Ocean Token Model || 2023
A summary of the mechanics of OCEAN, circa Jun 2023
Summary
OCEAN mechanics currently include locking OCEAN for curation of data assets, burning OCEAN as a function of network revenue, and as a unit-of-exchange.
OCEAN has a generalized design that can incorporate new features, towards the overall goal of growing traction.
Introduction
OCEAN is designed to increase with a rise in usage volume [1]:
- A rise in usage volume → leads to more network revenue, which goes to Ocean community via (a) burning OCEAN (b) other community initiatives
- A rise in usage volume → leads to more OCEAN being locked
So the name of the game is to drive usage volume.
On Network Revenue
The baseline revenue: anytime a data asset is consumed, 0.1% of the value goes to Ocean community; a portion of that is burned. It’s independent of what currency the data asset it sold for. The higher the data consume volume (DCV), the more OCEAN to the community, the more value to OCEAN. So the name of the game is to drive DCV [1].
Over time, other revenue-generating mechanisms may be added.
OCEAN Distribution Towards Traction
The majority of OCEAN supply is earmarked for the community, distributed over decades, to incentivize locking OCEAN and driving DCV.
Ocean Data Farming (DF) [2][4] has the main mechanics:
- Passive DF. Lock your OCEAN for veOCEAN → earn weekly OCEAN rewards .
- Active DF: Volume DF. Point your veOCEAN to assets that you think will have high DCV, and if they do, you earn OCEAN rewards. DCV isn’t that high (yet), so “active” DF rewards aren’t that high (yet).
- Active DF: Challenge DF. Weekly competition to predict the price of ETH accurately.
Unit of Exchange
OCEAN can also be used as a unit-of-exchange, as it is in Ocean Market [1].
However, do understand that this mechanic doesn’t drive value much, as Chris Burniske’s PV=MQ work showed. Thus, the Ocean core team puts more emphasis on greater drivers of value.
Looking Forward
Inside Ocean core team, all our work is around driving traction, and especially DCV [5]. Stay tuned, some cool stuff is coming, including more revenue streams:)
And there are several teams in the Ocean community, building great products powered by Ocean, which each drive OCEAN as they drive DCV.
References
0. OCEAN token page. https://oceanprotocol.com/token
1. “Ocean Token Model”. Oct 2020. https://blog.oceanprotocol.com/ocean-token-model-3e4e7af210f9. It lays out the backbone of OCEAN which is as relevant as ever. It doesn’t reflect details added in since then: veOCEAN, shipping Data Farming, winding down datatoken pools, and budget shifting from grants to Data Farming.
2. “veOCEAN is Launching, Data Farming is Resuming”. Sep 2022. Introduction of veOCEAN, and active/passive Data Farming. https://blog.oceanprotocol.com/veocean-is-launching-data-farming-is-resuming-abed779211e3
3. “OceanDAO Is Going Fully Decentralized and Autonomous”. Oct 2022. Shifting the budget from grants towards DF. https://blog.oceanprotocol.com/oceandao-is-going-fully-decentralized-and-autonomous-cb4b725e0360
4. “Ocean Data Farming Main is Here”. Mar 2023. Up-to-date description of DF. https://blog.oceanprotocol.com/ocean-data-farming-main-is-here-49c99602419e
5. “Ocean Protocol Update || 2023”. Mar 2023. Description of the core team’s plans for 2023. https://blog.oceanprotocol.com/ocean-protocol-update-2023-44ed14510051
