In-depth Analysis of IoTeX: New Infrastructure for the Internet of Things under the DePIN Narrative
IoTeX, as a rising star in the DePIN track, is expected to leverage DePIN by providing underlying infrastructure.Written by: FMResearch
Introduction
Integrating with the real world has been the direction of blockchain applications' efforts. This year, against the backdrop of a strong dollar, RWA has opened up channels between traditional finance and crypto finance, becoming one of the few outstanding sectors in the bear market. DePIN, as a branch of RWA, has recently gained attention. DePIN stands for Decentralized Physical Infrastructure Networks. Messari defined this new concept in its DePIN research report released in 2022, stating that DePIN is "one of the most important areas for crypto investment in the next decade."
Just as RWA is not a new concept, being a product of the adaptation of DeFi development to the external world, DePIN is also not new. Since the birth of Ethereum, many projects have attempted to decentralize infrastructure such as energy, storage, and computing. Projects like Filecoin and Helium have already achieved certain successes.
At the recent Hong Kong FinTech Week, DePIN became the focus of the Web3 industry, with the combination of Web3 and physical infrastructure being seen as the next big opportunity. Techub News stated, "DePIN is the biggest narrative in Hong Kong's Web3."
FutureMoney has always placed great importance on research in the DePIN sector. This article will mainly introduce the representative project of DePIN, IoTeX. IoTeX embodies both DePIN and IoT concepts. It is a next-generation blockchain platform oriented towards IoT (Internet of Things), featuring its own characteristics in scalability, deep privacy protection, and independence, dedicated to providing comprehensive support for IoT applications and building blockchain ecosystems.
Market Space of DePIN
Currently, well-known DePIN projects are mainly concentrated in the storage and communication fields. In fact, DePIN has application potential in industries such as energy, computing, IoT, and supply chain. For example, the decentralized energy asset network React uses decentralized Web3 technology to save energy and improve grid efficiency. It allows participants to connect their home batteries to the Web3 energy storage network, where connected businesses and individuals can receive cash and token incentives. The decentralized GPU platform Render Network can provide rendering capabilities for large video production, 3D modeling, and film special effects projects, offering different token incentives based on the rendering speed of GPUs at different levels.
Traditional physical infrastructure construction is characterized by capital intensity, long investment cycles, and low returns. Utilizing blockchain's token incentive mechanism to unlock the potential of decentralized hardware can effectively address this pain point. The core of the DePIN model lies in using token incentives and the flywheel effect to connect dispersed demand and idle physical resources, meeting needs at lower costs and higher efficiency.
According to the DePIN public data platform DePINscan created by IoTeX, there are currently 370,000 devices connected to Web3. Although this growth is rapid, it only represents a tiny fraction of the physical world.
IoTeX: Providing Full-Stack Solutions for DePIN Applications
IoTeX was founded in 2017 and has been committed to the integration of physical devices (and their data) with blockchain technology since its inception. IoTeX ensures that individuals can own and control their devices, data, and the value they generate, allowing builders and users to become owners and beneficiaries of the trillion-dollar IoT economy. Based on its contributions to IoT, IoTeX was selected as a co-chair of the Industrial Internet Consortium (IIC) Blockchain Working Group alongside Amazon and Huawei.
IoTeX has built an EVM-compatible Layer 1 blockchain specifically designed for IoT data and DePIN applications. By providing DePIN middleware W3bstream, it connects DePIN physical devices and data to Layer 1. Any DePIN application can create its own dAPP on W3bstream with one click, including hardware components, off-chain logic programs, and on-chain logic/token economics, incentivizing the flow of real-world data and generating token rewards for users.
IoTeX's full-stack DePIN solution provides a complete set of "plug-and-play" products and tools for blockchain-driven IoT applications. Building DePIN applications on the IoTeX platform requires focusing solely on business logic. Its full-stack DePIN infrastructure is divided into four layers from top to bottom:
Hardware Layer: MachineFi is a hardware portal platform where developers and users can register devices, obtain visualized data, and interact with MachineFi dApps.
Middleware: W3bstream is a middleware that connects smart devices to smart contracts, generating proofs for on-chain dApps.
Tool Layer: IoTeX provides a range of tools to help applications achieve data interaction and value flow, such as ioScan, a blockchain explorer for querying blockchain data, and ioTube, a cross-chain bridge for facilitating bi-directional token exchanges between IoTeX, Ethereum, BNB Chain, and other top L1s.
Blockchain: IoTeX Blockchain is an EVM-compatible L1 designed specifically for IoT data.
IoTeX Development History and Real-World Applications
IoTeX Development History
IoTeX was founded in 2017 and raised approximately $30 million from top venture capital firms in early 2018 to begin building its Layer 1 blockchain. That year, it launched its L1 testnet and subsequently listed its token on Binance, Kucoin, and Gate.
In 2019, IoTeX developed a PoS-based EVM public chain and incubated many DeFi and NFT projects, with over 100 ecosystem applications. Products include ioPay, staking portal, and IoTeXScan.
In 2020, it began its first IoT + blockchain vertical experiment: Ucam, which won a CES award and achieved over 20,000 sales on Amazon. In 2021, it launched its second IoT + blockchain vertical experiment: Pebble, achieving over 1,000 sales within two weeks. At the same time, through two social experiments, the concept of "MachineFi" was introduced, which is now defined as DEPIN in the industry.
In 2022, it began working on the W3bStream project and collaborated with DePIN project parties to provide infrastructure support. The team hopes that W3bStream will become the standard for the entire industry in the future. In May and June of that year, MachineFi Lab completed two rounds of financing totaling $60 million. In 2023, IoTeX clearly proposed the strategic development plan of "DePIN First," focusing on improving the inadequate infrastructure in the DePIN ecosystem and launched the W3bStream project, actively participating in DePIN and collaborating with various projects in the ecosystem to promote the development of the entire ecosystem.
IoTeX Application Cases
With the rapid development of IoT, the number of connected devices and the data generated are growing exponentially. However, the IoT industry also faces several challenges: various sensing and executing devices often come from different companies, lacking effective coordination, leading to low utilization rates; the massive data streams generated by devices and sensors are fragmented, making it difficult to share, and the value of data is hard to activate.
The root of these problems lies in the lack of a digital representation and effective circulation mechanism for devices and data in the physical world. Therefore, there is an urgent need for a set of IoT economic infrastructure to solve the problems of device fragmentation and data isolation, achieving digital management and circulation of assets. IoTeX's solution supports various IoT ecosystems, shared economies, smart homes, autonomous driving, supply chains, and other types of developers to build their own DePIN applications.
IoTeX has built the entire blockchain and IoT middleware from scratch and launched multiple blockchain-driven IoT products.
Some successful products supported by IoTeX:
Ucam: Ucam is the world's first home security camera developed in collaboration with Tenvis, utilizing decentralized identity to provide users with privacy and data ownership. Tenvis is a hardware giant and currently a selected brand of cameras on Amazon.
Pebble Tracker: Pebble Tracker is a decentralized asset tracking device developed in collaboration with Nordic Semiconductor, one of the world's largest chip manufacturers. Used in conjunction with Edge Oracle, Pebble Tracker writes verifiable real IoT data (such as location, movement, climate) to the blockchain for use in smart contracts and is now listed on Mouser Electronics.
DIMO: DIMO is a DePIN mobility project focused on collecting car data, analyzing data, and providing value-added services to car owners. In April 2023, DIMO announced it would integrate IoTeX's blockchain IoT middleware W3bstream, connecting data from connected vehicles to smart contracts, helping Web3 developers easily access zero-party mobile data, supporting the incubation of revolutionary mobile mobility Dapps, allowing consumers and fleet operators to truly own and control the data generated by their vehicles.
Plans that IoTeX is involved in include:
Automotive and Supply Chain Pilot: Collaborating with MOBI, the U.S. Navy, and the Industrial Internet Consortium (IIC) using Pebble Tracker technology.
Blockchain Standards: Developing within IEEE and the Confidential Computing Consortium (CCC).
Token Economics
In June 2022, the IoTeX mainnet and its native token $IOTX were officially launched. IOTX is the native utility token of the IoTeX blockchain network (IoTeX L1 + IoTeX W3bstream). It serves multiple functions within the IoTeX ecosystem, including gas fees, certifying real-world devices, network governance, and staking services. IOTX has been listed on major cryptocurrency exchanges, including Coinbase, Binance, Gemini, Upbit, Kucoin, and Crypto.com.
Token Basic Information
Token Supply Information
Total Issuance: 9,442,702,397
Total Circulation: 9,442,702,392 (as of now)
Private Sale Price: 1 IOTX = 0.0000125 ETH (≈$0.0083)
Public Sale Price: No public sale
Initial Token Allocation and Release Plan
The initial token allocation is roughly divided into five parts: IoTeX Foundation (25%), private sale (24%), community reward program (6%), ecosystem (30%, including Ecosystem Development and Roll-DPoS Mining), and team (15%). These tokens will gradually unlock over three years after launch and be fully released by the end of 2022.
Token Use Cases
Bitcoin's proof of work is an early form of DePIN verification. It utilizes a large amount of computing power to ensure security, with every node in the global Bitcoin network participating in verification. Today, DePIN verification adopts a similar concept, where participants can leverage the services of the infrastructure they own to utilize the network, generating fees and rewards.
IoTeX, by providing middleware and hardware, becomes a modular facility provider for DePIN. All DePIN projects built on IoTeX will be participants in the IOTX token economy.
IOTX has multiple use cases, aiming to achieve trusted and transparent interactions among various entities in the IoTeX network (including representatives, stakeholders, product builders, service providers, and consumers). The main uses include:
Gas Fees: IOTX is used to pay for transaction/contract fees on the IoTeX network.
Staking Governance: Staking tokens participate in voting governance.
Staking Services
- Device Registration: Register trusted devices through staking or burning.
Token Economic Model
Burn - Drop
When the number of devices supported by IoTeX reaches the first one million, a total of 1 billion IOTX (10% of the total supply) will be burned and dropped, with 900 million directly destroyed and 100 million distributed (for example, to voters who automatically subscribe for ≥ 91 days).
This process will be driven by smart contracts, automatically executing a new "Burn-Drop" plan whenever a new batch of devices reaches a milestone quantity.
Burn-to-Certify
After the Burn-Drop phase is completed, the Burn-to-Certify mechanism will be activated. Device manufacturers can obtain "Powered by IoTeX (PBI)" certificates by burning IOTX, with PBI devices earning token rewards monthly, sourced from transaction fees paid by other devices.
IoTeX Team and Financing Situation
Team Introduction
IoTeX is headquartered in Silicon Valley, with a team of over 30 top engineers and scientists from Uber, Google, Intel, Facebook, and other leading tech companies. Currently, the platform is maintained by over 60 global representatives, including Blockfolio, CoinGecko, and DraperDragon.
Founding Members
Raullen Chai: Co-founder and CEO of IoTeX, Ph.D. in Computer Science from the University of Waterloo. Former head of crypto R&D at Uber and technical director at Google.
Qevan Guo: Co-founder of IoTeX, Ph.D. in Machine Learning and Computer Vision from the National University of Singapore. Former product lead at Facebook.
Xinxin Fan: Co-founder of IoTeX, Ph.D. in Cryptography from the University of Waterloo. Former senior research scientist at Bosch.
Jing Sun: Co-founder of IoTeX, former managing partner at Silicon Valley venture capital firm Sparkland Capital.
Key Advisors
Robert Parker: Former CTO of Samsung SmartThings, founding director of Amazon Alexa, general manager at Microsoft, award-winning leader in the IoT industry.
Daniel Mason: Co-founder of Spring Labs (a leading data exchange platform in the financial industry).
Ken Seiff: Managing partner at Blockchange Ventures.
Anoop Nannra: Global Blockchain Leader at AWS, co-chair of the IICDLT working group, former global blockchain head at Cisco.
Michael (Minsik) Cho: Board member of Upbit and Kakao Corp, founding member of KPMG Korea.
Robert Wolff: Chief Developer Advocate at Arm, KOL in blockchain and IoT.
A.D: Chief Developer Mentor at Google
- Mitch Tseng: Chair of the Testbed Committee and Innovation Working Group of the Industrial Internet Consortium (IIC).
Investors
Current investors: Samsung NEXT, Draper, GoodWater, Jump, Wintermute, EV3, Hashkey, Blockchange, IOSG, Hanwha, Wemade, NGC, Hashed, Kenetic, Xoogler.
Financing Situation
In early 2018, top venture capital firms raised approximately $30 million.
In May 2022, MachineFi Lab completed a $10 million seed round financing at a valuation of $100 million.
In June 2022, MachineFi Lab continued to lead and completed a $50 million Series A financing.
Conclusion
The distributed and immutable characteristics of blockchain technology, combined with the connectivity and data exchange capabilities of IoT, offer tremendous potential for creating revolutionary IoT projects. Currently, the vast majority of IoT devices operate in a centralized manner, which contradicts their decentralized nature. This has led to numerous issues, such as limited scalability, high operational costs, frequent privacy concerns, prominent security risks, and a lack of usable value. Blockchain, with its inherent decentralized characteristics, can effectively address the problems currently faced by IoT.
However, the opportunities brought by blockchain do not mean that any blockchain is suitable for IoT applications. In fact, due to various challenges, no existing public blockchain can be applied to IoT. The IOTA blockchain, born specifically for IoT in 2015, gained market attention upon its release, briefly reaching a market cap of fourth place. IOTA encompassed the most attractive concepts at the time—IoT application scenarios, a new type of DAG (Directed Acyclic Graph) block structure, and low transaction fees for small settlements. The technological innovations and futuristic scenarios of IOTA were highly appealing, but due to immature technology and incentive mechanisms, its development subsequently stagnated.
Today, after years of development, both blockchain technology and the scale of IoT devices and data have significantly improved. DePIN, as a bridge connecting physical world devices and Web3, has a more solid foundation today. IoTeX, as a rising star in the DePIN sector, is expected to leverage DePIN by providing underlying infrastructure. Founded in 2017, IoTeX has a top-notch team and technology, having experienced two cycles of dormancy, with significant progress in research and practical applications, demonstrating its determination and strength in this field. Future Money will continue to follow and research IoTeX and the DePIN sector.
