Mission & Purpose: The Data Economy Index (DATA) is a digital asset index capturing the growth of on-chain data economies. The Data Economy Index tracks projects with significant economic activity providing data-based products or services.
Thesis: The Data Economy is disrupting the data monopolies built in Big Tech over the past two decades.
Draft Portfolio: The initial nine components of DATA are LINK (25%), RENFIL (25%), GRT (25%), BAT (11.6%), LPT (5.2%), OCEAN (2.5%), NMR (2.4%), OXT (2.1%), REPv2 (1.3%).
Product Differentiation: DATA is designed to capture data economies off and across blockchains. The initial nine tokens within DATA have no overlap with our two existing index products, DPI and MVI.
Combined AUM of Components: The initial nine components of DATA represent approximately $17.9 billion in market value and have no overlap with the Index Cooperative’s two existing index products. For comparison, the components within MVI represent ~$4.1 billion in market value and the components within DPI represent ~$26.9 billion in market value.
Market Opportunity: DATA will have ~$100m in AUM if it captures the same market share of the Data Economy that DPI has of DeFi (~0.55%), and will have ~$20m in AUM if it captures the same market share that MVI has of the Metaverse (~0.11%).
Consensys & Filecoin Team Liquidity Support: Per @corbpage, the Filecoin team strongly supports the Data Economy Index and plans to provide liquidity support for renFIL ahead of the launch to minimize price impact and slippage during the rebalancing process.
Fee Split: Data Economy Index (DATA) will have a streaming fee of 0.50% (50 basis points), a mint fee of 0.10% (10 basis points), and a redeem fee of 0.20% (20 basis points). At launch, DATA will participate in the Methodologist Bounty Program and the fee split will be 70% to Index Coop, 30% to Titans of Data. After launch, the fee split and methodologist bounty for DATA may be revised as part of the Index Cooperative’s larger effort to refresh its relationships with its methodologists.
Author Background & Commitment: Thomas Hepner and Kiba Gateaux are members of a DAO, tentatively named Titans of Data, responsible for the ongoing maintenance and development of the Data Economy Index. Titans of Data will also have dedicated members responsible for sales, marketing, and investor relations in Korea and China. Titans of Data has connections who will help DATA get listed on top Korean exchanges.
“I believe these marketplaces will transition us out of the current era of Web 2.0 data monopolies into a Web 3.0 era of open competition for data and algorithms, where both are directly monetized.” - Fred Ehrsam, blockchain-based machine learning marketplaces (March 2018)
Decentralized finance (DeFi) is the first of many industries that will blossom on-chain. The Ethereum whitepaper outlined numerous data-intensive applications that the network would support including decentralized file storage, decentralized data feeds, cloud computing, prediction markets, and other on-chain data-based applications.
The Data Economy Index (DATA) is a digital asset index capturing the growth of on-chain data economies. The Data Economy Index tracks projects with significant economic activity providing data-based services or products.
The Index Cooperative now has two index products, DeFi Pulse Index (DPI) and Metaverse Index (MVI) that provide exposure to two on-chain industries, decentralized finance (DeFi) and the Metaverse.
It is time the Index Cooperative had an index for on-chain data economies.
As of today’s writing, the components in DPI have a combined market value of ~$26.9 billion and the components in MVI have a combined ~$4.1 billion of market value.
The initial 9 components of DATA represent approximately $17.9 billion in market value and have no overlap with our two existing index products. This suggests that DATA would be a highly differentiated product for the Coop with a significant, compelling market opportunity.
Moreover, the data economy is already deeply integrated into the workings of DeFi. For instance, Chainlink is the 800-pound gorilla in the room; it’s decentralized price oracles are used as infrastructure by most DeFi protocols, including Set Protocol to calculate NAV issuance.
DATA has a realistic potential to capture between $17m and $89m AUM shortly after launch, while also creating a new revenue stream for the Index Cooperative that taps an exponentially expanding market.
DATA’s constituent tokens have a combined market value of $17.9 billion. DATA will have ~$20m in AUM if it captures the same share of the Data Economy that MVI has of the Metaverse (~0.11%) and ~$100m in AUM if it captures the same share that DPI has of DeFi (~0.55%).
“Technology companies are the most valuable companies in the world…You don’t need a middleman to own your data…I think the big tech companies will be disrupted as much, if not even more, than the big banks. And considering those are the most valuable companies in the world, maybe that’s what’s worth paying attention to.” - Fred Ehrsam, Bloomberg (March 2021)
A little over 2 years ago, on February 28th, 2019, DeFi Pulse only had 10 assets listed on their site. Total Valued Locked (TVL) was $317m and Maker’s dominance was ~90%! Bitcoin’s Lightning Network and Augur had the 4th and 5th most TVL respectively. Much has changed in just 2 years!
Data Economy is at the same stage of development that DeFi was at the beginning of 2019. Whereas DeFi is disrupting traditional banking and financial services, the Data Economy is disrupting the data monopolies built in Big Tech over the past 20 years.
Here’s what @corbpage, Head of Product at ConsenSys Codefi, has to say about the Data Economy Index proposal:
Expands Reach: DATA would represent another on-chain industry covered by Index Cooperative. This potentially expands the reach of the Index Cooperative’s brand as the premier on-chain asset manager to projects and communities currently outside of DeFi and NFTs.
Consensys & Filecoin Team Liquidity Support: Per @corbpage, the Filecoin team strongly supports the Data Economy Index and plans to provide liquidity support for renFIL ahead of the launch to minimize price impact and slippage during the rebalancing process
The LINK Army: DATA would be the first product offered by the Index Cooperative that includes Chainlink (LINK). Chainlink’s official Twitter account has 331k followers; other prominent Twitter accounts include @ChainLinkGod (83k followers) and the @Crypto___Oracle (27k followers).
APAC: APAC is a largely untapped market for the Index Cooperative. DATA will have dedicated team members responsible for sales and marketing in the APAC region. DATA can establish a presence for the Index Cooperative in this key region and lead the way for other indices to build upon DATA’s success.
As already mentioned in the sections above, the Data Economy represents an entirely different market from DeFi and the Metaverse. We believe that DATA will be significantly differentiated as it is designed to capture data economies across blockchains. In other words, it is meant to be blockchain agnostic over the long-term. We believe that most of the value of DATA is derived from off-chain data assets. For example, the value of Numeraire (NMR) is tied to the predictive performance of the machine learning models submitted by independent data scientists to Numerai’s hedge fund. Because the value of data economy tokens are derived from off-chain data, we believe that DATA’s value over the long-run will be uncorrelated with Bitcoin, Ether, and the DeFi Pulse Index (DPI).
DATA initializes a Token List with the following four projects and their native tokens:
- Chainlink: LINK (25%)
- Filecoin: renFIL (25%)
- The Graph: GRT (25%)
- Basic Attention Token: BAT (11.6%)
- Livepeer: LPT (5.2%)
- Ocean Protocol: OCEAN (2.5%)
- Numeraire: NMR (2.4%)
- Orchid Protocol: OXT (2.1%)
- Augur: REPv2 (1.3%)
Selection of the DATA tokens is based upon the following criteria:
The token must be available on the Ethereum blockchain. This will be revised if the Set Protocol infrastructure becomes multi-chain.
The protocol provides data-based services or products.
Protocol must have organic network activity or usage. On-chain transaction volume, Total Value Locked (TVL), and/or revenue paid to service providers are all examples of metrics that can be used to demonstrate organic network activity.
Circulating market capitalization must be over $100m.
Protocol token must have sufficient DEX liquidity to support inclusion. If a token has insufficient liquidity, it will be removed from the index during the determination phase.
Protocol must have at least 3 months history of operation and its token must have at least 3 months of price and liquidity history.
An independent security audit should have been performed on the protocol and results reviewed by the product methodologist. In the case that no audit has been performed, the methodologist applies subjective judgement of the protocol based on assessment of the criteria above and communications with the team.
In the event of a security issue the methodologist will work with the project team to understand the issue and any effects to DATA holdings. The team is expected to provide users of the protocol with a reliable solution and adequate documentation to ensure transparency about any incidents.
DATA will use circulating market capitalization to determine the weight of each token included in the index.
The weight of each token within the index will be as follows:
Like the DeFi Pulse Index, the Data Economy Index caps each token’s respective weight at 25%. Excess weight for a given token will be redistributed to the remaining components of the Data Economy Index on a weighted basis. This same process will be repeated for every token exceeding the 25% allocation cap.
The index is maintained quarterly in two phases:
Determination Phase: During the determination phase, the tokens being added and deleted from the index calculation are determined during the final week of the quarter and published before quarterly rebalancing.
Rebalancing Phase: Following publication of the determination phase outcome, the index composition will change to the new weights during the first week of the following quarter.
Data Economy Index (DATA) will have a streaming fee of 0.50% (50 basis points), a mint fee of 0.10% (10 basis points), and a redeem fee of 0.20% (20 basis points).
At launch, DATA will participate in the Methodologist Bounty Program and the fee split will be 70% to Index Coop, 30% to Titans of Data.
After launch, the fee split and methodologist bounty for DATA may be revised as part of the Index Cooperative’s larger effort to refresh its relationships with its methodologists. Titans of Data has the right to off-board DATA from the Index Coop’s product offerings no later than Ethereum mainnet block 13531000 (est. October 30, 2021) or Ethereum mainnet block 13923000 (est. December 31, 2021) should they not wish to continue with the fee split and methodologist bounty outlined or any new program produced by the Index Cooperative, should one be proposed after block 13333000 (est. Sept 30th, 2021).
Thomas Hepner and Kiba Gateaux are members of a DAO, tentatively named Titans of Data, responsible for the ongoing maintenance and development of the Data Economy Index.
- Won the Index Creative Challenge by publishing Why I Invested in the DeFi Pulse Index and Index Cooperative.
- Gold/Silver Owl (December 2020 - February 2021) ; Helped @jdcook form the Analytics Working Group.
- Creator of the ₿EST Portfolio.
- Numerai Data Scientist (2016) and Numeraire holder since 2017.
- Data Science Manager at PrecisionLender (2017 - 2021); successfully created and launched several data products now in use by some of the largest banks in the world.
- Financial Analyst, Amazon Prime & Kindle teams (2012 - 2015)
- Prev. Full Stack Developer @ Consensys
- Gold/Silver Owl for the first three months of coop and April
- Top degen score
- Link marine since 2017
- Originally proposed DATA Index in October 2020, original concept in June 2020
Titans of Data will have dedicated members responsible for sales, marketing, and investor relations in Korea and China. Titans of Data also has connections to top Korean exchanges to get DATA listed in the country.