While we’ve recently increased our development efforts and communications around the Streamr Network in preparation for shipping the Brubeck milestone this year, we are also continuing to push the Data Unions framework forward as a key deliverable of the Streamr project alongside the Network.
As you may have seen, we achieved a major milestone on the Data Union track in March when the brand new Data Unions 2.0 framework went live on Ethereum mainnet and xDai chain, starting the multi-chain journey of the DATA token. In this blog I’ll outline some of the upcoming directions we’re exploring for Data Unions. What’s next, from a development point of view?
Data Union Springboard
One of the main obstacles in starting a Data Union is getting funding. While the Streamr Data Fund is in place to help Data Union builders get started, more money will eventually be needed to turn a promising idea or prototype into a polished product and a business.
A while back, Swash, the largest Data Union in the Streamr ecosystem, came to us with an idea – collaborating on a Data Union fundraising platform. This platform would be a place where individual Data Union projects could launch their own token and raise funding from the crypto community. The Data Union Springboard would be a dedicated new website for this purpose. Under the hood this new launchpad would leverage existing liquidity pool ecosystems familiar from the DeFi space, such as Balancer or even Uniswap pools, to implement the token offerings, bootstrap liquidity for the new tokens, and offer yield farming opportunities for holders of DATA and the Data Union specific tokens.
I’m happy to say that this work is now in progress, and it is currently in a research phase in order to identify and prototype the most suitable DeFi building blocks for this application.
Withdraw to Binance
Right now, we’re also working on a new feature that enables the withdrawal of earnings from Data Unions all the way to the Binance centralized exchange! This is already possible by depositing via Ethereum mainnet, but due to high gas costs, the current method is not a feasible path for withdrawing the typical Data Union earnings. However, this issue can be solved by withdrawing on xDai chain (cheap!), bridging the tokens to Binance Smart Chain (cheap!), and depositing to centralized Binance from there.
For the user, the feature can appear as simple as pasting your Binance deposit address and clicking a button. Under the hood however, there is a fairly complicated sequence of interactions between different smart contracts and chains, illustrating the power of on-chain composability:
- A transaction is sent to the Data Union smart contract on xDai chain, initiating the withdrawal of DATA tokens
- The tokens are withdrawn to an adapter contract, which swaps the withdrawn DATA to DAI using HoneySwap
- The adapter contract then sends the DAI to OmniBridge, instructing the tokens to be bridged from xDai chain to Binance Smart Chain
- On Binance Smart Chain, the tokens are bridged to the user’s deposit address for DAI on centralized Binance exchange
- And voilà, after a while the value withdrawn from the Data Union appears in DAI on the user’s Binance account and can be traded for fiat or other tokens, or even back to DATA!
The Withdraw to Binance feature uses DAI as a vehicle for the cross-chain transfer. DAI has the two required properties for this to work: it has liquidity on xDai chain, and Binance accepts DAI deposits via the Binance Smart Chain. In the future it could become possible to also deposit DATA via Binance Smart Chain to Binance, but as a first step the above process is already a big usability improvement.
Connecting Data Unions to DeFi
Currently, tokens earned by members stay in the Data Union smart contract until withdrawn. Instead of sitting idle, they could be automatically earning yield via DeFi liquidity pools, increasing the Data Union members’ earnings even more! We plan to explore this feature for the next major upgrade of the Data Unions framework.
Unlocking new chains
Data Unions currently run on xDai chain, which we love due to cheap transactions, reasonable decentralization, and mature bridges to both Ethereum mainnet and Binance Smart Chain.
However, we’re actively monitoring the development of various Ethereum-compatible chains and bridges in particular. We will seek to enable operating Data Unions wherever the best network effects arise. The ecosystems we’re currently looking at most closely include Polygon (previously Matic) and Binance Smart Chain.
Helping Data Unions make more sales
In general, an individual Data Union project should aim to sell its data products on as many venues as they can to maximise the income for its members. Potential venues include the Streamr Marketplace, but also others, such as Ocean Market, AWS Data Exchange, and direct sales. Our goals at Streamr are thus twofold: we should ensure that the Streamr Marketplace provides at least a basic set of functionality to make sales, but also make it as easy as possible to sell the data elsewhere.
On the Streamr Marketplace, as well as others that operate on Ethereum mainnet, the notoriously high gas costs currently prevent small purchases. To remedy this, the Marketplace smart contract will be moved to a sidechain (or even several sidechains) to bring down the gas costs and allow composability with other Streamr-ecosystem smart contracts.
Another obstacle for purchasing is the difficulty of onboarding to crypto. Few data buyers have experience with crypto. One obvious solution that already works today is to make direct sales in the traditional way, i.e. the Data Union team invoices a buyer, grants access to the data product, and pays the proceedings into the Data Union. This works well up to tens or hundreds of customers, which no Data Union anywhere has yet exceeded, but making the process more automated and more trustless will eventually still be needed.
The first step on that journey is to have good fiat on-ramps on the chains on which wewe operate on. Ramp already provides user-friendly fiat-to-crypto conversion on both mainnet and xDai, making things easy for users who are able and willing to install a wallet like MetaMask. We will work to further integrate their onboarding process into the Streamr Marketplace to facilitate sales.
Following the traction
While we already know we’ll be working towards at least the above mentioned directions, the most important input for the roadmap comes from our users, the actual Data Union builders. For this reason, the roadmap must remain flexible in terms of priority and timeline; our users’ wishes always take priority! To learn more about Data Unions and share ideas of feature requests, be sure to join the Streamr Discord and check out the #data-unions channel!