Ocean Protocol’s veTokenomics Kickstart a Decentralized Data Economy and Data Finance 

By akohad Oct12,2022


The exchange and monetization of data is a valuable yet unknown opportunity in Web 3.0, as blockchain technology can solve challenges related to the secure access of datasets.

Ocean Protocol’s ecosystem welcomes participants that are looking to distribute, purchase or invest in data, creating a balanced economy where anyone can participate to monetize this valuable resource. Paired with existing tools known to cryptocurrency enthusiasts, including NFTs, ERC-20 Tokens, and yield farming, the protocol offers an incentive structure that can kickstart an encompassing, decentralized data economy.

The project has already launched its decentralized, open-source marketplace for datasets in 2020.

Their marketplace is compatible with Ethereum and other blockchains, such as Polygon, Moonbeam, EWT, and Binance Smart Chain. Their technology has since been adopted by Mercedes-Benz and other enterprises. The company was awarded by the World Economic Forum as a Technology Pioneer in 2021.

Data Finance & veTokenomics

In the domain of Web 3.0, decentralized finance (DeFi) still presents a significant opportunity for users. Although rug-pulls, impermanent loss, and unsustainable staking models resulted in major losses for many recently, the ecosystem is adapting quickly. Consequently, Ocean Protocol took a decision to re-design its entire marketplace structure, entirely focused on protecting user funds.

To achieve their objectives, the project implemented the veTokenomics developed by Curve to replace the previous structure of staking OCEAN Tokens on dataset liquidity pools. veTokens have three major functions: voting, staking, and earning yield. ‘ve’ stands for voting-escrowed and has been a successful concept that is adopted by many projects. Paired with Ocean’s data infrastructure, veOCEAN will serve as the main catalyst for its data economy moving forward.

veTokens help to control governance mechanisms in decentralized organizations. If liquid tokens are used for governance and voting, the ecosystem is open to several attack vectors. If only veTokens are used for governance, interests are aligned since the liquid tokens are locked for a certain period of time.

Ocean Protocol launched veOCEAN on 26th September. veOCEAN is a non-transferable and non-tradable token that is received when OCEAN tokens are locked for a certain period. This has several benefits for the Ocean Protocol ecosystem.

  • Lock-in of OCEAN Tokens may greatly reduce supply and could reduce selling pressure.
  • veOCEAN is used for OceanDAO voting and better aligns the interests of the community. Participants that lock their token for the longest time have the most voting power.
  • veOCEAN is used to stake and earn up to 125% from Ocean Protocol’s data farming rewards. This ensures no impermanent loss or rug-pull risk to the participant’s locked OCEAN. There are almost 500 Million OCEAN Tokens in rewards reserved for the community.

The lock-up schedule to receive veOCEAN is below. The longer participants lock up their OCEAN, the more veOCEAN they receive.

    1. Lock up OCEAN for 1 year and receive 0.25 veOCEAN per OCEAN Token.
    2. Lock up OCEAN for 2 years and receive 0.5 veOCEAN per OCEAN Token.
    3. Lock up OCEAN for 3 years and receive 0.75 veOCEAN per OCEAN Token.
    4. Lock up OCEAN for 4 years and receive 1 veOCEAN per OCEAN Token.

veOCEAN is a feature that allows Ocean Marketplace participants to safely experiment with up to 125% in data farming rewards without putting their initial OCEAN holdings at risk. Whatever amount of OCEAN is locked will be released after the specified time. It’s important to note that liquid OCEAN Tokens cannot be unlocked before the specified release date.

To participate in data farming, users need to go through the following process:

  1. Get OCEAN Tokens from any of your favorite exchanges, including Binance, Kucoin, or Coinbase, as well as any decentralized exchange.
  2. Make sure to store the OCEAN Tokens on the Ethereum blockchain in your non-custodial wallet.
  3. Head on over to veOCEAN Dashboard and connect the wallet. Make sure to be on the correct domain and triple-check the transactions before confirming them.
  4. Choose the lockup period.
  5. If you want to participate in Ocean Protocol’s data farming program for APY, then head on over to Data Farming Dashboard.
  6. Either allocate your entire veOCEAN to the Ocean Protocol Marketplace in a ‘stake and forget’ manner to earn interest across all assets or maximize your return by actively managing your stake and allocating it to your datasets of choice. For this, you need to monitor which datasets have the most sales volume on a weekly basis and allocate your veOCEAN accordingly. If you allocate veOCEAN to the datasets with the most sales, you will receive the highest potential APY!

There are multiple resources users can refer to in order to further strengthen their knowledge, including Ocean Protocol’s official Discord channel.


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By akohad

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