TLDR
Both data providers and data buyers are necessary for Ocean protocol to be successful. At this early stage we are attempting to identify the early adopters/innovators on both sides of this transaction.
We need to identify data providers willing to experiment with this emerging platform and provide valuable data for equally innovative data buyers. Once this initial market is established it will provide the foundation for a more mature data market to emerge.
Ocean needs to not just attract data but data which is both valuable and compliant. Valuable data at this stage means data which is appealing to the innovative buyers who are experimenting with this platform on the buyer side of the marketplace.
The long-term success of Ocean Protocol’s tokenomic model relies upon data buyers purchasing data sets from the Ocean ecosystem. Data purchases are the fuel which keeps everything else alive within this ecosystem.
Driving data buyer activity on Ocean markets is a critical focus so the needs of this audience must be kept in mind when answering the question, what makes an attractive data provider?
The answer – an innovative group at the intersection of the web3 and data ecosystems willing to experiment and provide high quality data that’s valuable to the innovative data buyers also experimenting within Web3/Ocean Protocol.
The Current State of Data Markets in Web3
To frame where the market is today, let’s use the product adoption life-cycle.
The initial data providers and data buyers need to both belong to the innovators group for a marketplace to take hold.
If there’s no data then data buyers have no reason to engage, and if there’s no buyers we must search for other motivations that will appeal to data providers outside a simple ‘come and sell your data on our marketplace’ proposition as there’s no established buyer side of the market just yet.
Identifying Initial Web3 Data Providers
It’s highly likely that data providers who enter the Ocean ecosystem to begin with will be experimenting.
Over time we would hope to see these experimenters transform into businesses and established organisations that begin building on top of Ocean Protocol.
So initially we’re looking for experimental innovators that are willing to get involved with Web3 data marketplaces right from the beginning.
Their interests are likely going to be at the intersection between the Web3 and (more established) data ecosystems.
Identifying this audience, where they hang out and what their motivations are will be a key piece of the puzzle. Once we know this, we can then begin to establish the base layer of data on Ocean markets. When this base layer of quality data is established, we can then attract the equally innovative and experimental data buyers on the other side of the marketplace.
When we have identified this initial group of data providers, we should focus on bringing in as many of them as possible and start to understand how we can help them progress from the experimentation phase, so they can start to build robust products on top of Ocean Protocol.
What about the Data?
For Ocean protocol to achieve long term success it needs data.
But any old data won’t cut it.
The data needs to be both compliant and valuable.
If the data is not compliant, the integrity and reputation of the protocol will be at risk. If the data is not valuable, data buyers will not use it to purchase data and the tokenomics of Ocean will fail.
Data that’s in Demand
Where does demand for Data come from within Ocean Protocol?
There’s two key drivers of demand for Data in Ocean protocol;
- Demand from speculators/stakers
- Demand from data buyers
Demand from Speculators/Stakers – This demand may encourage a flurry of speculative activity however the long-term sustainability needs to come from a more substantial driver of value. Speculation alone won’t deliver value over the long term.
Demand from Data Buyers – Once the speculators have come and gone, the fundamental drivers of value must still be intact. This is what will ensure long-term sustainability for Ocean Protocol. For the purposes of building long-term sustainability the focus must be on delivering value for data buyers.
What do data buyers find Valuable?
Earlier work identified a number of hypotheses about what Ocean data buyers might find valuable in an emerging Web3 data marketplace.
Based on these findings, we would be looking for data providers who can create or supply data which fits into these key characteristics:
- Web3
- High quality
- Achieves BI & Sales goals
- Use case driven
- Data readiness – as close to plug‘n play as possible
Up next…
Taking this information about what makes a data provider attractive for Ocean Markets, I’m going to look at identifying a target audience which fits these criteria as close as possible.
From here I can begin to look at their value drivers to create a value proposition which might appeal to this target group. Already some of the key characteristics of the target market and some of their value drivers are beginning to emerge.