DALN (Data as Labor Network)

[karensheng]

Open Grant Proposal: DALN (f.k.a. SPN DAO)

Project Name: DALN (Data as Labor Network)

Proposal Category: Applications.

Individual or Entity Name: DALN Labs

Proposer: karensheng

(Optional) Filecoin ecosystem affiliations: DALN (f.k.a. SPN DAO) was in the FVM Early Builders program until April 2023.

(Optional) Technical Sponsor: Jenks Guo, Filecoin Foundation; Sarah Thiam, Protocol Labs

Do you agree to open source all work you do on behalf of this RFP under the MIT/Apache-2 dual-license?: Yes.

Project Summary

DALN is a data DAO that empowers consumers to turn their credit card transaction data into assets and have direct control over the use and monetization of their data. We are building Phase II of the product for mainnet launch on FVM.

With 1.86 billion credit card transactions completed daily worldwide, aggregated spending data represents the most lucrative data type in the alternative data market. Projected to reach $143.31 billion USD by 2030 with 54.4% CAGR, this field is ripe for disruption by products like DALN that shift control back to consumers.

DALN confronts several critical problems in the existing alternative data ecosystem:

• Consumers lack ownership and control over their own data, despite fueling this lucrative data economy.
• Central intermediaries like card issuers and data brokers currently capture all the value from selling access to aggregated personal data.
• There is a need for a network that can coordinate and pool data in a privacy-preserving way, without concentrating power in centralized entities.

With the support of Filecoin Next Step Microgrant, we completed Phase I of the project and deployed a demo app on the Calibration testnet of FVM. The Phase I product features:

• tokenization of data assets with cryptographic encryption and access control;
• ingestion of anonymized credit card transaction data through the Plaid API;
• verifiable on-chain decryption of data and payments to data contributors;
• a token burn mechanism for compliance with GDPR ("the right to be forgotten").

In preparation for the mainnet launch on FVM, Phase II entails a complete redesign of DALN's architecture and user experience to maximize end-user privacy and ease of adoption. We aim to eliminate all friction points for web 2.0 users migrating to our platform. On the B2B side, FVM's programmable storage underpins a trustless data marketplace where we can create subscription and data licensing business models.

By overhauling both consumer-facing and B2B products, Phase II will realize DALN's full potential as a network empowering people to collectively leverage their data as assets outside the extractive web 2.0 paradigm. We are building DALN as the on-ramp for the mass adoption of an open and fair data economy.

We are going to provide more details about integrations and functionalities in the "Outcomes" and "Development Roadmap" sections.

Impact

DALN represents a paradigm shift from viewing user-generated data as free capital to recognizing it as labor that should be fairly compensated.

The success of DALN will bring millions of data contributors ("end-users") and thousands of SMBs and enterprise clients into the FVM ecosystem. With over 184 million adults in the U.S. alone owning at least one credit card, the potential user base is enormous. While DALN integrates numerous cutting-edge technologies under the hood, the UX will conceal this complexity entirely. We will provide features like login with web 2.0 credentials, self-custodial wallet creation, and gasless transactions to enable seamless interactions with decentralized apps. This frictionless UX facilitates onboarding millions of users onto FVM and Filecoin with ease.

Major financial players like hedge funds, investment firms, and retailers currently spend millions acquiring data from traditional marketplaces and alternative data brokers. By instead storing encrypted data on IPFS and settling transactions on-chain via FVM, DALN provides a profoundly impactful new model. As the network grows, DALN expects to store terabytes of encrypted data on IPFS and facilitate licensing fees reaching hundreds of thousands of dollars settled on FVM. DALN has the potential to reshape how data is valued and exchanged among key industry stakeholders accustomed to opaque markets and intermediaries.

While several existing products claim to reward users for contributing data, these projects often obfuscate how they actually monetize the pooled data. With DALN, these transactions become transparent and traceable. In addition, redistribution of a significant portion of the revenue among the data contributors will be programmed in smart contracts and therefore can be audited.

Furthermore, DALN empowers members to form sub-DAOs (e.g., investment DAOs) with equal access to licensing the pooled data for co-creating innovative use cases. This possibility resonated with participants in our focus group interviews and unlocks lots of opportunities for collaboration in an open data economy.

DALN's potential reaches far beyond credit card data monetization. The underlying technology can expand as an infrastructure, enabling users to leverage all varieties of alternative data and user-generated content with full privacy and control. With the rapid development of generative AI, all kinds of data (text, code, images, and structured data) are being ingested into the "supply chain" of training and fine-tuning large AI models. This has further entrenched the exploitative perspective of data being viewed as free capital.

Failure to launch DALN will be a lost opportunity to prove the viability of data DAOs. DALN is an experiment with huge implications for reimagining a more transparent and equitable data economy.

Outcomes

Deliverables for this grant will consist of these key components:

• A consumer-facing dApp deployed on the FVM testnet and mainnet:

1. An interface where end-users authenticate access to their credit card accounts through the Plaid API and download the data locally (browser session cache).
2. Analytics jobs executed on the end-users‘ transaction data through a compute-over-data mechanism. Analytics at the user level include spending on a daily or monthly basis, and spending by category (air travel, groceries, restaurants).
3. Creation of a soul-bound token that represents DAO membership
4. A personalized dashboard that provides data contributors with insights into their spending habits and trends, unlocked through their credit card transaction data. Users can gain a thorough understanding of their spending behavior thanks to this secure token-gated dashboard that uses advanced analytics. By starting with a "single-player mode" focused on delivering value to individuals first, we avoid the "cold start" challenges faced by many two-sided platforms that struggle to attract users without established network effects.

• A data marketplace deployed on FVM that incorporates programmatic storage in the Filecoin network. DALN functions as an intermediary that collects, aggregates, and analyzes all the data from data contributors.

1. The pooled data is encrypted before being stored on the Filecoin network.
2. We employ cryptographic access controls and time-bound tokens to license data usage rights.
3. To collectively steward this ecosystem, a multi-sig wallet secures proceeds from data licensing and other transactions.

• Token-gated dashboard for B2B clients to access analytics insights generated from the pooled data.
  1. This is a subscription-based product for monetizing the pooled data. Instead of licensing the pooled data in its entirety, SMB and enterprise clients could purchase time-bound tokens to unlock access to analytics and visualizations of the pooled data.

The metrics that we are going to use to measure the success of DALN are:

1. The number of users who sign up for the waitlist prior to the mainnet launch
2. The accumulative number of data contributors (end-users) onboarded to the platform
3. Week-over-week and month-over-month % growth of users onboarded
4. Monthly active users who log into the personalized dashboards to track their personal finances
5. The total number of credit card transactions collected from the DALN app
6. The number of B2B clients who sign an LOI to try out the data marketplace
7. Actual sales proceeds from the data marketplace
8. The amount of passive income that data contributors generate
9. Feedback from both end-users and B2B users with regard to the product design and user experience.

Adoption, Reach, and Growth Strategies

Since the Plaid API currently enables connections to financial institutions in the U.S. and Canada only, DALN will concentrate initial onboarding efforts on data contributors located in the United States.

With 184 million American adults possessing at least one credit card, our target audience comprises consumers aged 18–49 in the U.S. Younger demographics more actively utilize cards for retail transactions, making them ideal early adopters.

Our growth strategy leverages content marketing and SEO to direct traffic to the platform for signups before the mainnet launch. Content will focus on educating audiences about data economies, empowering them to grasp the potential of exerting control and ownership over their personal data.

We will leverage partnerships in multiple channels to build the top of the funnel. These include:

• Content creators who have a wide reach on social media. These are not mega-influencers, but creators who are aligned with our mission. We already have a few leads in the pipeline.
• Existing Web3 communities, including DAOs and NFT communities
• Partnerships with blockchain clubs at colleges and universities.

The growth of B2B clients for the data marketplace will be sales-led at an early stage. Instead of financial institutions like hedge funds, we will focus on onboarding e-commerce merchants and retailers who want to connect with the same audience aged 18 to 49 in the U.S. Strategies include cold outreach campaigns to Shopify merchants, and partnerships with AIGC startups that serve e-commerce merchants and retailers. B2B clients in this segment care more about analytics insights and the opportunity to connect with potential retail customers.

Prior to the mainnet launch, we are going to onboard a minimum of 100 data contributors for an incentivized testnet launch, to seek feedback about the product, and to test the reliability of the system.

Development Roadmap

The development of DALN for the mainnet launch will be divided into several milestones.

Milestone #1: Consumer-facing dApp for data ingestion and user onboarding.

Functionalities include:

• An intuitive user experience that seamlessly onboards both web3 and web2 users. By integrating solutions like Biconomy and Privy, we enable easy login with existing web 2.0 credentials and self-custodial wallet creation.

• We will ingest transaction data through Plaid API, upgrading from sandbox to development and production environments to access live accounts. This builds on integrations developed during Phase I.

• A key innovation is running compute jobs locally on users' devices to derive aggregated outputs from their raw transaction data. This preserves privacy while only transmitting high-level summary data to a secure cloud database. Though conceptually straightforward, building this distributed on-device computation represents the most complex implementation in DALN's Phase II technology stack. By restricting raw data access and minimizing shared information, we fulfill our commitment to data sovereignty. The engineering challenge of localized analytics will position DALN at the frontier of privacy-preserving computation.

• Data contributors will mint soul-bound tokens (SBTs) representing DAO membership. We will convert these into token-bound accounts (TBAs) using ERC6551. This framework provides flexibility to configure utilities for the SBTs in the future.

Staffing required:

• One developer with expertise in distributed system design, data engineering pipeline,s, and privacy-preserving computation methodologies.
• One developer with expertise in smart contracts and integrations of web3.0 SDKs.
• One developer with expertise in front-end development.
• One UI/UX designer.

Funding required: $25,000

Timeline: September 15 to November 15, 2023. We have allotted 2 months for this milestone, including time for the testnet launch and comprehensive testing. The testnet period enables us to identify and resolve any issues prior to mainnet deployment, reducing risk and ensuring a smooth launch.

Milestone #2: Token-gated end-user dashboard

Functionalities include:

• Token-gating mechanism for secure access to personalized dashboards.
• Analytics and visualizations that provide data contributors with insights into their spending habits and trends.
• A token burn mechanism for data contributors to exit and opt out of being included in the pooled data.
• We will sync the pooled data whenever an existing DAO member exits and opts out.

Staffing required:

• One developer with expertise in system design and data engineering pipeline.
• One full-stack developer with expertise in front-end development and integrations with smart contracts.
  • One UI/UX designer.

Funding required: $6,000

Timeline: 4 weeks (November 16 to December 14, 2023). We have allotted 4 weeks for this milestone, with an additional 1-week buffer built in to account for the Thanksgiving holiday in the United States. This ensures we have sufficient time for a successful delivery despite holiday schedules.

Milestone #3: A data marketplace and SaaS dashboard on FEVM

Functionalities include:

• We will apply cryptographic encryption and access control to the aggregated and anonymized data.
• We will create programmatic storage deals for the encrypted data for storage in the Filecoin network.
• We will provide B2B clients ("data buyers") with a time-bound free trial token to access a small subset of the aggregated data.
• Data buyers (e.g., hedge funds, investment sub-DAOs) will be able to make on-chain payments in Filecoin and decrypt and download the aggregated data for licensing usage.
• KYC is optional for data buyers who wish to license the aggregated data in its entirety to make sure that usage of the data will be ethical.
• Zero-knowledge proofs enable data buyers to validate content and quality before purchasing for licensing usage.
• Data buyers (e.g., e-commerce, retailers) can mint renewable, time-bound tokens to access the SaaS dashboard to view analytics insights generated from the pooled data.

Staffing required:

• One UI/UX designer.
• One full-stack developer with expertise in smart contracts and integrating cryptographic encryption and access control solutions.
• One developer with expertise in front-end development.
• One developer with expertise in system design and zero-knowledge computation.

Funding required: $12,000

Timeline: 6 weeks (December 15, 2023 to January 25, 2024). We have allotted 6 weeks for this milestone, with a buffer built in to account for the Christmas and New Year holidays. This ensures we have sufficient time for a successful delivery despite holiday schedules.

In addition to all the staffing described above, the product lead will manage all aspects related to product design, scope definition, requirements, and coordination of engineering resources.

Total Budget Requested

Milestone #	Description	Deliverables	Completion Date	Funding
1	Consumer-facing dApp	A consumer-facing dApp for data ingestion and onboarding of data contributors.	November 15, 2023	$25,000
2	Token-gated end-user dashboard	A personalized dashboard that provides data contributors insights into their spending habits and trends.	December 14, 2023	$6,000
3	Data marketplace and SaaS dashboard for data buyers and subscribers.	A dApp for data buyers and subscribers to either view analytics on a subscription basis or license data usage on an annual basis.	January 25, 2024	$12,000

Maintenance and Upgrade Plans

The success of DALN doesn't end with the completion of the development roadmap. The maintenance and upgrade plans are aligned with our long-term GTM and growth strategies. These plans include but are not limited to:

• Designing an algorithm to score the quality of raw transaction data that each end-user contributes.
• Linking aggregated outputs from multiple credit card accounts to one soul-bound token. This is possible with the configuration of token-bound accounts with ERC6551.
• Designing a mechanism to redistribute a significant portion of revenue to data contributors, programming it into smart contracts, and automating the payments to all data contributors.
• Personalized offers of rewards and premium benefits based on the analytics insights into each data contributor's spending habits and trends.
• Giving data buyers, including sub-DAOs, the option to monetize analytics insights that they generated from the pooled data.
• Governance. Our focus group interviews revealed that users may prefer benefits and utilities other than direct monetary rewards. These benefits include the ability to re-direct the rewards to other worthy causes, such as carbon offset protocols.

These upgrade plans will strengthen incentives to grow a thriving data economy over time and reward data contributors for high-quality data. Meanwhile, emerging monetization options will attract more data buyers and sub-DAOs.

As mentioned above, the underlying technology of DALN can expand as an infrastructure enabling users to leverage all varieties of alternative data and user-generated content with full privacy and control.

Team

Team Members

Karen Sheng Miffy Wu Yifeng Wang Kevin Gelpes Michael McNelis

Team Member LinkedIn Profiles

Karen Sheng

Miffy Wu

Yifeng Wang

Kevin Gelpes

Michael McNelis

Relevant Experience

We have assembled a team with deep expertise across blockchain technology, data engineering, fintech, and growth. This cross-functional team combines the ideal skills and experience to deliver on our complex technical roadmap and growth strategies.

The product lead, Karen Sheng, has 13 years of experience across economics, data science, and machine learning. She has led R&D and product launches across B2C fintech, web 3.0, and AI infrastructure.

Miffy and Kevin are full-stack developers who have track records of building complex products across DeFi, NFTs, and DAOs.

The UI/UX designer, Yifeng Wang, has been collaborating with Karen on iterations of the design and development of DALN since its inception at Hack FEVM in November 2022.

Furthermore, Michael McNelis is an experienced growth leader with expertise in go-to-market strategy and product marketing and used to own P&Ls >$100 million. Having a CMO onboard at the same time when the product is under development helps us craft and calibrate our product and growth strategies and de-risk early-stage traction even before we launch.

Team code repositories

https://github.com/DALN-app

Additional Information

I learned about the Open Grants Program from Jenks Guo at Filecoin Foundation and Sarah Thiam, Developer Experience Lead for FVM. I've discussed the possible solutions for compute-over-data with the Bacalhau team (David, Simon, and Allie).

The best email address for outreach is karen@daln.io.

This is our presentation at the Hacker Base at ETHDenver 2023, organized by the Filecoin Foundation and Protocol Labs:

The FVM team at Protocol Labs has highlighted SPN DAO (our project's name prior to rebranding) as a prime example of data DAO use cases on FVM at numerous presentations. After watching our presentation at ETHDenver, Colin Evran, Head of Ecosystem Growth at Protocol Labs, cited the use case of leveraging the Filecoin ecosystem in monetizing anonymized credit card transaction data during an interview with Nasdaq.

[karensheng]

@jenks-guo-filecoin, thanks for being our technical sponsor and for providing feedback.

[karensheng]

Adding @trruckerfling as a second technical sponsor.

Hi @ErinOCon, please let me know if you've got a chance to review our application. My team is keen on continuing building DALN (aka SPN DAO) for mainnet launch on FVM.

[ErinOCon]

Hi @karensheng, thank you for your proposal and for your patience with our review. Your application is still under review, but we expect to have more information available in the coming weeks.

If we have any questions for your team, we will be sure to connect on this thread!

[karensheng]

Thanks, @ErinOCon!

[ErinOCon]

Hi @karensheng, thank you for your patience with our review. Unfortunately, we will not be proceeding with a grant at this time. We are wishing you all the best as you continue to build!