veOCEAN is Launching, Data Farming is Resuming
Earn by locking OCEAN and by Curating Quality Data. 503.4M $OCEAN Available in Rewards
Update Mar 16, 2023: Data Farming Main (final DF phase) launched. The OCEAN emissions schedule is solidified. It has more up-to-date APY estimates. Details here.
1. Overview
veOCEAN launches Mon Sep 26. Data Farming (DF) will resume immediately after.
You can lock OCEAN, to get veOCEAN, for as little as two weeks or as long as 4 years. The longer you lock your OCEAN, the more veOCEAN you get. The more veOCEAN you hold, the more rewards you get. The amount of OCEAN you receive when the lock ends will always be equal to the amount you locked; plus there will be rewards in the meantime.
⚠️ veOCEAN cannot be unlocked before the pre-set time. If you’ve locked some OCEAN for a year, you can’t unlock it during that time, nor can you decrease the lock time.⚠️
As a veOCEAN holder, you get passive rewards by default. And, if you actively curate data by allocating veOCEAN towards data assets with high Data Consume Volume (DCV), then you can earn more. This is the DF aspect.
DF now has 503.4M OCEAN allocated. This is an increase from before, via an OceanDAO evolution towards automation.
Typical APYs will likely be 5–20%. APYs will vary week to week. The value depends on total OCEAN staked and other factors.
veOCEAN uses Curve’s veCRV contracts, which have been battle-tested over two years.
The rest of this post is organized as follows. Section 2 has key dates. Section 3 describes veOCEAN. Section 4 describes Data Farming. Section 5 describes the evolution of OceanDAO. Section 6 is a walk-through of OCEAN release schedule and possibly APYs. Section 7 discusses security. Section 8 concludes.
2. Key dates
DF will follow phases as before. When it resumes, it will be with a new “DF/VE Alpha” phase for 4 weeks. “DF Beta” and “DF Main” phases will follow, as previously targeted.
- Mon Sep 26: veOCEAN goes live. You can lock your OCEAN for veOCEAN at df.oceandao.org (linked from Ocean homepage)
- Thu Sep 29: Counting for DF resumes. As the previous DF round was DF4 (week 4), counting will start for DF5.
- Thu Oct 6: First ve rewards distribution to veOCEAN holders available. Rewards = DF5 payout + cut of Ocean fees. DF6 counting starts.
- Thu Oct 13: DF6 ends, DF7 starts (DF/VE Alpha week 3)
- Thu Oct 20: DF7 ends, DF8 starts (DF/VE Alpha week 4)
- Thu Oct 27: DF8 ends, DF9 starts (DF Beta week 1)
- Thu Nov 3: DF9 ends, DF10 starts (DF Beta week 2)
- And so on, for each week
We will iteratively improve DF over weeks and months as we evolve from Alpha to Beta to Main.
veOCEAN holders can claim their rewards distribution via the webapp, or smart contracts directly.
3. Details: veOCEAN
3.1 veOCEAN Overview
veOCEAN will operate as described in “Introducing veOCEAN”. This section gives the highlights.
ve tokens have been introduced by several projects such as Curve and Balancer. These tokens require users to lock project tokens in return for ve<project tokens>.
In exchange for locking tokens, users can earn rewards. The amount of reward depends on how long the tokens are locked for. Furthermore, veTokens can be used for voting via data asset curation.
We are rolling out veOCEAN to give token holders the ability to lock OCEAN to earn yield, and curate data.
People can lock their OCEAN up to 4 years to get veOCEAN. If someone locks 1,000 OCEAN, they get 1,000 OCEAN back at the end, plus rewards along the way.
veOCEAN supports passive locking of OCEAN by default. Users can get higher yield by active curation of data assets in the DF setting.
3.2 veOCEAN Core Idea
The core idea is: lock OCEAN for longer for higher rewards and more voting power. A locker can be passive, though they earn more if active.
You receive proportionally more veOCEAN for longer lock times, as follows:
- lock 1 OCEAN for 1 week → get 0.0048 veOCEAN = 1 / (4 * 52) [but you only get rewards if >1 week]
- lock 1 OCEAN for 2 weeks → get 0.0096 veOCEAN = 2/ (4 * 52)
- …
- lock 1 OCEAN for 1 year → get 0.25 veOCEAN
- lock 1 OCEAN for 2 years → get 0.50 veOCEAN
- lock 1 OCEAN for 3 year → get 0.75 veOCEAN
- lock 1 OCEAN for 4 years → get 1.0 veOCEAN
Critically, veOCEAN cannot be unlocked before the pre-set time. If you’ve locked some OCEAN for a year, you can’t unlock it during that time. The amount of OCEAN you’ll receive when the lock ends will always be equal to the amount you locked.
You can always extend your lock time or the lock amount. But, lock time can not decreased.
veOCEAN is non-transferable. You can’t send it to others.
veOCEAN held decays linearly over time. If you lock 1.0 OCEAN for four years, you get 1.0 veOCEAN at the start. After 1 year, you have 0.75 veOCEAN; after 2 years → 0.5 veOCEAN; after 3 years → 0.25 veOCEAN; after 4 years → 0.0 veOCEAN, and your OCEAN is unlocked [1].
3.3 veOCEAN Earnings
veOCEAN holders have earnings from two sources:
- Community fees. Every transaction in Ocean Market and Ocean backend generates transaction fees, some of which go to the community. 50% of the community fees will go to veOCEAN holders; the rest will go to OceanDAO grants, etc. All earnings here are passive.
- Data Farming: veOCEAN holders will get each weekly DF rewards allocation, except a small carveout for DF Crunch. For DF rewards, veOCEAN holders can be passive, though they will earn more if active. “Being active” means allocating veOCEAN to promising data assets (data NFTs). Then, rewards follow the usual DF formula: DCV * stake. But now, stake is the amount of veOCEAN allocated to the data asset, rather than liquidity in a datatoken pool. (And this stake is safe: you can’t lose your OCEAN as it is merely locked.)
All earnings for veOCEAN holders are claimable in Ethereum mainnet. (Data assets for DF may published in any network where Ocean’s deployed in production: Eth mainnet, Polygon, etc.)
There’s a new DF round every week; in line with this, there’s a new ve distribution “epoch” every week. This affects when you can first claim rewards. Specifically, if you lock OCEAN on day x, you’ll be able to claim rewards on the first ve epoch that begins after day x+7. Put another way, from the time you lock OCEAN, you must wait at least a week, and up to two weeks, to be able to claim rewards. (This behavior is inherited from veCRV. Here’s the code. )
3.6 Flow of Value
The image below illustrates the flow of value. On the left, at time 0, the user locks their OCEAN into the veOCEAN contract, and receives veOCEAN. In the middle, the veOCEAN holder receives OCEAN rewards every time there’s revenue to the Ocean Protocol Community (top), and also as part of DF rewards (bottom). On the right, when the lock expires (e.g. 4 years) then the user is able to move all their OCEAN around again.
4. Details: Data Farming
4.1 DF Overview
DF incentivizes for growth of data consume volume in the Ocean ecosystem. It rewards OCEAN to veOCEAN holders who curate towards data assets with high consume volume. DF’s aim is to achieve a minimum supply of data for network effects to kick in, and once the network flywheel is spinning, to increase growth rate.
DF will operate as described in “Ocean Data Farming is Launching”, with a key change: “staking” now means allocating veOCEAN to data assets, rather than LPing into data pools. And veOCEAN means OCEAN is locked for up to four years. Since it doesn’t involve pools (AMMs), there is no risk of impermanent loss. DF now supports fixed-price assets, and free assets (where “price” = gas cost to consume).
The rest of this section gives the highlights from the post.
4.2 DF Schedule
DF has these phases:
- [completed] DF Alpha. Counting started Thu June 16, 2022. 10K OCEAN rewards were budgeted per week. Rewards were distributed at the end of every week, for the activity of the previous week. It ran 4 weeks.
- [new] DF/VE Alpha. Counting starts Thu Sep 29,2022. 10K OCEAN rewards are budgeted per week. Rewards are distributed at the end of every week, for the activity of the previous week. It runs 4 weeks. The aim is to test technology, learn, and onboard data publishers.
- DF Beta. Counting starts Thu Oct 27, 2022. Rewards are up to 100K OCEAN per week. It runs up to 20 weeks. The aim is to test the effect of larger incentives, learn, and refine the technology.
- DF Main. Immediately follows DF Beta. Rewards are up to 1.6M OCEAN per week. It runs for decades; at least 503.4M OCEAN total is committed.
4.3 DF Reward Function
The reward going to a veOCEAN holder for a given Ocean data asset depends on the amount of veOCEAN they allocated to the asset, and how much that asset is being consumed ($ volume). Reward is:
RFij = Sij * Cj
where
- Sij is amount of veOCEAN that user i has allocated to asset j
- Cj is data consume volume for asset j, in $
- veOCEAN holders receive rewards pro-rata according to RFij
For priced data, consume volume = Cj = ($ price of asset) x (number of consumes of the asset in the week). DF now handles free data as well, where gas fees act as “price”: Cj = ($ gas paid at time of consume) x (number of consumes of the asset).
The higher the consume volume, the more the rewards. The more veOCEAN allocated, the more the rewards.
For a given week, OCEAN rewarded is bounded by the OCEAN budget, and keeping APY bounded.
This is the reward function for the next DF round (DF5). Based on learnings, we can expect it to evolve in rounds that follow DF6, DF7, etc.
4.3 Data Assets that Qualify
Data assets that have veOCEAN allocated towards them get DF rewards.
The data asset may be of any type — dataset (for static URIs) or algorithm for Compute-to-Data. The data asset may be fixed price or free price. If fixed price, any token of exchange is alright (OCEAN, H2O, USDC, ..).
To qualify for DF, a data asset must also :
- Have been created by Ocean smart contracts, deployed by OPF to production networks
- Visible on Ocean Market
- Can’t be in purgatory
4.4 Data Farming Q&A
Q: I staked for just one day. What rewards might I expect?
At least 50 snapshots are randomly taken throughout the week. If you’ve staked just one day, and all else being equal, you should expect 1/7 the rewards compared to the full 7 days.
Q: The datatoken price may change throughout the week. What price is taken in the DCV calculation?
The price is taken at the same time as each consume. E.g. if a data asset has three consumes, where price was 1 OCEAN when the first consume happened, and the price was 10 OCEAN when the other consumes happened, then the total DCV for the asset is 1 + 10 + 10 = 21.
Q: Can the rewards function change during a given week?
No. At the beginning of a new DF round (DF1, DF2, etc), rules are laid out, either implicitly if no change from previous round, or explicitly in a blog post if there are new rules. This is: rewards function, bounds, etc. Then teams stake, buy data, consume, etc. And LPs are given DF rewards based on staking, DCV, etc at the end of the week. Overall cycle time is one week.
Caveat: it’s no at least in theory! Sometimes there may be tweaks if there is community consensus, or a bug.
5. Evolution of OceanDAO
With veOCEAN, OceanDAO evolves to be more like CurveDAO:
- ve is at the heart with v = voting (in data asset curation) and e = escrowed (locked) OCEAN. The longer the lockup, the more voting and rewards, which reconciles near- and long-term DAO incentives.
- The DAO has increased bias to automation, and to minimizing the governance attack surface. The 143.8M OCEAN that was originally earmarked for a DAO treasury will go into DF instead. And, 143.8M OCEAN earmarked for grants will go to DF (>21.5M OCEAN remains for grants). This is on top of 215.7M OCEAN previously allocated . Therefore DF now has 503.4M OCEAN allocated; this is 35.7% of total OCEAN supply (1.41B OCEAN).
6. Walk-Through Numbers
Update Mar 16, 2023: Please see “Ocean Data Farming Main is Here” for a more up-to-date discussion of OCEAN emission schedule and expected APYs.
7. On Security
veOCEAN core contracts use veCRV contracts with zero changes, on purpose: the veCRV contracts have been battle-tested for two years and have not had security issues.
We have built a new contract for users to point their veOCEAN towards given data assets (“allocate veOCEAN”). These new contracts do not control the veOCEAN core contracts at all. In the event of a breach, the only funds at risk would be the rewards distributed for a single week; and we would be able to redirect future funds to a different contract.
We have an ongoing bug bounty via Immunefi for Ocean software, including veOCEAN and DF components. If you identify an issue, please report it there and get rewarded.
8. Conclusion
veOCEAN goes live on Mon Sep 26, and Data Farming resumes three days later. veOCEAN (with DF) has passive rewards for locking OCEAN for veOCEAN, and higher rewards for veOCEAN holders who actively allocate veOCEAN towards data with high Data Consume Volume (DCV).
Appendix: Contract Deployments
The veOCEAN & DF contracts are deployed to Ethereum mainnet, alongside other Ocean contract deployments. Full list.
{
“veOCEAN”: “0xE86Bf3B0D3a20444DE7c78932ACe6e5EfFE92379”,
“veAllocate”: “0x55567E038b0a50283084ae773FA433a5029822d3”,
“veDelegation”: “0xc768eDF2d21fe00ef5804A7Caa775E877e65A70E”,
“veFeeDistributor”: “0x256c54219816603BB8327F9019533B020a76e936”,
“veDelegationProxy”: “0x45E3BEc7D139Cd8Ed7FeB161F3B094688ddB0c20”,
“veFeeEstimate”: “0xe97a787420eD263583689Bd35B7Db1952A94710d”,
“SmartWalletChecker”: “0xd7ddf62257A41cc6cdAd7A3d36e4f1d925fD142a”,
“DFRewards”: “0xFe27534EA0c016634b2DaA97Ae3eF43fEe71EEB0”,
“DFStrategyV1”: “0x545138e8D76C304C916B1261B3f6c446fe4f63e3”,
}veFeeDistributor has a start_time of 1663804800 (Thu Sep 22 2022 00:00:00)
Notes
[1] veOCEAN held decays linearly over time. You can calculate the balance as follows: veOcean_balance = OCEAN_amount_locked * (your_unlock_timestamp — current_unix_timestamp ) / 60 * 60 * 24 * 7 * 52 (that is 4 years)
Updates
Oct 4, 2022: “OceanDAO Is Going Fully Decentralized and Autonomous” was published. OceanDAO grants are winding down. First, veOCEAN will not be used for grants voting. More significantly, grants’ portion of the 51% is now wholly reallocated to Data Farming; this increased the total OCEAN going to DF from 482M OCEAN to 503.4M OCEAN. We updated OCEAN vesting plots accordingly.
Oct 4, 2022: veOCEAN has been live for 9 days. At 7 days, about 10M OCEAN was locked. For the APY tables, we estimated lower and upper bound of 2M to 10M OCEAN respectively. Now that we have the exact figure, we can use it rather than estimate. The APY tables are updated accordingly.
Mar 16, 2023: DF Main has launched. Now that several months of DF history and OCEAN staking history, we can estimate APYs more accurately. The upper-bound of 125% is no longer accurate, given the amount of OCEAN staked. Therefore in this post we have removed the “125%” language, to calibrate expectations better for anyone reading this post.
