Data Is the Most Valuable Utility for NFTs That Nobody Is Talking About
“NFTs can be a wrapper for any data, regardless of whether the data points at your [Cryptopunk] profile picture or your usage record on Facebook” – Ryan Selkis, Messari (@twobitidiot)Data is a resource that can be used to generate profit, save costs and solve global challenges. But our current data economy is broken. Less than 0.5% of the world’s data is analyzed, as most of it is not accessible. Data is also constantly exploited and monetized by large corporations, which we only realize the moment we receive spam mail or unwanted advertisements.
The World Economic Forum predicts that data is the centerpiece of the world’s digital transformation worth 100 trillion US$ and recognized that blockchain technology provides an innovative solution to kickstart an open data economy. Therefore, the World Economic Forum awarded Ocean Protocol as a technology pioneer for providing disruptive technology that can shape the way we exchange, monetize and transact data.
The foundation of this new data economy is a decentralized Data NFT Marketplace developed by Ocean Protocol, where anyone with an internet connection can soon easily create NFTs for their datasets. The current NFT landscape around Bored Apes and Cryptopunks is driven by speculation pricing images in the millions, but some Data NFTs could surpass these valuations by far.
To understand why Data NFTs could become so valuable, it’s important to know that NFTs can license and regulate access to any type of data. The data can be an image of a monkey that is used as a profile picture, your data record on Facebook or a dataset of traffic images that makes self-driving cars safer.
DataFi – a DeFi spinoff with a multi trillion dollar potential
Ocean Protocol’s technology takes the utility of NFTs a step further. With the help of the Ocean Data Marketplace V4 launching in Q1/2022, Data NFT owners can create “Datatokens” [ERC20] that are bought by data scientists, companies or individuals to access the underlying dataset of the NFT. Therefore, Data NFTs can actively generate revenues for their owner by generating data sales.
Here’s a simple example:
An author creates an NFT [ERC721] for his work. A publishing house “buys the rights” to the book by means of the Data NFT. By using Ocean Protocol’s technology, the NFT owner [the publishing house] can now create sub-licenses for others to access the book. On Ocean Protocol’s Marketplace, the license to access the book is represented by Datatokens [ERC20]. Therefore, Data NFTs can actively generate revenue for their owners by selling data access through Datatokens.
The price of the data is determined by data investors that trade and stake Datatokens on the Ocean Marketplace for profit. In a nutshell, all these activities related to the new data economy are defined as Data Finance (DataFi), a DeFi spinoff where liquidity pools and tokens are backed by real-world datasets.
DataFi reveals the financial incentive and potential for data owners to publish their data. For the first time in history, data is valued on an open market by investors and buyers, which helps data owners to understand the fair price of their dataset.
To provide an incentive for stakers and yield farmers, Ocean Protocol will soon launch their Ocean Data Marketplace “Data Farming” program. This high-utility, high-yield incentive program will surely turn some heads in the crypto-scene, so stay tuned for future announcements.
Learn more with Data Whale!
If you want to get involved in the Web3 data economy inspired by Ocean Protocol, visit our website and complete our Ocean Data Market Tutorials. Stay tuned for the release of our mobile DataFi application ALGA, allowing users to research Datatokens and engage in DataFi.
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