The Marketplace of Auth3 Network (2)
Last article, we talked about the necessity of data marketplace and how to build a healthy one. In this article, we make an in-depth study about the details of how subjects involved interact with one another in the marketplace.
How the correlations are like with the three subjects
Auth3 Marketplace mainly involves three subjects: data provider, data operator, data consumer. Among these three subjects, specifically, there are two relationships: provider-operator, operator-consumer. Because of the differences between these entities and their related activities, markets in the two relationships are different.
Provider-Operator
In fact, the number of data providers is large while that of operators is relatively small. And operators need to collect a large number of datasets from providers.
1) Data Pricing
Considering the data uploaded by providers mostly lack scarcity and irreplaceability, it is hard to sell for high prices. In most cases, data providers want to choose “small profits and quick returns”, sell their datasets to as many data operators as possible, to maximize their benefits.
Based on the small profits and quick returns, also can be understood as on-demand sales, next people need to consider data’s pricing strategy. How to maintain a healthy pricing system in Auth3 is important. Let’s consider several situations.
a) If providers have great freedom (i.e., they can set a fixed price, adjust the price freely, etc.), then the operator doesn’t have time to determine whether the provider’s pricing of its data is appropriate, and sometimes they prefer to choose the real-time market purchases directly. If providers deliberately set a high price, it will harm operators’ interests.
b) In turn, operators can choose to bid. In fact, the number of operators is small, it’s not too burdensome for providers to see operators’ bids one by one. But it still may threaten the order of the market. Because most of the providers want to give data to every data project to maximize their profits, then, operators are likely to set prices at will. For a long time, this irresponsible bidding for data by operators, will damage the enthusiasm of providers and endanger the entire data ecology. If providers want to save more time, agreeing to operators’ bid price, then the deliberately bid price-cutting by operators will harm providers’ interests.
Therefore, even if the direct market price transaction is more suitable for the provider-operator relationship, the price-setting should be based on a neutral, credible, and capable third party. So we choose the evaluation calculated by auth3 as the reference price.
1) Data Validation
Data operators also need to list the information about the data project like the description, data format, auth functions, requirements, access policy. Then after data auth process by auth engine which executes auth function defined by the operator, data report produced. With it, data providers can add their datasets into data projects.
Operator-Consumer
Compared to providers, the number of operators and consumers is both relatively small. Operators sell the packed data projects to process the requested result by the consumers.
1) Data Token Pricing
The cost of data collection is high, so the operators need to carefully design the token model for sale. Consumers also need to select and compare, in order to get the appropriate analysis results. Therefore, for operator-consumer, it is much better to trade by active selection rather than default automatic design. Whether it’s an exchange sale or an auction depends on the choice of operators.
Therefore, Auth3 divides the whole marketplace into two markets. One is the market where data providers provide data to operators, the other is the market where data operators trade with consumers.
2) Data Computation
There is another auth process, called computation auth. Once the auth engine receives a data computation request from data operators, it will pull data, the requested algorithm by the data consumer, to verify and compute. Also, auth engine will produce a computation report to data consumers to prove the authentication of the whole process.
Two Markets
Market 1: The market where data providers provide data to operators
For each type of data, Auth3 will set a basic price. For example, the data of people’s health is more expensive than the data of people’s traffic data. And when data providers upload data, Auth3 will estimate the data based on the system’s rating standards when the user uploads it. The rating is related to the scale, kind, quality of the data, and the identity of the data provider.
In Auth3, by default, data operators will use this price as the bid price of providers’ datasets, and data providers can use this valuation as a reference price. If providers choose to price based on the reference value, they can directly establish a connection with the data project on the market and add it to the data project for profits. (Auth3 DAO will supervise the data marketplace and punish the data operators who recklessly build the data projects for-profits.)
We believe that most data providers will allocate the data usage rights to all operators by the reference price to maximize providers’ benefits. And there also might be a small number of data providers like celebrities, who want to allocate their own data usage rights in limited quantities, or set higher prices. In this case, they become data operators.
The reward of the providers will be paid in the form of a data token after the operator publishing the data project. How many data tokens will be paid is related to the proportion of providers’ data value in the whole project, the token model of the data token set by its operator. For example, Carol’s social data rank A, and she provides 100 pieces. Its value accounts for 1% of the data project operated by Rick. Rick sets the token model: give 70% of the data tokens to data providers, and the proportion of the given data tokens is equal to the proportion of providers’ data value. Therefore, Carol can receive 70%*1% of the total value of this data token.
Market 2: The market where data operators trade with consumers
Because data projects are a collection of diverse datasets which contain great complexity, Auth3 gives data operators enough autonomy to design economic models to issue data tokens.
And Auth3 provides a large infrastructure panel that aggregates a variety of market tools and code templates in order to give convenience to operators.
Conclusion
The separation of the Auth3 marketplace into two markets is a thoughtful result after our abundant considerations of different relationships and interactions among data providers, data operators, and data consumers. With the help of the Auth engines and Auth3 market tools, we are extremely excited and confident about the release of our main net and the further diverse data token distributions bred in the marketplace.
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