Mattereum adds dispute resolution to Ocean Protocol’s distributed data marketplace
Last year Mattereum announced a partnership with Ocean Protocol to collaborate on a legal framework for rights over digital assets. Recently, we joined forces for a workshop in Berlin; this post lifts the curtain on Mattereum’s approach to integrating dispute resolution and legal enforceability into our clients’ systems.
Today, the overwhelming majority of the vast amounts of data generated in the global economy is under-exploited, locked up in proprietary silos. Whether it’s governments worried about undermining their citizens’ privacy, or corporations fearful of losing their competitive advantage, few organisations have the expertise and resources to manage the tricky balancing act of sharing data while preserving its subjects’ privacy and defending its owners’ IP.
Ocean Protocol, founded in Q4 2017 by the experienced teams behind BigChainDB and DEX, aims to change all that by building a global marketplace to share data and associated services, while the data remains at all times under the control of its owner. A key motivation is to accelerate AI research by sharing datasets, for example, allowing self-driving car manufacturers and researchers to share autonomous vehicle data.
In any such system, disputes will inevitably arise. For example, a data provider may offer valuable self-driving telemetry data from a wide variety of road surfaces and driving conditions, but having paid to access it the customers finds it appears to be all from sunbelt freeway commuter driving — not what they paid for. Therefore, Ocean have asked Mattereum to help them add dispute resolution to their ecosystem. Like security, dispute resolution is not a “bolt-on”; it must be designed into the core of a system. So in June we visited Ocean in Berlin for a two-day workshop at which we co-designed the changes to Ocean’s ecosystem necessary to accommodate dispute resolution.
The Ocean Protocol
To start with, we needed a thorough understanding of Ocean Protocol, so we took a deep dive (pardon the pun!) with the team.
Ocean’s principal goal is to build a decentralized marketplace to maximize the supply of relevant AI data & services. The marketplace supports the following types of actor:
- Service provider: providers come in different flavours, essentially offering all the actual functionality of the system: data assets, storage infrastructure, and services such as analysis and orchestration
- Consumer: the customer
- Keeper: the equivalent of Bitcoin nodes (but supporting other types of consensus mechanism than proof-of-work), processing transactions, and recording evidence about the performance of obligations.
- Verifier: Ocean is built on Curated Proofs Markets. Verifiers check that data has been delivered, or that promised work has been done, for example when a service provider runs a customer’s algorithm on its proprietary data, without giving the customer direct access to the data.
- Curator: Curators are agents that act as a signalling mechanism, investing in datasets they consider will be profitable.
To function as intended, the market’s design must incentivize:
- The supply of data (whether free or priced), referrals to good data sources, and the prevention of spam (low-quality data).
- The supply of storage and compute services, including privacy-preserving compute, and referrals.
- The use of the network, by offering higher marginal value to network users than to external investors.
- The provision of keepers, to provide transactional validation for provenance, attribution, etc.
In addition, the system should be simple to use; in particular, onboarding should be low-friction.
Integrating dispute resolution
To support dispute resolution, we first added another actor to the list:
- Adjudicator: resolves disputes, in principle between any of the parties listed above, and of course with other adjudicators.
Next, to make it possible for dispute resolution to operate, and in particular for arbitration, where decisions can be enforced within the system, we require four elements:
- Evidence: used to decide disputes. Some evidence is already gathered by the system for verification.
- Escalation options: a smooth path from consensual dispute resolution (e.g. mediation) to adjudicative (e.g. arbitration) will help make the system more efficient and cheaper.
- Decision-making: when disputes arise it must be possible to settle them.
- Enforcement: awards (e.g. the redistribution of staked tokens) must be enforced. In Ocean Protocol enforcement should follow naturally from decision-making, perhaps after a standard delay.
Other goals of the design included incentivising the adoption of arbitration, and ensuring a default position that protects Ocean itself against potential claims, for example service delivery failure or IP infringement.
The technical and economic pathways needed for dispute resolution, and in particular arbitration, were mostly already in place; we discussed some adjustments that might be required, such as ensuring that sufficient funds were available to make meaningful arbitration awards. This led naturally on to the question of governance.
Governance and dispute resolution
Ocean is just the platform provider, and does not offer data or services itself; it is essential that it be seen as a neutral guardian rather than an active participant. The Ocean Foundation already has a charter, along with an overarching mission and set of values/principles that help govern it, so it is natural to give the Ocean Protocol a constitution to uphold the same core aims and principles (see above); to add a layer of governance over the rules and code that run it day-to-day, which allows stakeholders to change it while remaining consistent with the constitution. The Platform is thus not under the sole control of the Foundation. Specialised versions of the constitution could be used in particular sub-markets: Ocean encourages verticals to create their own specialised enclaves in the ecosystem. We discussed the potential legal framework for a constitution and considered some of the substantive aims that might be constitutionally entrenched.
Over the course of the workshop we expanded the Protocol design to include arbitration, found a way to incentivise IP holders to opt in to arbitration, and came up with a couple of neat tweaks to Ocean’s crypto economy.
Moving towards launch
Ocean aim to launch their testnet v1 in August, v2 in November, and mainnet v1.0 in Q1 2019. In that time frame Mattereum aims to help Ocean make the Protocol “arbitration-ready”, and hence fit for the enterprise-grade markets it aims to support.
Learn more:
Ocean Protocol — https://oceanprotocol.com/
Mattereum — https://www.mattereum.com/
To become Mattereum’s client message us at info@mattereum.com.
