As of January 21, 2022, Ocean Protocol is ranked 136 on coinmarketcap. Founded in 2017 and based on Ethereum, Ocean Protocol provides a decentralized platform on which data can be traded, without a centralized institution controlling the data, thus fostering data democratization. ITSA has fully classified the OCEAN token according to the International Token Classification (ITC) framework and assigned an unique identifier.
Authors: Maximilian Bruckner, Christian Viehof
The tech sector is driven by data, and it grows rapidly, which can be seen by the sheer market capitalization of big US tech companies, whose business models are heavily reliant on data collection. There are many ways to make use of data but the key determinant for the huge valuation is based on their utilization in Artificial intelligence (AI). Modern AI systems are powered by algorithms called deep learning, which learn through unlabeled, massive amounts of data and can detect anomalies that humans would not be able to. Without big data, the utilization of such algorithms is nonexistent since their prediction accuracy depends on the data that gets fed into them because it is the basis on which AI systems are trained (finding anomalies in the data set).
Consequently, whoever oversees the collected data, whether it is medical data, data about our search preferences or anything else, controls the “fuel” of AI systems that power innovation.
The “winner takes it all” paradigm of the new economy is even reinforcing the fact that most data is in the hands of a few companies. This can be observed by looking at the market share of search engines in the US.
Figure 1: Search engine market share (Source: https://bit.ly/3r7mHG8)
All this lets us conclude that the use of blockchain technology for a common data marketplace could prevent centralization, add security and preserve privacy.
Ocean protocol provides a solution for the above-described use case, while shaping an environment that accelerates innovation and creating a more equal playing field for actors operating in the industry. This has been achieved via decentralized data marketplaces that utilize blockchain technology for handling the exchange of data.
Concretely, this means that ocean protocol enables users to buy and sell data in exchange for so-called datatokens. While the native OCEAN token is used as a settlement and governance token, to stake on data as well as a medium of exchange within the Ocean Protocol. Datatokens fulfill a different purpose. Datatokens run under the Ethereum ERC-20 standard and give the owner access to copyrighted data. The data supplier stores the data off chain via services like Google Drive, Dropbox etc. and uses an Ocean application called “Datatoken Factory '' to mint datatokens. The data supplier can also decide the properties of the datatoken, such as the number of times the owner has access to respective data or whether the owner of the datatoken has access to manipulating the data. To prevent double spending of the ERC-20 datatokens, Ocean keeps track of their owners. Like a container, enabling easier transport of goods, datatokens enable quick and easy transfer of data using blockchain technology. Thus, data assets, in the form of datatokens, can be held with traditional wallet providers such as Metamask or traded on exchanges like Balancer.
Figure 2: Associated projects of Ocean (source: https://bit.ly/3Hjbmsc)
The Ocean Market is essentially a decentralized exchange, adapted for data. Here you can publish your datatokens and create liquidity pools, powered by Balancer under the hood, existing out of your datatoken - OCEAN token pair. This enables automated price discovery via AMMs, staking on data and earning transaction fees in the form of OCEAN tokens. In addition, with this solution, the quality of the data is reflected by the amount of stake, as poor data sets may not be attractive due to lower demand.
The data shared through the Ocean Protocol can be private, and the large market capitalization of major U.S. companies is justified in part by the fact that they collect this very data, whether it's medical data collected through smart watches, or buying behavior collected through search engines. To democratize this data as well, while preserving the integrity of the data suppliers, Ocean provides another important concept called “Compute-To-Data”. Here, the user deploys his algorithm to “Compute-To-Data '' and the algorithm gets trained with it. After that, it is sent back to the user, thus datatokens do not represent the right of accessing the data, but rather represent the right to access a trained algorithm or other statistical features such as means or medians. In this way, the privacy of the data supplier remains untouched, while buyers receive their desired models or statistical characteristics.
Economic Purpose (EEP): OCEAN is listed as a settlement and governance token (EEP22TU03) due to its design as a means of transaction settlement within the Ocean Protocol.
Industry Type (EIN): The issuer of OCEAN is active in the field of software, data storage and processing (EIN05DA05).
Technological Setup (TTS): OCEAN is an Ethereum ERC-20 Standard Token (TTS41BC). The Class “Ethereum ERC-20 Standard Token” captures every token that is implemented by means of the ERC-20 Standard on top of the Ethereum blockchain.
Legal Clam (LLC): The OCEAN token does not entitle its holder to any legal claim or rights against the issuing organization, therefore it is listed as a No-Claim Token (LLC31).
Issuer Type (LIT): The dimension “Issuer Type” provides information on the nature of the issuer of the token. Ocean’s blockchain platform is built by an expert team of engineers and researchers in the field of computer science, AI and blockchain. It’s Issuer Type is a Private Sector Legal Entity (LIT61PV).
Regulatory Framework (EU) (REU): The dimension “Regulatory Status EU” provides information of the potential classification of a token according to the European Commission’s proposal for a Regulation on Markets in Crypto Assets (MiCA, Regulation Proposal COM/2020/593 final). The OCEAN token qualifies as a Utility Token according to the definition provided in Article 3 (5) of Regulation Proposal COM/2020/593 final.
The International Token Standardization Association (ITSA) e.V. is a not-for-profit association of German law that aims at promoting the development and implementation of comprehensive market standards for the identification, classification, and analysis of DLT- and blockchain-based cryptographic tokens. As an independent industry membership body, ITSA unites over 100 international associated founding members from various interest groups. In order to increase transparency and safety on global token markets, ITSA currently develops and implements the International Token Identification Number (ITIN) as a market standard for the identification of cryptographic tokens, the International Token Classification (ITC) as a standard framework for the classification of cryptographic tokens according to their inherent characteristics. ITSA then adds the identified and classified token to the world’s largest register for tokens in our Tokenbase.
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Nick Allgäuer is an Executive Director at International Token Standardization Association (ITSA) e.V., working to create the world’s largest token database including a classification framework and unique token identifiers and locators.Originally coming from a Data Science background, he has working experience as a Data Scientist at Cognize and as a Market Conformity Analyst at UBS. Currently finishing his bachelor’s in Computational Business Analytics, you can contact him via nick.allgaeuer@itsa.global and connect on Linkedin if you would like to further discuss ITSA e.V. or have any other open questions.
Christian Viehof is an Executive Director at the International Token Standardization Association (ITSA) e.V., working to create the world’s largest token database including a classification framework and unique token identifiers and locators. He completed his Bachelor in Economics at the University of Bonn, the Hong Kong University and the London School of Economics and Political Science with a focus on Behavioral Economics and Finance. Currently pursuing his Master of Finance at the Frankfurt School of Finance and Management, you can contact him via christian.viehof@itsa.global and connect with him on Linkedin, if you would like to further discuss ITSA e.V. or have any open questions.
