Introducing Blockchain-Powered Minimum Viable Logistics Data Marketplace
By: Ocean Protocol Team
Tags: Data Monetization, Marketplace, Use Cases, Logistics, Homepage

Introducing Blockchain-Powered Minimum Viable Logistics Data Marketplace

By dexFreight and Ocean Protocol

The first Web3 data marketplace for the transportation and logistics industry is now live. Created by Ocean Protocol and dexFreight, the data marketplace enables companies to aggregate and monetize operational data, in a cost effective and secure manner while leveraging blockchain technology.

Overview

In this blogpost, we present the minimum viable logistics data marketplace and its features, in detail. We will take a look at the Web3 architecture provided by Ocean Protocol, which enables:

Publishing data on blockchain

Smart contracts as escrow services

Funds transfer between data provider (aka publishers) and buyers (aka consumers)

Sign obligatory service contract using crypto wallet

In the coming months, both teams will continue to make improvements to the marketplace to ensure that the user experience is optimized for an ideal data buying and selling process.

Equitable Monetization of Data

Fifteen trillion dollar logistics industry is sitting on top of a vast data reserve unable to unlock and monetize it. dexFreight and Ocean Protocol have collaborated to build the first Web 3.0 marketplace to allow logistics companies (freight brokers, shippers, and carriers, and technology providers) to trade their operational data not only to generate additional revenue and savings, but also to make the data available for the community to build better products and processes, and to minimize their environmental impact. We believe a marketplace such as this will unlock the opportunity worth billions of dollars every year.

Data is an Afterthought for Many Companies

Eric Johnson of the Journal of Commerce, said it precisely, “Logistics companies overvalue their data because they are not being shared with outside entities. Instead, they stay inside the company’s four walls.” These sparse data must be freed from their silos for the industry to discover new business opportunities. Unfortunately, small and medium size logistics enterprises (SME) do not have the technology and resources to publish their data. They also lack monetary incentives to do so because publishing data is not their core competency. For many SMEs, trading their operational data is an afterthought. We want to change that paradigm and allow companies to trade data without having to invest in technology and/or resources to do so.

Price Discovery and the Value of Data

Before a data marketplace scales, the following three interrelated primitives have to be solved.

Tagging the Fair Market Value of Data. For example, what is the price of 100 shipment booking data complete with origin-destination, equipment type, freight charges etc. There are no straightforward answers to that question. This creates a significant friction to adoption of a marketplace because even if we convince trucking companies to sell data, they can’t put a price on that piece of data. The same dilemma exists for data buyers. Price discovery of data is difficult, especially when there is no marketplace to begin with. Making Trucking-Related Operational Data Attractive. Most small and medium size trucking companies move 100–1000 loads a month. The amount of shipment data generated by a company is small. But what if they are able to pool the data in the marketplace and receive selling price proportionately? Quality Control of Data. This requires that the shipment data originates from the source, which in most cases is a Transportation Management Systems (TMS). It is reasonable to assume that companies limit the fake data inside TMSs because they are often integrated with the company’s accounting systems, employee performance management etc.

We admit that we don’t have clear answers to solve these three primitives. While more research is needed, we figured the best way to look for answers is to build a marketplace nonetheless.

Introducing a Logistics Data Marketplace

dexFreight and Ocean Protocol joined hands to build this Web 3.0 decentralized logistics data marketplace. Web 3.0, because the marketplace itself doesn’t hold the user’s tradeable data and provides underlying protocols based on blockchain to create smart contracts for buyers and sellers to trade data and issue tokenized payments. The marketplace is a public utility infrastructure for logistics to trade data without holding the data hostage and rent seeking. The public utility has to sustain and hence will charge a proportion of selling price, like any other marketplace.

“We’ve engineered a marketplace that enables intuitive publishing and consumption of data, with a user-friendly UI to help with onboarding. Inherent to Ocean technology, the marketplace offers transparency and trust to both data providers and consumers. We’re fulfilling a need in the market by ensuring lower costs for those stakeholders.” said Alex Coseru, VP of Engineering at Ocean Protocol.

Underlying Architecture

Every time a data asset is published, it is attached with the following services:

Metadata — describing the asset

Provenance — describing the asset’s provenance

Consume — describe conditions to be fulfilled in order to consume this data

Compute — describe conditions to be fulfilled in order to run compute on top of the data

The marketplace runs on the underlying architecture developed by the Ocean Protocol, which includes the following three logical layers:

Layer 1 — Network level (EVM nodes and smart contracts)

Layer 2 — Component level (Ocean metadata storage, Ocean proxy, libraries)

Layer 3 — dApps by ecosystem (marketplaces, data management platforms)

Location of data published in the marketplace is provided with a unique decentralized identification or DID (of the metadata) by the Ocean Protocol’s network of blockchain nodes of Parity EVMs. It stores a fragment of the encrypted URL of the data assets. In order to decrypt the whole URL, a consensus of nodes is required. The DID along with other attributes are registered in Keeper smart contracts.

The Ocean Proxy is the only component that should access the published data. It performs checks on chain for buyer permissions and payments. It also decrypts URL on behalf of the buyers and provides access to data assets by streaming data (and never the URL). The Ocean proxy is typically run by the data publisher. Ocean Protocol also includes libraries to connect all components together and facilitate publish/register and consume/purchase flows.

Buying a Data Asset: Step-by-Step

When a buyer wants to purchase a data asset, it informs the Proxy using DID as a reference. A service agreement is signed between the buyer and the publisher using Metamask wallet. Value of Ocean tokens are then transferred from the buyer’s wallet to the Keeper contract, which acts as an escrow. The publisher agrees to the purchase and streams the data to the buyer via the marketplace and signals the fulfillment of the purchase to the Keeper contract, which releases the funds back to the publishers after dispute timeouts. The marketplace developers will retain a small portion of the funds in order to maintain the infrastructure.

The architecture allows anybody to publish the logistics data without offloading the asset to the marketplace. The Ocean Proxy can be run by the publishers themselves and attached to their enterprise systems as nodes where the data first originates from. “That’s why this marketplace is so different from other data marketplaces out there because the data doesn’t leave your storage and hence prevents a third party from selling or manipulating the data without your knowledge. It is a decentralized data marketplace,“ said Rajat Rajbhandari, Co-Founder of dexFreight.

Connect Your TMS, FMS to the Data Marketplace

Large sections of US freight brokers and trucking companies use TMSs to create and manage their shipments. TMSs are valuable nodes with the ability to publish shipment data (by anonymizing address and customer details) into the marketplace via API or to a third-party storage. Some TMSs have clear policies never to provide customer data (regardless of anonymity), however some TMSs can do so. In such an arrangement, it is incumbent upon the TMS to share revenue with their customers.

Data Commons

We encourage logistics companies to publish old and unused data assets for free. This will allow developers, engineers, and academia to build new analytical methods, machine learning tools, and perform research without paying a hefty price for the data. The companies can assert by selecting the appropriate licensing rights so that they are properly cited and mentioned in the resulting research.

Future Releases

The teams at dexFreight and Ocean Protocol are strong proponents of data decentralization and understand the power of Web3-based technologies. There is still a way to go. We are working hard with researchers to make our platform, and others alike, more user-friendly and frictionless.

If you’re working on technology that may be complementary to our marketplace or simply want to provide feedback, send us a note: info@dexfreight.io or info@oceanprotocol.com