IoTeX 2.0: DePIN for Everyone
TLDR;
- IoTeX has launched IoTeX 2.0 as a modular infrastructure project for DePIN, aimed at fostering the development of DePIN projects.
- From a tokenomics perspective, IoTeX 2.0 explores various uses for staked IOTX tokens, integrating newly onboarded ecosystem participants into a reward system and expanding the already mature IoTeX token ecosystem.
- Given the high development barriers, the DePIN sector is expected to grow through infrastructure projects like IoTeX incubating initial projects and creating use cases.
- DePIN: Modular Infrastructure by IoTeX
One of the most anticipated keywords in the crypto scene for 2024 is DePIN (Decentralized Physical Infrastructure Network). DePIN is closely related to the mainstreaming of blockchain and offers diverse applications, from wireless networks to rings for healthcare data collection, representing efforts to innovate physical world data infrastructures that interface with everyday life.
The recent move by Chrome to discontinue support for third-party cookies for targeted advertising and Apple’s limitations on user data collection for robust privacy are signs of companies adapting to strong consumer demands for data privacy. However, these restrictions on data collection slow down the advancement of generative AI, with some analyses suggesting that Apple’s privacy policies could be a disadvantage in the AI race.
DePIN, which balances the interests between users unwilling to provide personal data and companies needing it, offers a solution, with IoTeX providing IoT-centric infrastructure within this ecosystem.
1.1 Overview of IoTeX’s Vision and Approach to Democratizing Physical Infrastructure Space
1.1.1 Why DePIN for IoTeX?
DePIN can continuously collect massive data under an economic incentive system. It returns data and device ownership to users and ensures network contributors are fairly compensated. Thus, IoTeX believes DePIN can replace centralized infrastructure systems and build infrastructure in a decentralized manner, including that decentralized blockchain systems could create new opportunities in various industries.
1.1.2 IoTeX’s Vision
Consumers are increasingly aware that companies have been generating substantial revenue from their data. However, AI models require even more extensive data for future development. IoTeX aims to solve this by allowing users to retain sovereignty over their data while providing it to a decentralized network, thereby receiving economic incentives. DePIN’s purpose is to create a fair and transparent ecosystem where users can coexist by returning economic incentives to them.
Through more efficient systems for data collection and processing, IoTeX envisions contributing to the implementation of superintelligent AI, particularly by collecting vast amounts of real-time data and processing it in a verifiable manner, which is considered the highest form of intelligence for the future.
2. IoTeX 2.0:
Given the potential future impact of DePIN, coupled with physical devices, the DePIN sector requires significant development efforts. Challenges include verifying data collected through physical devices and manufacturing and distributing these devices to replace existing infrastructures. A tokenomics structure suitable for DePIN must also be designed to ensure that data providers receive sufficient and continuous incentives.
Thus, IoTeX 2.0 is a platform that significantly reduces the time, initial costs, and resources needed for complex DePIN application development. By providing modular infrastructure, it supports developers in more easily launching projects, particularly through the following features explained in below.
2.1 Modular Security Pool (MSP)
The MSP enables DePIN projects to maintain their data sovereignty while building their own Layer 2 ecosystems. It restakes the Proof of Stake (PoS) security from IoTeX L1 to the DePIN Infrastructure Modules (DIMs), reducing the initial liquidity burden and maintaining security and stability while lowering initial capital costs.
2.2 Decentralized Infrastructure Modules (DIMs)
DIMs break down complex systems into smaller, more accessible components, including everything from information indexing to wallets. IoTeX has onboarded various projects to the DIMs ecosystem, enabling more straightforward and cost-effective development and quicker deployment of DePIN applications.
2.3 New IOTX Tokenomics
IoTeX 2.0 introduces additional utilities for the IOTX token, which has been serving as the ecosystem token since the launch of the IoTeX L1 mainnet in 2019. The initial allocation of IOTX staking rewards has almost been distributed, and the new tokenomics improve incentives for ecosystem participants to stake IOTX longer-term.
As the mainnet has been deployed for a long time, IoTeX 2.0 seeks to expand the IOTX token ecosystem through the expansion of modular infrastructure. The role of IOTX within IoTeX 2.0 has expanded as follows:
- Incentive: Inflation staking award, Balancing deflation through token burns from platform usage, and providing incentives for dApps being built in the DePIN ecosystem and Layer 2s created through modular infrastructure to utilize IoTeX modular infrastructure.
- Token Ecosystem Stability: Connected with W3bstream, ioID, ioDDK, and other DIMs, IOTX provides new utility and value to the tokens while maintaining the balance between inflation and deflation mechanisms to ensure a stable token supply.
- Currency: IOTX acts as the currency for the expanded IoTeX 2.0 network.
In IoTeX 2.0, various ecosystem stakeholders are involved, including L1, the Modular Security Pool (MSP), DePIN Infrastructure Modules (DIM), as well as DePIN dApps and L2. Therefore, it is crucial to design the roles each stakeholder plays within the tokenomics and the rewards they receive, as this ensures a balanced supply and demand, making sustainable ecosystem. Rewards for each ecosystem contributor are as follows:
- IoTeX L1: Delegates stake IOTX to verify transactions and participate in consensus, receiving IOTX tokens as rewards for their services. Users also stake IOTX to select Delegates and receive IOTX rewards. Besides participating in governance, IOTX serves as the currency for the IoTeX ecosystem and is also used for paying gas fees.
- Modular Security Pool (MSP): IoTeX 2.0 allows users to re-stake staked IOTX into the MSP, thus extending the security of the IoTeX L1 blockchain to the DIMs integrated into IoTeX 2.0. Using the MSP, DIM builders can provide incentives for IOTX stakers to deposit their restaked IOTX. This re-staking is supported natively by the chain.
- DePIN Infrastructure Module (DIM): To understand through an example, one of IoTeX 2.0’s partners, Filecoin, which provides storage, must stake IOTX to participate in IoTeX as a DIM. Subsequently, dApps building on the IoTeX chain are rewarded with their own tokens.
- From the perspective of DePIN Dapps and DePIN L2: Dapps and L2s being built on IoTeX use IOTX as the ecosystem currency. However, because various partners of IoTeX participate as DIMs, fees for connected services such as data storage or off-chain computing are paid in the tokens of the DIM projects.
3. Team
Since 2017, the IoTeX team has been proactively building the ecosystem, recognizing the potential of the DePIN sector and accelerating various projects as a Layer 1 solution for DePIN.
3.1 Investors
Recently, IoTeX secured $50M in investment from Web3 ecosystem VCs, including SNZ Capital, Foresight Ventures, FutureMoneyGroup, and Borderless Capital. This funding round aims to develop platforms acting as DePIN project infrastructures with long-term staking of the native token, $IOTX.
3.2 Partner
IoTeX collaborates with various partners to expand the ecosystem, including NEAR for data availability, Filecoin for decentralized data storage, RISC Zero for secure zero-knowledge computing, and Espresso for simplified sequencing, among others such as ChainML, OKX, Axelar, The Graph, Streamr, and Irys.
4. The Future of IoTeX and DePIN
While blockchain and network rewards currently represent only a portion of the DePIN sector, which is dominated by off-chain computing and data verification, and AI utilization, We hope that within the next five years, DePIN can become an infrastructure that can be used in real-world. The 2010s saw platform businesses grow significantly based on customer data, and customers are now realizing they have been feeding these platforms with their data.
The biggest barrier to DePIN adoption is that customers are already feeling comfortable from services optimized with their data, thus having little incentive to switch to the inconvenient DePIN infrastructure. However, if projects can create successful cases on a large scale, this problem could be resolved.
IoTeX stands as a significant infrastructure in the DePIN ecosystem, having partnered with or invested in most of the projects that became a topic of discussion with the rise of DePIN in the first half of 2024. However, IoTeX has been working to decentralize infrastructure and data long before then. As smart contracts and tokenomics are integral parts of DePIN projects, sectors like IoTeX are expected to grow by proactively building infrastructure for various projects and incubating them. IoTeX is moving forward as a modular infrastructure in the early market of emerging DePIN projects, and it’s exciting to see what first cases IoTeX and its incubated projects will create.
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