The vision of IoTeX is not only to provide a decentralized trust network for devices, but also to focus on building a "machine world" where all devices become part of a "machine society," enabling autonomous interaction and economic activities.

Compiled by: Tia, Techub News

In 2023, the concept of DePIN quickly rose to prominence and became a hot topic in the blockchain field. IoTeX had already anticipated this trend as early as 2017, focusing on the integration of the Internet of Things (IoT) and blockchain. The vision of IoTeX is not only to provide a decentralized trust network for devices, but also to focus on building a "machine world" where all devices become part of a "machine society," enabling autonomous interaction and economic activities.

In the original IoTeX whitepaper released in 2017, IoTeX was positioned as Layer1. However, based on the latest developments disclosed by IoTeX, its current strategic direction has shifted towards modularity, marking a significant strategic shift. To understand the reasons behind this, Techub News interviewed IoTeX co-founder Jing Sun during the TOKEN2049 event.

Techub News: DePIN only gained its name and popularity in 2023, but IoTeX demonstrated great foresight by establishing itself in 2017, focusing on the connection between IoT and blockchain. Could you share with us the reasons for establishing IoTeX at that time, and your reasons for joining IoTeX?

Jing: I joined IoTeX in 2017. Prior to that, I had been working in Silicon Valley as a venture capitalist for five to six years. In 2016, we observed that some projects were gradually moving towards distributed platforms, each with its own use case.

For example, I had previously invested in a project for 360-degree live streaming, and they found that building a network on their own was very expensive because it required a lot of upfront investment. However, once the network had community participation to provide idle streaming capabilities, the entire economy started to thrive. Personally, when I invested in early-stage distributed projects related to smart contracts, I firmly believed that this technology was not just for one industry; it could support various scenarios and use cases in different fields, making it a very worthwhile investment and a long-term strategic track.

By 2016 and 2017, the proportion of machine devices was already significant, and with the addition of artificial intelligence in the future, it is imaginable that machines will dominate the world. However, at that time, all devices, including cloud and data, were centralized. Moreover, connecting these machines was also a challenge. In a sense, machines are also an economy, much like a society. It is not feasible for one or two centralized companies like Google or Microsoft to provide all the backend support, as centralization cannot achieve autonomous circulation in the machine economy.

At that time, we were also looking at blockchain technology, and we felt that the combination of the two was very smooth. We believed that blockchain technology is more suitable for machines because machines need a decentralized system to support them.

Furthermore, the inherent economic mechanism of blockchain technology is highly compatible with machines. This is because the products produced by machines have value. After the machines complete production, how do they serve other machines or people? This requires an economic system. If this system is built on traditional economic systems, it is actually not feasible because it needs autonomy and needs to evaluate the value created by the machines.

So when we created Layer1 in 2017, we clearly stated that this public chain was specifically for machines and devices. At that time, DePIN was still very distant, and Infra did not exist, so we needed to build Infra from scratch. It took us about three years to build the Infra.

In 2019, Crypto experienced the DeFi Summer, followed by the development of GameFi. After the emergence of so many "Fi" projects, we also began to consider the most important aspect of the integration of IoT and blockchain, which is the financialization of machines. This led us to publish the MachineFi whitepaper. MachineFi is actually the prototype of DePIN.

Techub News: Can you provide a specific introduction to how blockchain decentralizes physical infrastructure, such as applications like IoT data on-chain or distributed energy? What is the specific logic behind it?

Jing: DePIN connects physical world devices and data to the blockchain using blockchain technology, achieving transparent data and decentralized control.

Specifically, the logic of blockchain in IoT and distributed energy applications is as follows: First, IoT devices or distributed energy devices (such as solar panels, sensors, etc.) need to have unique digital identities, which we call "Sovereign Smart Devices." These devices will locally process the data they collect in an encrypted manner and perform initial verification off-chain to ensure the authenticity and accuracy of the data.

Then, the verified data is transmitted to the blockchain and stored in a decentralized ledger. This process is usually completed through an off-chain to on-chain protocol, such as IoTeX's W3bStream protocol. W3bStream can validate device data according to predefined rules and, when certain conditions are met, upload key data to the blockchain, thereby saving the cost of on-chain operations.

For distributed energy projects, such as solar panels and energy storage systems, they can use blockchain for energy production, distribution, and trading. Each device has an on-chain identity and records the electricity it generates and its transaction history. Community users can automatically participate in energy trading through smart contracts on the blockchain, without relying on traditional centralized power companies. This model not only improves energy efficiency but also incentivizes more people to participate in energy production and distribution.

In these application scenarios, the decentralized nature of blockchain enables physical devices and the data they generate to no longer be subject to a single centralized institution but to interact in an open and transparent network. This allows the behavior and data of any device to be traced and verified, achieving true decentralized control and trust.

Techub News: The original IoTeX whitepaper released in 2017 positioned IoTeX as Layer1, but based on your latest disclosures, the current strategic direction is modular, which is a significant strategic shift. Could you discuss the logic and reasons behind this?

Jing: As the industry develops, our understanding is also constantly evolving. The needs of the projects we serve are different from those of typical NFT or crypto-native projects, which only need to find a Layer1 to issue tokens and complete TGE. However, DePIN has a large amount of off-chain machine data, and the prerequisite for uploading this data to the chain is to solve the problem of data verifiability, which is very important because the products of many projects are data. If the problem of data verifiability cannot be solved and the authenticity of the data cannot be guaranteed, the product logic may be difficult to establish.

Currently, some Layer1 platforms like Solana indeed have many projects working on DePIN, but these Layer1 platforms cannot help DePIN projects complete data verification. From a strategic perspective, we can become the underlying support for DePIN projects, providing middleware and various stacks needed by DePIN projects, and from a technical perspective, we can help projects complete off-chain data verification.

In the 2017 whitepaper, we proposed an architecture of root chain and side chains, which is actually the same as Ethereum 2.0. We believe that if DePIN projects become large, they will definitely have their own ecosystem, and behind the ecosystem, there also needs to be a chain that allows different projects to collaborate with each other, requiring a lot of interoperability. This is what IoTeX is doing; it is a DePIN Layer that enables various types of DePIN projects to collaborate.

At the same time, IoTeX also has W3bStream to help projects complete off-chain computation and verification of data, allowing DePIN projects to handle off-chain data more efficiently and economically, and realize the economic value of data.

Techub News: Can you talk specifically about the differences between W3bStream and traditional Rollup technology?

Jing: Traditional Rollup is mainly used for asset verification, with higher security requirements, so every transaction needs to be uploaded to the L1 public chain for verification. However, for DePIN projects, much of the data does not directly involve asset security. We hope to complete data verification off-chain and only upload important information to the chain when economic incentives need to be distributed.

This can significantly reduce the cost of on-chain operations while ensuring the credibility of device data. W3bStream uses a decentralized verification method that can effectively process data from different devices and convert this data into economic value.

Techub News: IoTeX seems to emphasize the autonomous identity of devices, referring to hardware devices as Sovereign Smart Devices. Can you discuss the role of Sovereign Smart Devices in IoTeX's ecosystem?

Jing: The identity and data of traditional devices are controlled by centralized platforms. In IoTeX's architecture, the identity of devices is created and managed by users themselves. Each device has an on-chain identity controlled by the device owner, independent of any third party.

Devices authenticate and interact on the blockchain through their autonomous identity, forming the foundation of a machine society. They can engage in economic activities like humans, providing services to the community or other devices and earning profits. This model makes devices part of the blockchain economy, achieving the financialization of machines (MachineFi).

Techub News: How does IoTeX attract developers and businesses to participate in its ecosystem? What specific incentive measures do you have?

Jing: One is the modular infrastructure provided by IoTeX, which is rarely provided by other infrastructures in the industry. For example, the Network3 project is transitioning from Web2 to Web3. They have sold 3000 edge computing devices, with over 200,000 nodes. They fully adopt IoTeX's technology stack, including device identity (ioID), cross-chain bridge (Liquidity Hub), and other modules. Through our DePINScan.io, everyone can see where all the nodes are located, their daily profits, and other detailed information. IoTeX provides very transparent data to the ecosystem, and users can calculate the return on investment based on this publicly available data.

The second is that we will help projects with incubation, including some business-related support such as financing support. We have our own grant program and also help connect with other investors and networks.

Techub News: DePIN involves a large amount of data capitalization and data sovereignty issues. How do you view these issues? What guiding role does IoTeX play in this regard?

Jing: The core issue of data capitalization is data ownership and usage rights. We believe that data ownership should belong to the creators of the data, whether individuals or devices. However, traditional data usage models often deprive data creators of their rights, preventing them from benefiting from the economic value of the data.

In IoTeX's ecosystem, data creators can obtain their rightful benefits through device autonomous identity (Sovereign Smart Device) and data verification systems, while the data usage path and value circulation are transparent. This protects data privacy and maximizes the economic value of data.

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