DataDAOs and Data Pooling
Getting the most out of the TIKI user experience
If you’ve been navigating trends in tech in the past year or so, you almost assuredly have come across the term Web3. One relatively new development that has emerged from thought leaders in the Web3 space is the DAO, or decentralized autonomous organization. A DAO operates on the blockchain and is governed by the execution of smart contracts proposed, vetted, and voted upon by individuals (members of the DAO) equipped with varying degrees of governance power Voting power is usually tethered to the issuance of tokens native to the specific DAO or general cryptocurrencies such as Ethereum. The DAO infrastructure allows for individuals—and not centralized entities— to have ownership over the strategy and governance of a given entity. In this specific instance, the governance of a data pool is covered, and the type of DAO will be referred to as a DataDAO.
A DataDAO in this context manages the pooled data of any amount of users. Data pooling, simply put, is the compilation of various sets of user data, be it multiple data sources from an individual user, or one or many data sources from any number of users. This sets the framework for a new type of transactional economy and a new method of data exchange on the internet.
Individual users pool their data together with other users in order to increase the value of the data. Usually, data from one individual is not particularly valuable, but the value increases with each pooled data source from an individual and, more importantly, with multiple pooled data sources from many users. Data pooling allows for multiple users to package their data together to trade with the businesses who seek and rely on data and the derived insights generated from it.
In order to govern what happens with the data (i.e. where it is traded, what purpose(s) it is used for, for what duration of time the data can be used, what is received in return), a logical means to manage this would be the creation of DataDAOs.
As mentioned, data pooling is simply the grouping together of multiple data sources for an individual user or one or many data sources from any number of users. This is beneficial in that the pooled data of users will hold more value to a business than an individual set of user data. Because the pooled data holds more value to a business, the negotiation power of the users also increases.
SMBs (small to medium-sized businesses) are most impacted by recent data privacy changes , such as Apple’s iOS 14.5 update in 2021, and are often competing with larger-sized corporations who have access to copious amounts of user data. Users can exchange pooled data to businesses they believe in to enable them to create better user experiences and optimize their products. This allows SMBs to be more competitive in the market and deliver products and services that customers want and need.
More, and better, data means businesses will “pay” users more, with greater discounts, and more loyalty points among the many potential ways businesses can compensate users.
The Role of DataDAOs
The presence of DataDAOs allow for the shared innovation and value creation. Members of the DAO vote and provide structure and influence as it pertains to the exchange of data. Whereas the previous “model” for data exchange on the internet involved confusing opt-in agreements in the best case scenario and data harvesting in the worst, the new model allows for consensual, transparent and safe exchange of data between users and businesses (and businesses to businesses, or users to users). The potential for more powerful insights to be created in this “new” model is very possible, as businesses can be specific about what data and insights they are looking to acquire directly from a user, while users are offered the transparency of understanding the use case and compensation for their exchanged data. As mentioned in the previous section, the ability to pool data adds to potential higher value data insights and, in turn, better compensation for the user.
In a DataDAO, users own their data and pool it with other uses for specific purposes in exchange for specific compensation. Compensation is distributed across members of the DAO, and in exchange, businesses, organizations (and more) obtain access to useful (valuable) data they may otherwise have not had access to. Governance structure allows for users to vet potential businesses in terms of the proposed use cases for the data and potential security risk (i.e. has the business been hacked before?). Auditable transactional logs are generated that are transparent and do not require the intervention of any third-party.
Data DAOs with TIKI
TIKI is creating a decentralized data exchange (data DEX) which allows users to safely transact anonymized user data with businesses in exchange for perks and benefits. The back-and-forth negotiation that occurs between users and businesses (i.e. “I would trade my data for this, but I wouldn’t trade my data for that”) extrapolated out across millions of instances provides a framework for the creation of a FMV (fair market value) for data.
Using TIKI’s technology, DataDAOs specific to the data DEX can be built.. These DataDAOs, as mentioned, incentivize users working together in order to increase the value of their data. The governance structure of the DAO allows for data sovereignty, i.e. the actual owners of the data make the decisions about how the data is used. This can range from use cases, to compensation, to the terms of the licensing contracts with businesses on the data DEX.
As we navigate into the Web 3 world, tremendous opportunity arises with the creation of various types of decentralized autonomous organizations (DAOs). With two states (Wyoming and TIKI’s native Tennessee) recently passing legislation allowing DAOs to register as LLCs, the popularization and utility of DAOs are primed to grow.
One specific type of DAO is a DataDAO, which can utilize data pooling (one or many data sources from one or any number of individuals) in order to increase the value of their data. Utilizing blockchain technology, DataDAOs can create a governance structure that enables data sovereignty for each individual member of the DAO.
With the inception of TIKI’s data exchange (data DEX), users (and businesses) will be able to build DataDAOs using TIKI’s technology. As a result, the establishment of a fair market value (FMV) for data and a new, mutually beneficial data economy becomes closer to a reality.