Data Farming DF2 Completed, DF3 Started, Maxing APY
Stakers can claim DF2 rewards. DF3 counting has begun. DF3 runs June 30-July 7 2022
[Originally published by @trentmc0 on Jun 30, 2022. We’ve re-published to @TeamOcean to better organize archival posts. Please treat the article as if it was published on its original date.]
1. Overview
The Ocean Data Farming program incentivizes for growth of data consume volume in the Ocean ecosystem. It rewards OCEAN to pool liquidity providers (LPs / stakers) for higher data consume volume (DCV) and stake.
DF Round 2 (DF2) is part of DF Alpha phase. DF2 counting started 12:01am Thu Jun 23, 2022, and ended 11:59pm Wed Jun 29, 2022 (one week later). 10K OCEAN worth of rewards were computed and sent to the claims contracts. LPs can now claim rewards at the DF webapp.
DF Round 3 (DF3) is also part of DF Alpha phase. DF3 counting started 12:01am Thu Jun 30, 2022, and will end on 11:59pm Wed Jul 6, 2022. 10K OCEAN worth of rewards is available.
The rest of this post describes how to claim rewards, then details on DF2 and DF3. And, it has a special section on really playing the DF game, including exploring “wash consuming”.
2. How To Claim Rewards
As an LP (staker), here’s how to claim rewards:
- Go to DF webapp Claim Portal
- Connect your wallet
- For each network with rewards (where you staked): select network, click “Claim”, sign the tx, get rewards:)
Rewards will accumulate over weeks, so you can claim rewards at your leisure. If you claim weekly, you can re-stake your rewards for compound gains.
3. DF2 Input Parameters
DF2 is the second week of DF overall, and second week of DF Alpha. DF Alpha runs 4 weeks, with 10K OCEAN rewards budgeted per week. DF Alpha’s aim is to test technology, learn, and onboard data publishers.
DF2 parameters were the same as DF1. The DF launch post “Ocean Data Farming is Launching” included these parameters. Then, “Ocean Data Farming Examples: DF1” provided examples to better understand earnings, against the DF1 rewards formula and related settings.
4. DF3 Input Parameters
The rewards formula and related settings for DF3 are the same as for DF1 and DF2.
This may not always be the case: we can expect round-to-round evolution of the Reward Function and related settings, based on learnings.
5. DF2 Output Stats
OceanONDA V4 currently supports five production networks: Ethereum Mainnet (chainid 1), Polygon (137), Binance Smart Chain (BSC: 56), Energy Web Chain (EWC: 246), and Moonriver (1285).
Only Polygon and EWC had nonzero DCV in DF1, so we focus on those.
Exchange rate was 0.1968 OCEAN/USD, taken from Binance API.
- Total Stake (averaged across 7 days). Polygon 1,224,440 OCEAN, EWC 5423 OCEAN, total 1,229,863 OCEAN ($242,037 USD). Stake grew through the week, from just over 1M OCEAN to about 3M OCEAN.
- Total DCV (total across 7 days). Polygon 961.98 OCEAN, EWC 4.59 OCEAN, total 966.57 OCEAN ($190.22 USD).
- OCEAN rewarded to LPs. Polygon 9999.192 OCEAN, EWC 0.8080 OCEAN, total 10000 OCEAN
Rewards Stats. Rewards were dispensed to 138 LPs. The largest reward was 4393.86 OCEAN, the smallest 3.3e-20 OCEAN, average 72.46 OCEAN, median 1.119 OCEAN.
For more info yet, see the DF2 csvs published as a free asset in Ocean Market.
6. How to improve your APY? Playing the game.
Among other things, Data Farming is a game. Understand it better to earn more. Let’s start with the following curious datapoint: a single LP earned 44% of this round’s DF rewards (4393.86/10000). What game were they playing? Then to flip it around: can you play it? Consider this an opportunity for you.
To understand DF better, you need to understand what governs your payout. This is the rewards formula. Roughly speaking, reward = DCV * stake. Therefore, increasing DCV increases your rewards, and increasing your stake increases rewards.
Then ask yourself: how do you increase DCV, or stake? For stake, it’s obvious: just stake more. What about DCV? Well, there’s real consume and fake consume (“wash consuming”). Real consume is when people buy datasets and use them for real. This is a core value proposition for Ocean Protocol: Ocean makes it easy to monetize data, without compromising privacy or control. And of course since Ocean is still relatively young, then there is tremendous upside potential for real DCV. Create real datasets and algorithms that people want to consume, and the rest will follow.
Some LPs have discovered that wash consuming is profitable right now. A few hundred OCEAN spent on “fake” consumes will increase DCV, and can lead to thousands in OCEAN reward.
When real DCV is still low-ish, then this strategy pays. Therefore in the near term, expect more wash consuming!
Over time, we can expect liquidity to migrate to pools with maximum real DCV. This is because every $ on real volume is a $ that the LP doesn’t have to spend to create fake volume. So, as real DCV rises and wash consuming grows, profitability of wash consume will shrink. Eventually, real DCV will get big enough that it won’t be profitable to wash consume.
The 3% fee rate on every consume establishes this limit:
If Consume Fee > weekly Rewards Cap, then problem solves itself
— Manan Patel
Well put. The weekly rewards cap is currently 10,000 OCEAN. At a 3% rate, DCV needs to be > 10000 / 3% = 333,333 OCEAN. Put another way, if there was a DCV of 333,333 OCEAN, it would mean that total fees gathered for consume are 333,333 OCEAN * 3% = 10,000 OCEAN. Wash-consumers have paid 10,000 OCEAN in fees, and get just 10,000 OCEAN reward. Any higher DCV and it’s unprofitable to wash-consume. However, real data consumers are happy to keep buying and using the data, because they get business benefit from it. In short: once weekly real DCV exceeds 333,333 OCEAN wash consuming won’t be profitable.
The DF core team considered several mechanisms to stop wash consuming. But each of these adds complexity. However, as discussed, evolution will shrink wash consume over time anyway! In the meantime, we see it as as an extra incentive for the Ocean community to learn about Ocean Market and Ocean DF more. Therefore, the core team has held back from intervening. Let’s let evolution happen:)
7. Conclusion
DF2 has completed. To claim DF2 rewards, go to DF webapp Claim Portal.
DF3 counting has begun. Game on.
Further Reading
The post Ocean Data Farming Series collects together key articles, and related resources about DF.
