token trading. I’m noticing that more and more projects are announcing their mainnets. This is really good. It means that the money that flowed into the space in 2017, 2018 and 2019 is now being instantiated in code and products. All of these products will work together as building blocks to rebuild our financial system.

Daniel Dal Bello
We had a question before about the OCEAN token, could you give a brief introduction into the need, utility, and use of the token?

Bruce Pon
Sure, we get this a lot. We are working to make OCEAN, the glue that binds the ‘Data Economy’ together. What does this mean? OCEAN needs to take on many of the characteristics of money – a store of value, a means of exchange, a unit of accounting, and crypto-specific utility like staking and governance. We are imbuing these utility features into OCEAN over time, similar to how Binance has constantly adjusted and expanded the utility of the Binance Token, so that more value is captured in the token in parallel to the utility offered. With v3, we will simplify the Ocean architecture so that OCEAN token will interoperate with DeFi – opening up possibilities for staking.

Using the tools of Balancer and Uniswap, you could have “IDOs” – Initial Data Offerings, where OCEAN is the reserve currency. In Ocean V4, we would deploy an OceanDAO, where the governance is managed via token holders. All of these capabilities, on top of the basic ones – means of exchange, unit of account – give OCEAN utility to bring all the pieces of the Data Economy together, while working with the rapidly expanding DeFi space.

@bazerka
I read [that] in 2017 you built AVDEX with Toyota, any chance you could shed some light on that Bruce?

Bruce Pon
AVDEX was a prototype data sharing marketplace using BigchainDB technology for Toyota. Much of the work on AVDEX was rolled into MOBI, the Mobility Open Blockchain Initiative. AVDEX was the trigger to help us realize that data, AI and blockchain needed to be permissionless and open – leading directly to Ocean Protocol. The protocol itself is deployed on Ethereum and in our own Ocean PoA network. And for people to use the protocol, a marketplace front end with additional features is necessary. This reduces the friction for onboarding developers and expands the catchment area of developers that can play with blockchain. Not everyone is a smart contract or protocol expert so the marketplace abstracts many protocol functions and allows developers to just get going. Think of Shopify for data marketplaces, except open and permissionless.

Here’s where we get to enterprises. Enterprises, startups and developers can all use the Ocean marketplace to sell their data. They can fork the code, or create a whitelabel marketplace. This is enough for startups and developers, but enterprises need a bit more. They tend to want to go deep into the guts of a protocol, because they have more requirements. Also, they tend to need more features. We are actively working with several enterprises to help them learn how to share their data. It’s a harder slog, but it’s valuable to have the full range of company types trying out Ocean – especially because enterprises have the lion’s share of data that is being unused.

@bazerka
Another question from the community Bruce, could you explain GAIA-X & Oceans involvement?

Bruce Pon
For GAIA-X, for context, this is an EU initiative to establish sovereignty over data and AI. EU has seen that most of the internet innovation and value capture has gone to Asia and the US. Funnily enough, a significant portion of the research that went into the internet, was funded by the EU. So, GAIA-X is meant to not only support research but also commercialize AI and data, and not leave the value to others. Ocean is active in the GAIA-X working groups.

We’re also collaborating with specific members. Some of the funding from BigchainDB came from EU grants, and there might be more EU funding in the future for the work we’re doing, but nothing active at the moment.

@ichimokurain
Who are main stakeholders in Ocean Protocol? And what existing industries will benefit most from Ocean Protocol?

Bruce Pon
We believe that everyone is a stakeholder in Ocean Protocol, whether they know it or not. I think that non-internet companies will benefit. Think of pharmaceuticals like Roche [Pharmaceuticals], who have a lot of clinical data that they want to share but can’t. Or automotives like Daimler who want to improve internal processes and share autonomous vehicle information. Ocean Protocol levels the playing field for everyone – people against corporations, corporations against internet giants, and governments against internet giants and corporations.

@cp970x
What are the possible connections between Chainlink and Ccean Protocol ? They [Chainlink] deliver decentralized oracles. How can Ocean Protocol benefit from that?

Bruce Pon
I remember speaking with Sergey [Nazarov] about Chainlink in 2016. It made a lot of sense to have oracles outside that blockchains and smart contracts could read. The obvious benefit of oracles and data is how exchanges might use oracles for price feeds to stop attacks from hackers that want to manipulate prices.

Imagine a betting pool – say the possibility of one soccer team beating another. You set up the prediction market, inject Ocean for data feeds and Chainlink as oracles for the end result. If M of N oracles say that Liverpool has won, then the smart contract in the prediction market pays out. Ocean would be used for the multitudes of data that is being shared.

@bazerka
How will enterprises benefit from using Ocean Protocol?

Bruce Pon
If you look at companies that share data right now, it takes millions in investment to set up the infrastructure, data feeds and marketplace to sell data. This means that only companies like Bloomberg, Axios, Reuters can sell data. It’s their only business. The cost of coordination is too high for most others. With Ocean, everyone can play the game and be a data provider.

Two examples that people should be able to relate to:
1. Internet – it allowed everyone to be a publisher, influencer or opinion maker, not just big media. Individuals could amass audiences in the millions for providing content.
2. Market-making – before Uniswap, Balancer, 0x, it would cost probably $100-500k for someone to offer market-making services. Today, with Uniswap and Balancer, it costs $5 in gas to deploy a liquidity pool and $5 to inject the liquidity.

I boggles my mind what other aspects of the financial world and capabilities will be subsumed by blockchain and DeFi in the coming years. You’re talking about a reduction in cost from say $100,000 to $10. Four times the order of magnitude reduction in the cost of coordination. So to close out the enterprise question, if right now it costs $1-10m for an enterprise to get into the data marketplace game, can Ocean reduce that to $10?

If so, this changes the game for everyone to share data. Just like Amazon allowed millions of out-of-print, rarely ordered books to be consumed – to the betterment of millions of people.

@martijnvdweerdt
To what extent is Ocean also targeting other industries besides the ones we’ve publicly heard of? For example, open banking but also multi-player and cross-industry insurance platforms seem to possibly benefit a lot from sharing data. Are you actively exploring these markets/conversations with companies in these sectors?

@BlockUnify
Hi Bruce, why do automotive companies benefit Ocean? Is there a use or does it help

Bruce Pon
I can answer these two questions together. Blockchains and enterprise is a tough algorithm to crack. You need to align the capabilities and capacities of the team with the level of interest and commitment of the industry/enterprise.

How we’ve decided to handle this is:
1. Focus on the core platform.
2. Build an ecosystem of partners and developers that understand the protocol.
3. Guide inbound interest to partners and developers, after an initial test/trial period with an enterprise to ensure that their use case is valid/doable.

By using this basic algorithm, we can balance the capacity limitations of the core Ocean team while managing the inbound. And what this has come to is that we are working on logistics, automotive and health sectors right now. There are definitely other industries that can benefit from Ocean, but we don’t have the capacity. We want developers to join us, use the tech and then we’ll happily hand over leads to them.

@BlockUnify
I understand Ocean has a roadmap, but where do you hope to see the company in the next 6 to 12 months from now?

Bruce Pon
Thanks for the question. Since 2017 when we released the whitepaper, we said we would deploy a network that could enable data sharing. There were 5 steps: network, compute to data, data tokens, decentralization and funding (DAO). We’re on track to deliver our promises, on time.

After v5 (decentralization of the platform), then we need to focus on adoption. Here, I see us increasing the outreach to developer communities. Using the OceanDAO as the funding mechanism and the network reward inflation, the community will decide where resources are deployed so that Ocean remains vibrant and growing. In fact, Trent and I want the Ocean community to decide whether we get a salary/grant to continue working on Ocean. And this will go the nth level in Ocean. The OceanDAO will distribute Ocean tokens to community members, much like the Ethereum Foundation does so now. It can be for community outreach, developers, core contributors.

Daniel Dal Bello
Bruce, this has been amazing. Thanks so much for giving such detailed answers here.

@bazerka
Thanks so much for the time Bruce.

Bruce Pon
Thank you everyone for your questions. I appreciate that Daniel and Colin invited me. You guys have been very good.

The text in this summary has been adapted to correct grammatical errors and for presentation purposes. We thank our guest Bruce for joining us for this AMA. For more information on Ocean Protocol, visit https://oceanprotocol.com/.