The bull market has seen decentralized financing (DeFi), a utility that proved to be incredibly valuable for cryptocurrency, take place since 2019. Investors in cryptocurrency have earned annual interest rates that are double and triple the rate through Yield Farming, Staking and Loaning. It’s not common in traditional finance.
High returns can also mean high risk for investors. Many smart contracts were exploited and user funds were stolen. DeFi protocol malicious activity that suddenly withdrew significant amounts of crypto resulted also in considerable skepticism. DeFi also moved to the backstage as speculation about NFTs was made a profitable investment option, which allowed investors to multiply their returns by flipping JPEGs.
But whilst the focus of crypto enthusiasts has shifted towards NFTs, DeFi has developed into a broader ‘Web3’ movement. To provide safer environments for all stakeholders, providers like Bancor have been continuously improving their protocols. Others, like Ocean Protocol, improved and implemented DeFi infrastructure to disrupt multi-trillion-dollar industries. The bottom line is that the DeFi foundation has been laid and it may be poised to take the cryptocurrency market to new heights. It might be worthwhile to look for new trends, with the NFT market valued at close to 50 billion dollars.
Unexplored DeFi utility: data
Data is the world’s most valuable resource. Artificial intelligence and other technologies are crucial to our future. They can only work effectively if there is a lot of data. But right now, less than 0.5% of the world’s data is accessible. Similar to traditional resources, large corporations exploit data, creating unfair and monopolistic market power. Ever wondered why Google’s analytics are the best in the world? They’ve got the most data. There is still a huge opportunity in the data economy.
This opportunity is being explored by one DeFi project. It’s called Ocean Protocol, which was recently awarded the Technology Pioneer by the World Economic Forum. Ocean also has an agreement with the European government and German Central Bank, which stated that their technology ‘does not have any comparable competitors’ in the space.
Ocean plans to create a distributed, multi-chain data market built on the DeFi infrastructure. Their native currency, OCEAN will be the basis of an open-data economy.
Data owner can totokenize their datasets into NFTs when Ocean Data Market V4 is launched in Q1/2022. This will give them the exclusive rights to the data. It’s similar to owning a Bored Ape, but instead of a JPEG file, Data NFT owners own the right to a dataset. Data NFT owners have the option to create an unlimited supply of Datatokens. These tokens are built using ERC20 standards. Any DeFi activity can be made possible by Datatokens. All assets are supported with real-world data. It’s a major breakthrough
On Ocean Protocol’s Data Market, data investors can stake on Datatoken liquidity pools or can simply bet on the value of a dataset increasing by swapping OCEAN for Datatokens. Data buyers may purchase Datatokens in order to gain access to the data. Data NFT owners have the opportunity to earn revenue from selling Datatokens. All functions are regulated by blockchain technology on Ethereum, Polygon, Binance Smart Chain or Polkadot’s Moonriver
DataFi Infrastructure
Ocean Protocol is growing in popularity. People who understand the significance of Data Finance will not leave. Ocean Protocol’s DAO funds third-party teams to build valuable infrastructure that accelerates adoption of data as a valuable DeFi utility. DataX for example is building Datapolis, a data finance protocol offering a ‘Data DEX’ that is building towards data-backed lending and much more. Another project is Data Whale’s ALGA mobile Datatoken wallet for iOS and Android, where users can track their data assets and stake or swap on the Ocean Data Market through their phone.
If you are interested to learn more about DataFi, head over to Data Whale’s website and complete the Ocean Data Market tutorials. Watch our Web3 Data Economy YouTube Channel to learn more and see our explanation videos.
Luke Chesser photo on Unsplash