Why build XnY？

The Data Bottleneck in AI

The biggest challenge holding back AI isn't just about technology or algorithms—it's about data—especially frontier data. This high-quality, domain-specific data is crucial for building vertical AI agents and achieving Artificial General Intelligence (AGI). However, much of this data goes untapped because there isn't an efficient way for AI developers and scientific researchers to access or utilize it effectively.

AI teams, particularly DeSci researchers and small AI startups, are increasingly becoming mainstream. Small, agile teams have the potential to disrupt industries, but they need access to the right data to succeed. The current data ecosystem, which undervalues the contributions of data creators, keeps this data out of reach and limits innovation. To unlock AI’s full potential, we must open up access to high-quality frontier data and ensure fair value distribution.

The Royalty Model: Aligning Incentives

The royalty model is our solution to align incentives between data creators and AI developers. Instead of paying upfront, AI developers can share in the risks and rewards of data creation, reducing the financial burden and fostering collaboration.

We believe that vertical AI teams will continue to shrink, with the next unicorn possibly being led by a solo founder. The royalty model supports this shift by backing small, innovative teams willing to share risks and rewards.

Highly-skilled contributors, such as healthcare professionals or legal experts, are more likely to participate when they share in the success of their contributions. By tying compensation to the value their data generates, we drive participation and improve data quality over time.

XnY: Turning Data into Assets

To make this system work, data must become an asset—something that can be priced and traded effectively. Data pricing is challenging due to its dynamic and context-dependent nature. Building liquidity is key to an efficient exchange where auctions determine fair value. Assetifying data ensures pricing adapts to changing demands and reflects true value.

Data valuation and attribution algorithms quantify each data point’s impact on AI development. While this helps rank data points and distribute value fairly among data creators, auction-based pricing is also essential. It allows investors to meet the liquidity needs of data creators across mixed timelines, improving the health of the entire rewards system.

XnY is a blockchain infrastructure that certifies and assetifies data. By turning data into digital assets, we enable efficient pricing, trading, and ownership transfer, making high-quality data accessible to AI developers and supporting value discovery as demand grows.

We believe high-quality frontier data will increase in value as end-to-end AI delivers superior performance and becomes central to achieving AGI. Data creators will play an essential role in driving progress and capturing value in the evolving data economy.

Codatta: The Data Marketplace

At the core of this system is Codatta, a marketplace connecting AI developers and data creators. Much like ad exchanges, Codatta links those who need data with those who can provide it. It’s a permissionless platform—anyone can participate, with transparency guaranteed by blockchain technology.

Codatta is also building a data asset exchange where data can be traded and valued. This exchange helps set the true value of data based on its utility, democratizing access for AI developers across the board and accelerating progress toward AGI.

Conclusion

Connecting AI developers and data creators directly unlocks immense potential for vertical AI and decentralized scientific research, making valuable solutions more accessible. As Garry Tan, President and CEO of Y-Combinator, said, "Vertical AI agents could be 10X bigger than SaaS." Imagine affordable healthcare, legal support, and education—how much better could the world be? This rising demand for high-quality frontier data is crucial to building transformative AI solutions that will drive these changes.

XnY and Codatta solve the broken data ecosystem by incentivizing data creation with royalties, turning data into liquid assets, and creating an open marketplace to unlock AI’s full potential. End-to-end AI will lead us to AGI, and it needs frontier data, which is becoming increasingly valuable. With domain AI, future research can be more effective, and the royalty-based model ensures data asset holders benefit through revenue-sharing. Holding data is like investing in a portfolio of AIs, enabling contributors to share in the value their data creates. We envision a future where data ownership is shared, value is distributed fairly, and frontier data forms the foundation for AGI and numerous vertical AIs.