DeFi By Design EP#22: Web 3 Data Economy

Transcript

welcome to d5 by design where we talk all things blockchain and cryptocurrency while striving to educate empower and enrich what's going on guys real quick break for the d5 by design podcast sponsors and a defy slate sponsors who make this all possible first we have ave a money market protocol that allows you to borrow and lend and leverage your assets to earn interest uh right so if you want to deposit some stable coins in there currently you can get three four five six eight percent apys on stable coins which else any bank in the world uh as far as we're concerned you can deposit uh any uh ethereum based asset that is listed there borrow against it you can borrow stable coins you can borrow other assets like ether wi-fi

link even the ave token itself ave is the go-to protocol for any sort of borrowing lending check it out at app.com the next one we have is access auxis is a new crypto wallet auxis.com you can store all of your crypto there they have quite a few options uh they're integrating new dex features soon um and allow you to have a non-custodial way to store your crypto safely off of centralized exchanges and also just not in a meta mask or in your own ledger a bit of extra security there next we have mcdex mcdex is a decentralized perpetual swap protocol basically allowing you to trade on leverage uh on the ethereum chain right they're coming out with v3 very soon at that time you're listening this might already be out they are super

solid team um and they're pumping updates and allowing you to trade decentralized perpetual swaps on eth link and a few others all on ethereum all decentralized so that is mcdex next video ramify ramify is a decentralized stablecoin it's an algorithmic stablecoin that is pegged to the purchasing power of commodities and then basically it measures what value one dollar buys in terms of a commodity index each week and then it provides you with essentially a store value that allows you to continuously evade inflation while maintaining you know a stable aspect as if it was a dollar and that is the ramify protocol check them out on twitter finally we have diversify it is an l2 decentralized exchange they allow you to basically trade in a

gasless and feedless manner big volumes whatever quantities you need it's almost like a centralized exchange on ethereum but you are the custodian they do not hold your coins as a centralized exchange would you have full control full power so really it's almost like centralized exchange capabilities on a decentralized exchange and that is diversified all those sponsors make this possible i know it's a lot to take in but thank you very much for listening and let's get back to it what's going on guys welcome back to another episode of the d5 by design podcast today is a good one like every day we are working away and building in the crypto world not just trying to pump the markets but the markets have been pumping recently so

like usual our viewership is up the hype is up people are getting after it protocols and teams and folks are all trying to collaborate integrate and i mean honestly it's just a flourishing time right now it's been extremely enjoyable we are here with a member of the ocean dao and the ocean team his name is alex i'll let him introduce himself you know kind of how he got into crypto what his role is what his interests are and then we'll dive right more into you know just more stuff about what's going on in d5 and in the crypto space right now what's up alex hey andy thanks so much for for having me yeah so my name is alex navys i work on ocean dao member of ocean protocol my background's in product growth and community growth

uh have been researching crypto economic incentive models for quite some time and have been investing in the space since uh late 2015. actually uh ended up co-organizing the sf ethereum developers meetup through 2017 currently uh really excited about what's going on at uh ocean protocol that's awesome as soon as you said crypto incentive models i mean my brain just instantly triggered because the game theory conversation is i mean it's one for the books we've seen it a lot in the way that a lot of tokens have been uh created and distributed in 2020 and now in 2021 with kind of the era of yield farming and fair launches and distribution and even this this now concept which was kind of sold to us in 2017 2016 it's now fruition which is

the aspect of of governance so definitely keen to hear what you think about token incentive models that have basically popped up in 2020 in terms of the fair launches the yield farming slash what's known as liquidity mining kind of one in the same um and as well as like the governance structure so i just want to on a broad scale you know what's been your takes on kind of how it shifted from say the ico or the pre-sale experience to kind of what we have now absolutely yeah so in that like ico boom like resale experience there was a ton of networks that were like they were minting network marketplace activity before any had like taken place um so now what now we're seeing is more utility

and more work being done on these crypto networks for you know actual use and people earning um those uh network rewards and so it's pretty interesting right now for the especially like d5 products is that uh you know they're getting adoption they actually have some real use cases and uh folks are generating yield and you know they're even competing against each other akin to the susi swap unit swap uh vampire attack and so once you kind of get this network you know flywheel going what are those how do the stakeholders those token holders dive in and actually start to participate in with what's going on so that really is and leans into uh governance and you know we've seen so many different flavors

of how this governance has metastasized metastasized and you know whether that's a pure play uh dao or different you know tweaks on doubts so ocean dao is a grant style and you know other dows have you know grants and sort of like protocol improvement proposals as well in their in their governance so a whole spectrum of blends to you know how how to do uh governance uh sort of effectively nice yeah i mean i i tend to agree with the shift as more of a power move in terms of incentivizing players to be active to participants in the market rather than um you know simply just token holders

however obviously we're a long way to go in terms of what governance is the best and you mentioned ocean down and kind of how that's been uh you know growing and creating itself into you know full-fledged organization of people who kind of have like the same i wouldn't say like ideological views but same same kind of path and mission in terms of the way that uh you know they foresee the ocean protocol and you know the the idea of global decentralized public networks kind of growing and creating um on the dow note it really it's really interesting to me because um you know this might not be politically correct however i truly believe that the that the biggest use case for dows to really come to fruition in our world is legal arbitrage

basically being able to go borderless and conduct activities in business and build an organization that isn't stuck within one state or one nation state but is basically under the global law of the world which kind of comes down to morality and common sense and and public goods you know would you agree or would you disagree with that what's your take on kind of the fruition of dao's coming to uh to actual life yeah that's what's so beautiful about smart contracts right so in the first inception of smart contracts kind of in the earlier days of ethereum you know we saw these experiments and tests in um you know financial ecosystem experiments like oh what happens if we do finite supply or inflation you know

locked up vesting you see that the world was your oyster for experimenting and on that same vein with the bundle that ethereum or rather smart contracts offer across different smart contract layer ones like you can do these governance experiments as well so uh whether that's uh endows like one token one vote you know more like egalitarian voting you know just the realm for design space is just really really really massive yeah definitely so talk to us a bit about how the ocean dow is comprised you know how is it created you know how many folks slash how much capital is allocated in the dow you know and then basically yeah how are decisions made it's super i think uh you know to give a lot more

context about ocean dao it's helpful to back into uh how ocean dial fits into the uh greater ocean protocol and then um you know that that gives a lot of uh context to folks so yeah so ocean protocol itself is a technology that enables the creation data markets and the ability for users to monetize uh data through access rights so uh just like we have the sharing economy which has allowed anyone to be a hotel with airbnb or a taxi driver with uber ocean provides the rails for the data economy anyone can bring their data to market and be a data seller a data provider or data seller or provider

or be a consumer on that two-sided marketplace so the two main problems that ocean really solves is access to data and privacy uh one and two uh valuing data that's kind of the what and the why behind ocean protocol is buying and selling data to date is really a liquid uh you have these siloed third-party data providers uh which with incredibly complex setups legal compliance gdpr distribution channels and you know how do you even value that data um you know is it based off of uh just some negotiation you had behind closed doors or someone really wants it so you're gonna hike up the price so this is why kind of this open data marketplace

is um is really needed so kind of you have this open protocol that is uh ocean allowing you know open data so this substrate has been created and to transact on the substrate the medium of exchange is the ocean token so how do you get this flywheel of economic activity going and how do you really grow this protocol and so as more and more marketplaces pop up on ocean protocol and as uh more folks start buying and selling data you know kind of this ecosystem can evolve so one way we can incentivize the growth of the ecosystem is through funding

uh grants that for projects to build on the ocean protocol so this is the crux of ocean dao so ocean dow is community curated funding for projects in the ocean ecosystem so uh backing into your your original question there are four main types of projects that oceandao looks for to be able to kind of grow this overall network value uh the first is projects that are building apps or integrations on oceandao the second is uh projects that are unlocking data for the ocean ecosystem third is projects that can contribute to the core uh ocean software and fourth they're just less technical activities

just along the lines of uh marketing and communications um so that's kind of the scope and reasoning why for ocean dao and then um yeah i can back into kind of the operation execution of ocean dao so we started ocean dao in q4 2020 with our grants funding round one so uh with that we were how do we set up this framework for projects to come and um you know get them funding so we allocated our our first funding for uh five projects to receive uh 10k ocean and then there was a inaugural uh grant round bonus of three thousand ocean so

uh each of the five projects got 13 13 000 ocean and uh so that process was a really interesting um you know experiment because we're going uh if you're familiar with it peter thiel you know zero to one we are literally like incepting this uh grant style program so uh what are the components of that software stack so we have proposals can come in we have our discussion forum where people can uh talk about ocean dao so that's lives on discourse and also on proposal feedback and then we have our voting so we're using uh snapshot balancer spin-off for proposal voting and then we have funding be released so our token holders can

come and vote on our proposals and then as mentioned that fund those funds that we've set aside uh can get deployed to projects looking to contribute um so yeah that's kind of the uh long story short of uh kind of the the reason why and how it's implemented and can talk about uh growth if you're interested as well yeah yeah so effectively ocean protocol is a data marketplace which is obviously going to be huge over the next 10 20 you know even the next few years it's a game of chicken right now with youtube and facebook and google and basically having this market all to themselves it's gonna open up billions of dollars for average people like you and i to basically be able to monetize our own internet usage rather than having it be

you know given to other corporations who monetize it for us right because if we can if we create actual data online that can be sold to advertisers in a fair manner and they can use that data to target you know folks like us or like you know people who are interested in things that we are interested in so that's kind of where my mind jumps to with like the big problem and the product market fit for where ocean protocol and the marketplace hits right so that's that um and then basically what you guys have done on top is built this dow in the last month or two that is basically meant to uh incentivize other people to basically come in and grow this marketplace you know for themselves and for the greater community and then with that being said um you know there are people in the dow

and token holders and people who come in can create proposals um even people who um are just interested right can ask for you know some sort of funding through a proposal right you know it's disgust talked about et cetera voted on the uh one token is one vote or what's the voting process absolutely yeah so um a couple of things there yeah so uh with the uh ocean dial you know as you mentioned people come in and so our token holders uh they are the network they are the ocean economy so as it's set up now is one token one vote and as ocean scales or grows we're really keen on experimenting with different types of uh you know voting setups and for now

yeah one one token one vote um which seems to make the most sense obviously there's people that argue that whales are obviously over allocated for for any sort of voting but as long as whales don't form a conglomerate and override or push through anything that they want i mean it's usually it's kind of like like the greater hand theory if they want it then it's probably better for all the token holders as well um so i tend to agree on that on that voting mechanism um which is solid so and then basically you guys are able to funds uh projects and protocols to help grow ocean uh so ocean dao is basically a subset of the ocean protocol which allows ocean protocol to you know grow and blossom but which is also i mean that's like the name of the game for creating you know adele

and helping the protocol you know what have been some of the challenges that you've seen being at the dow member right because obviously you know you only have a certain amount of tokens a certain amount of votes a certain amount of time you know what's been some challenges of operating in a dow that you've seen you know that you think other people and entities that are trying to create these organizations might kind of run into absolutely yeah so i'm a member of a few dows and also like going through the the process of creating ocean dao with uh our cto uh trent and getting feedback from our uh community so you know there's when you're creating something new really like this articulation of what this thing is uh is really really important so uh getting that branding and messaging out

of you know how to come and on board and go through the funnel because there are a few different components you know whether that's discussion or voting so understanding how those puzzle pieces fit in together and with regard to ocean dialect more specifically you can find all those resources on our website and on the ocean.wiki and then um yeah so there are some dow by doubt technical um kind of nuances and so just being mindful of uh what those are because uh just like in proof-of-stake how there's different flavors of proof of stake across different networks there's different flavors of you know how taos uh operate so quite later yeah something that would be a point of is that we're learning more from our dow members on is uh right now you can vote one token

one vote in your non-custodial wallet however we do have this mechanism in our ocean market to stake on uh ocean on ocean data pools so being able to vote uh with staked ocean is an important feature we're looking to implement in the future so people that need to remove uh tokens and you know incur some liquidity and permanent loss or other uh you know risks involved with like removing liquidity from fools um and then just round over round uh you know we one of the things we try to do is uh is growing the dow and let's just say that for ocean dial round one there was nine proposals however we were only able to grow fund five we like having um

the ability to have the community vote on which projects they think have that highest roi however you know it's we don't want to leave people hanging so we're really keen on getting those folks into the next round and being able to give them funding uh to try to create this a more positive sum experience as opposed to you know voting with uh finite resources so uh some challenges there yeah i mean it's definitely interesting when you have uh you know like you said a a group of people that are all trying to achieve what seemingly is the same thing but have different have different ideas and methods of doing so um i mean without a doubt being able to use staked tokens to be a voter is going to be crucial or be

a member i mean without a doubt because it basically solves a twofold issue that um you know i've seen be a big issue for a lot of protocols and the way to solve it is basically yeah you know you use uh tokens that are staked in the protocol or in liquidity pools you know being able to use those as a way to represent your tokens on snapshot to vote or on discord or on chain boating which is eventually probably going to come um and be actually useful you know that's that's huge i remember i was working with acropolis a few months ago and they had that same issue of wanting to incentivize people to participate in governance but also not wanting to you know have them remove all their liquidity from

unit swap and balancer in an attempt to be able to participate right because then it kind of it basically lowers the opportunity of your protocol to grow if you don't have a lot of liquidity i mean the name of the game in this decentralized world is liquidity i mean that is how you are able to grow and get basically big players involved you know if you have a liquid market um i'm kind of keen on what you think about that with with regards to ocean protocol um you know what are some of the ways that y'all have been able to grow your liquidity over the years obviously you know the protocol has been around for at least a year if not two three years you know so what what's some of the ways that y'all have seen to grow that you know the liquidity and kind of your

community as well i'm asking basically what's been helpful to growth that you've seen you know what what has been extremely influential absolutely yeah so um we've had a few different phases of ocean protocol so ocean v1 was really around access control mechanisms for data using smart contracts version 2 was around privacy compute to data and v3 was this inception of the ocean market along with data tokens and ideas initial data offerings so you know while ocean token uh can be added as like a liquidity pair on you know a unit swap or a band core

or um sushi swap you know just in the traditional um you know two two token like an e uh ocean pair uh with the inception of ocean market you can actually kind of stake your ocean natively with a data token as a pair with a data access right token as a pair with ocean so as opposed to you know stakehond on uniswap with ocean eath you can come to ocean market and stake ocean uh data access uh token which is this really cool uh primitive that's uh you know really the the crux of uh ocean protocol and you know when it comes to growth uh the

inception of ocean v3 creating this marketplace uh was um you know this really uh miraculous aha moment because before uh you could how would one uh go about peer-to-peer uh buying and selling of data and you know in this in this open uh in this decentralized world you couldn't really do it so ocean market uh you know created the ability for anyone who had data uh to have a two-sided market and we're seeing a ton of interest um for for sellers so when it comes to staking so a data publisher or seller creates a data set that they want to sell and then they can either do that

with a fixed price or creating a market you know using an amm for that data asset so that's where you would come and provide liquidity on that specific data asset money yeah so on like a broad scale it's basically not taking the liquidity from the other amms and bringing it to yourself but basically giving token holders an option to stake and to use their tokens on the ocean platform and protocol which goes for you know staking your ave tokens in ave rather than providing them on your swap or staking you know using your sushi on the sushi platform right instead of using it on a different platform it's kind of like the same kind of concept um which overall increases the network

value of the ocean protocol um you know it gives users an option and yeah it basically grows the liquidity overall um you know and that really bootstraps people's kind of opinion and belief of how much the token and how much the protocol is is worth is basically you know how willing are people to basically say i'm gonna buy this and i'm gonna put it in your smart contracts not only am i trusting you with the smart contracts but also trusting you with uh the token which are directly correlated because if anything wrong happens with smart contracts i'm probably going to be out um you know obviously these are rare black swan events are always possible in d5 you know but you know that is a huge vote of confidence um and yeah i would tend to agree i think that in v3 with

ocean protocols really helped um and shown you know you guys as a team and also the market as a whole that there are people that are confident in the protocol in the code and what the team is building so much so that they're willing to basically be lps and state and use their tokens in a native fashion on the protocol um now that being said how do you feel about lockups with tokens right so like staking lockups or lp lockups um you know obviously not for any senior ridge stuff which is you know like the algo stable coins where they have to try to stay at a dollar and incentivize people it's a little bit different when tokens are meant to be uh you know move in a directional way and not stay at a dollar so in that sense you know how do you feel

about lockups within you know crypto itself for staking you know do you like the concept do you not and then does ocean protocol incorporate you know any sort of up yeah so uh there are have been a few experiments uh you know so far uh uh more than a few yeah uh for lockups on um kind of these liquidity incentive uh so i've seen you know they're always around like these liquidity incentive programs so you have a kind of the front end of you know getting in uh earlier on the yield farming and uh you know higher roi and then you take your token and you know you can provide it recycle it as liquidity and then yeah if some of these programs and on top of the incentive you know require that lock up

i'm pretty just as an observer i'm pretty keen as an observer uh just to see how these first experiments go i don't really have a preference either way and then with ocean protocol we don't have lockups on our native uh ocean market providing a liquidity so you know folks can come in and out if they're no longer bullish or think that you data set will be useful and one of these things that we're looking forward to moving forward is uh you know later on our roadmap hopefully this year is uh a data farming program so you know folks can come uh provide uh liquidity now and they

collect fees on uh the data pools however like what are some extra incentives uh for data farming within um uh within ocean so no lockups however very interested in uh in these incentive programs absolutely yeah i mean that has been huge for 2020. and there's always there's like a meme yield farmers aren't loyal they just go to the highest you open such is true but you know there is an element of loyalty and preference when it comes to funds based off audits based off um you know incentives and trustworthiness and team etc so you know that should be really solid in uh on that note team to hear more about what's on the agenda for 2021 um before we get close to wrapping it up

here absolutely yeah so right on thread with this you know one of the biggest uh friction points for you know these yield farmers these crop rotators are you know this the gas price and congestion so you know and that's not something exclusive to you'll probably that's you know that is a total macro problem for uh anyone um you know trying to uh transact so uh one of our solutions to this is multi-chain support so looking at deployments uh on whether that's layer twos like xdi or uh looking at other layer ones like polka dot you know or cosmos you know these other implementations of ocean you know could help bring down the usability with regard to congestion and gas

so that's like a really um exciting development and then um yeah so in the ocean market itself uh integrating our compute to data feature is also uh you know exciting it's a privacy preserving element so right now folks come and they can buy data sets on ocean market however like what's a wave you can train an ai algorithm with maintaining privacy so the actual compute will go to the data container and the protocol will just send back the results of the compute so no uh privacy is really ever uh leaked that hasn't been um you know in the parameters set beforehand and then on ocean dow end yeah looking really forward to

scaling it round over round so folks that are interested in diving in with ocean dao and you know are really excited to grow uh kind of the web 3 data economy highly encouraged to check out uh our website and look at uh the funding opportunities that ocean has for bootstrapping um you know your project nice awesome yeah i mean that's exciting layer two is certainly going to be a main development for i'd say 99 of projects this year i mean as you seen as a player and a participant in the d5 world i mean like paying multiple tens of dollars for unit swap transactions or paying you know hundreds to

to deposit and borrow on urine or ave or compound or even in an lp pool on units well for sushi swap for one inch i mean it's just it just doesn't work um but was speaking with mark from ave their lead program the other day we actually just posted a video with them and he tends to think that they're very optimistic about you know what's coming in the next few weeks to a lot of d5 protocols in a few months for sure and so much so that we will have users that come into ocean protocol and ave and union swap and two swap and d5 and ethereum and metamask and all the tools and they'll never know they'll be paying cents and on the dollar for transactions next few months and years and they'll have no idea that we had to live through

such a time where it was 20 for a transaction so super excited for that and to see what ocean has in store with that learned a lot about the ocean protocol today as well as just about the overall ideologies with dows how they work kind of what your what your two cents was definitely something to explore with deep isolate keen to maybe potentially create a dial in 2021 would definitely need a lot of help um so i know that you're the guy to go to um you know and we really appreciate you coming on man so yeah thanks so much for having me and uh yeah highly encouraging folks to check out ocean market we have like 276 data sets on there already about a million ocean staked in the in

the market which is about half a million um converted dollars so if you haven't already it's it's a really frontier pushing experience to actually like oh here's here is the shadow data economy that i knew really nothing about because it was so behind closed doors uh with the tech giants and just to go from that amount of obfuscation into just total openness is really quite the experience so highly recommend folks checking it out and then as mentioned if interested in uh voting if you're an ocean token holder less of an endeavor than submitting a proposal highly encouraged to vote and yeah interested in building a

project come by and submit a proposal money exactly that's right baby i i love the openness of it and the ability for new people to come in with ideas um it's like a new wave of vc funding almost if you will um and it's beautiful to have um and yeah we appreciate you coming on alex uh this was episode 22 guys thank you for tuning in and listening and yeah you guys have a great day and thanks again alex thanks thanks for listening to the d5i design podcast until next time defy slave team