Employing an institutional-technical co-evolution lens, this study utilizes grounded theory research in YT City to uncover the multi-layered construction pathway of the data factor market ecosystem. Findings reveal that under the symbiotic effect of the institutional construction layer (policy momentum-driven) and the technical empowerment layer (infrastructure-supported), market entities realize factor value-added through the value emergence layer (business model innovation), while the dynamic stabilizer (governance adaptation) maintains system equilibrium. YT City’s pioneering “Six-in-One” model demonstrates how typical prefecture-level cities can overcome data silos through institutional-technical inter-embedding, providing a novel paradigm for the data factor market in non-pilot cities nationwide.