Introduction

Introduction

Data is one of the biggest and fastest growing markets on the planet, frequently drawing claims as “the new oil.” Ocean Protocol has been making huge waves recently to grow the Web3 data economy, towards a level playing field around data. Ocean is a decentralized data exchange protocol, the first of its kind built with blockchain technology. Users can freely exchange and sell valuable datatokens, all on-chain. By registering each data set as its own unique datatoken, Ocean has monetized the flow of quality, actionable data to DeFi. OCEAN is the core token in the Ocean ecosystem 

Ocean Protocol is standing at the forefront of a massive total addressable market, almost entirely in a category of its own. How can Ocean leverage its current position and further grow the Web3 data economy which is quickly expanding? Let’s take a look at what’s coming next, focusing on H2O.

Primer on H2O

H2O is a non-pegged and decentralized stable asset backed by OCEAN. Its monetary policy is mostly managed by an on-chain, autonomous controller, which minimizes governance and increases security. It’s a friendly fork of RAI, Reflexer’s stable asset backed by ETH. 

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**While H2O governance is minimized, it is not completely gone. The Poseidon (PSDN) token is used for the remaining “ungovernance” of H2O contracts. 

From the get-go, OCEAN holders can deposit OCEAN to receive H2O via the H2O contract. Bootstrapping of OCEAN liquidity for H2O has already begun.

Furthermore, H2O holders can stake the governance token:PSDN. This will allow users to earn H2O protocol fees and govern over important decisions to further develop the H2O protocol.

Finally, users can add liquidity to H2O or PSDN on pairs in Uniswap to receive LP fees, as well as PSDN as rewards.

 H2O will serve as a “good default” medium of exchange and unit of account within Ocean Market and other Ocean-powered data marketplaces -- core products that Ocean Protocol offers to users. This will benefit data consumers and datapool stakers, because it reduces the volatility of data prices compared to using OCEAN directly, leading to more predictable data pricing (for consumers) and reduced risk of impermanent loss (for stakers). 

Looking ahead 

Going forward, the Ocean Protocol core team will release its much-anticipated V4 marketplace in Q2 2022. Smart contract audits are complete, V4 is in beta with live bug bounties underway. Then, Ocean contracts will be deployed in production to Ethereum mainnet and other EVM chains (Binance Smart Chain (BSC), Polygon, Energy Web Chain, Moonriver initially; more later). Then, Ocean Market will get H2O support added.

H2O contracts are deployed to Ethereum mainnet. The H2O team will bridge H2O to additional EVM networks such as Polygon and Binance Smart Chain in Q2 2022. Cross-chain compatibility will not only expand usage of H2O and increase marketplace volumes, but will help establish Ocean as the de facto standard for data marketplaces in crypto. In Q3 of 2022, the team  aims to bridge H2O to additional EVM networks like EWC and Moonbeam. 

H2O V2. The initial version of H2O is solely backed by OCEAN. In Q3 2022, H2O will transition to also be backed by data assets themselves. With data as perhaps “the” ultimate huge asset class, it positions H2O extremely well for long-term stability, and increases its appeal beyond core data-oriented users to the broad stablecoin ecosystem. Furthermore, H2O being data-backed leads to an even tighter symbiosis and incentive alignment between the Ocean data exchange protocol and the H2O token protocol. 

In Q4, the H2O team plans to add H2O pairs to Curve - the protocol with the highest-liquidity stablecoin and stable asset pools. The H2O team will add liquidity incentives via Curve and Convex through a partnership with [REDACTED] Cartel. 

The Ocean Protocol core team will implement veOCEAN, employing “vote escrow” tokenomics first popularized by Curve Finance and its coveted veCRV. Vote escrow tokens help align incentives between token holders and a protocol over the long-term, offering increased incentives for those most confident in the long-term success of a protocol. 

The future of on-chain data

As web3 matures and the crypto market continues to expand at a rapid pace, many individuals will need access to high quality data to benefit them as they navigate the space. Ocean’s unique product suite will not only serve as a hub for data access, but the protocol will benefit from the massive head start it has with its upgraded marketplace and unique data-backed stable asset. 

Crypto has seen a vast increase in attention towards algorithmic stablecoins and backed assets. Do Kwon has made waves in his recent decision to purchase BTC to increase the collateralization of Terra’s native stablecoin, UST. As more users catch on to the power of cross-ecosystem collaboration and increased security of backed assets, H2O will continue to gain traction and see increased usage, directly benefiting Ocean and its users. 

For now, you can get involved with the protocol and familiarize yourself with the large amount of data available to you.

 To stay updated on everything happening within the ecosystem, follow @oceanprotocol and @H2O_data on Twitter to keep up with the coming updates.

 If you wish to get involved further, hop over to our Discords and chat about anything data related and the upcoming H2O token.