The decentralized world of blockchain and the Internet of Things (IoT) presents a bright vision of a future where security, transparency, and automation become new standards. This new world not only improves existing technologies but also creates new ways for interaction and communication between people and devices. DePIN, or Decentralized Physical Infrastructure Networks, is the integration of the Internet of Things and blockchain. In this article, we will introduce peaq, a layer-one blockchain network focused on realizing the integration of IoT and blockchain, centered on DePIN.
Table of Contents
In recent years, the world of technology has witnessed unprecedented transformations, with blockchain and IoT emerging as pioneers of this revolution. The combination of these two powerful technologies has created a new world of possibilities and opportunities for industries and individuals alike.
Blockchain, as a decentralized and distributed ledger, ensures trust and transparency in transactions and exchanges. Through smart contracts, blockchain can automate complex processes without the need for traditional intermediaries. These features make blockchain one of the fundamental pillars of the digital future.
The Internet of Things is a network of internet-connected devices that collect and exchange data, enabling communication and interaction between objects. From smart home devices to advanced industrial systems, IoT is transforming how we live and work.
The integration of blockchain and IoT leads to decentralized and secure networks of connected devices where data is managed securely and transparently. This combination brings new opportunities for innovation and improving human life, from smart supply chains to smart homes.
The emergence of Decentralized Physical Infrastructure Networks (DePIN) as a fusion of blockchain and IoT has created new horizons for automation, transparency, and security in the world of technology. These technologies not only enhance the efficiency of existing systems but also pave the way for advanced interactions between devices and individuals. As a layer-one blockchain network, peaq is taking steps toward realizing this vision.
A Revolution in Global Infrastructure
What is peaq?
peaq was founded by three entrepreneurs: Till Wendler, Leonard Dorlochter, and Max Thake, who shared a common passion for blockchain and IoT. Till, an entrepreneur from Germany, discovered blockchain through Ethereum in 2015 and fell deep into the world of crypto.
Leonard, another co-founder from Germany, met Max, an entrepreneur from Malta, while working at a software company in Berlin. The three came together in 2017 with the goal of leveraging blockchain to tackle global challenges. Initially, they explored ways to effectively integrate Web3 and IoT, but soon realized that the existing infrastructure could not support IoT as they had envisioned.
They studied the implications of blockchain integration into traditional systems and collaborated with major companies like Audi, DMG Mori, NTT, and Gucci to develop enterprise IoT applications and understand the impact of technology on the current landscape. This experience led them to build a layer-one blockchain to support distinctive applications.
By 2021, peaq was established as their solution for building real-world applications, now known as Decentralized Physical Infrastructure Networks (DePIN). In March 2024, peaq announced that it had raised $15 million from leading investors, including Animoca Brands, Borderless Capital, Generative Ventures, Cypher Capital, CMCC, Fundamental Labs, HV Capital, Hashkey Capital, GSR Investments, MoonRock Capital, and others.
Technology
Consensus Mechanism
peaq employs Delegated Proof of Stake (DPoS) for block production and initial finalization, and Nominated Proof of Stake (NPoS) through the Relay Chain for verification and second finalization.
Node Operators
Block production in peaq relies on collators and delegators working together to ensure transactions are efficiently processed and censorship-resistant.
Collators are responsible for generating blocks and maintaining network status. Their role is similar to miners in a Proof of Work (PoW) network, but they do not enhance network security. Instead, they generate proofs of the current network state based on the Polkadot Relay Chain and run a full node on both the relay chain and parachain for their dependent functions.
Delegators ensure that blocks produced by collators are finalized on the Relay Chain. They also filter collators by staking tokens on trusted ones to ensure their honesty and reliability. Due to the validation security architecture, dishonest collators cannot finalize invalid blocks. While they could potentially slow down or temporarily halt the network, as long as at least one honest collator exists, the parachain remains secure and operational.
Collators and delegators collectively receive 30% of the total network rewards, which includes new block rewards and transaction fees paid by network users.
peaq Pay: The Payment System
peaq Pay facilitates machine-to-machine and machine-to-user payments. To ensure proof of funds from a specific wallet, peaq uses the following methods:
- Creating a multi-signature wallet, where the user deposits sufficient funds to cover service fees.
- Funding the multi-signature wallet using the sender’s existing wallet.
- Confirming reimbursements and spent transactions after finalizing costs.
peaq Verify: The Authentication System
Data exchange and validation are crucial for any DePIN, and peaq Verify ensures this process. It is essential to confirm that each data point relates to a live physical infrastructure component broadcasting accurate data.
Three levels of authentication:
Machine-Origin Authentication (Level 1):
Directly verifies data from devices using an SDK or documented functions. Identifies devices and digitally signs data with a private key to ensure validity before broadcasting to the network. This is the most reliable method, as data originates directly from devices.
Pattern Matching Validation (Level 2):
Verifies data that does not come directly from devices but relates to existing network devices. Compares data patterns with those of existing devices in the network. Similar patterns indicate valid data, but this method is less reliable than Level 1.
Oracle-Based Authentication (Level 3):
Relies on oracles to verify data legitimacy. Adds an extra layer of security but may have vulnerabilities due to oracle risks.
AI Agents in Peaq
AI agents such as Nevermined, Autonolas, and Fetch.ai can be deployed in peaq. Developers can use these micro-agents to automate tasks and optimize efficiency in the Economy of Things (EoT).
Interoperability
One of Peaq’s key values is its inherent ability to communicate with various chains and ecosystems. Peaq integrates with multi-chain networks to expand access and capabilities within its ecosystem. Peaq’s interoperability with major Layer 1 blockchains is described below:
Polkadot:
Every DePIN and application on Peaq can natively interact with the Polkadot ecosystem through cross-chain messaging (XCM). This protocol enables cross-consensus interactions and complex integrations between Polkadot and its parachains.
Ethereum:
Peaq is fully compatible with Ethereum’s EVM engine, allowing protocols to leverage opportunities offered by the Ethereum ecosystem. Any EVM-compatible code can be reused in Peaq without modification. Peaq is also connected to Ethereum through multiple established bridges.
Cosmos:
Peaq can exchange data and establish cross-chain identities in Cosmos using smart agents in Fetch.AI. This cross-connection is facilitated by a decentralized address book in Peaq that links different standards across networks to enable interoperability.
Binance Network:
Peaq’s multi-chain machine IDs are natively compatible with Binance’s BNB Chain, allowing Peaq to communicate and exchange data with projects running on BNB Chain.
Solana:
Peaq’s multi-chain machine IDs enable seamless interaction with Solana-based applications. Projects built on Solana can leverage Peaq to enhance their performance and increase network activity within Peaq.
Tokenomics
Token Functionality
The native Peaq token is not yet available for public purchase on exchanges. However, its architecture, commitment mechanisms, utility, and initial distribution have already been established.
The Peaq token will serve various purposes within the ecosystem, including:
- Ensuring network security and generating reliable blocks by rewarding collectors and delegates through staking.
- Serving as a payment method for transaction fees.
- Granting token holders governance rights over future decisions.
Peaq envisions its token eventually acting as machine reputation proof for physical infrastructure.
Machine owners can stake Peaq tokens on machines and devices to ensure their quality and reliability within the ecosystem. These tokens will act as a supplementary Proof of Reputation (PoR) alongside the overall performance record of the device. If a machine fails to perform its intended function, its stake will be reduced due to lack of reliability.
Peaq’s supply model is designed to support long-term growth and address the evolving demands of the ecosystem. Peaq operates under a deflationary economic model. The initial inflation rate is set at 3.5% to provide sufficient incentives for early adopters. This rate will decrease by 10% annually until it stabilizes at 1%. The goal is to achieve a balance where the inflation rate aligns with network transaction growth.
Network Utilization
As of June 2024, the Peaq ecosystem includes: Over 850,000 machines, vehicles, robots, and other devices. Over $25 million in real-world assets (RWA) under management. Hosting over 30 unique DePIN projects. A community of 150,000+ members, known as Peaqonauts.
Peaq’s key performance indicators (KPIs) are designed to scale alongside increased adoption and usage. Its flexible and adaptable architecture meets the evolving needs of developers and users. The main factors that make Peaq attractive for DePIN projects include:
Decentralization: Peaq inherits Polkadot’s relay chain security, which has a reported Nakamoto Coefficient of 136.
Scalability: The network currently processes 10,000 transactions per second (TPS) and is expected to exceed 100,000 TPS by 2025.
Speed & Cost: Each transaction costs $0.00025, making the network fast and cost-efficient.
Ecosystem
Various projects are already using Peaq’s technology stack to build their DePINs. Most DePINs structure their incentives based on a general framework called the DePIN Flywheel. This model outlines a logical cycle that enables DePINs to scale efficiently. It creates a positive feedback loop, where each network participant is incentivized to contribute through unique token rewards, ultimately leading to more devices being deployed in the network.
Some notable projects designed with Peaq include:
Silencio:
A DePIN project with over 300,000 smartphones acting as noise pollution sensors. Anyone with a smartphone can join the network and provide data via a mobile app, available on Google Play and App Store. Silencio uses Peaq to combat noise pollution by creating a network of connected devices that collect noise pollution data to address related crises.
XMAQUINA:
An innovative DePIN protocol that tokenizes revenue from value-generating robots. Its first live demonstration was showcased at TOKEN2049, featuring robots serving coffee and ice cream while enabling people to benefit from autonomous machine labor.
MapMetrics:
Originally built on Solana, MapMetrics has fully migrated to Peaq and plans to eventually launch its token on the network.
MapMetrics uses Peaq’s multi-chain IDs to deploy unique functionalities in its applications. It operates similarly to Google Maps, but is community-driven. It consists of a network of individuals contributing to mapping system development.
Users who share their data earn MMAP tokens. The protocol generates revenue through in-app ads, Web3 APIs, anonymous data sales, and partnerships. Revenue is shared with the community, and the protocol repurchases tokens through a buyback program, distributing earnings among network participants.
Initial Launch
Over the past two years, Peaq raised $20 million for its token launch on CoinList. The launch was highly successful and well-received by the community. These funds will be used to support new community-driven initiatives to promote the adoption of Peaq and DePINs in general.
Grants & Funding
The Peaq Foundation has established a grant program to encourage entrepreneurs to build applications on Peaq by providing financial resources and ecosystem growth support. These grants are backed by top investors, including Cypher Capital, Fundamental Labs, GravityX Capital, HashKey Capital, Mulana Capital, and Waterdrip Capital. In the future, Peaq token holders will decide who receives these grants. Recently, Peaq launched a modular grant program, which is now being developed. This program aims to provide tailored support for DePINs, ranging from marketing assistance to investor introductions and networking opportunities.
DePIN Accelerator
In collaboration with Outlier Ventures, Peaq hosts a DePIN Base Camp, a 12-week accelerator program designed to equip DePIN projects with the tools needed for success. The program includes mentorship, advisory sessions, and networking opportunities.
Enterprise Integrations
Peaq also partners with enterprises to integrate blockchain into existing systems. One notable collaboration is with Bosch and Fetch.AI. This project led to the creation of a smart device combining Web3 and AI capabilities. Bosch’s XDK110 rapid prototyping kit generates real-world data on external conditions like weather, humidity, and noise pollution. Equipped with eight different sensors, the device enables users to collect and monetize data generated by smart devices.
This technology leverages Peaq ID, particularly Decentralized Identifiers (DIDs), enabling devices to store data on Peaq and share it with other DePINs, ultimately leading to monetary rewards for ecosystem contributions.
Final Thoughts
Peaq aims to serve as a people-powered, decentralized network that supports the transition from centralized systems to a decentralized world, encompassing communities, individuals, machines, and interconnected entities.
Peaq’s focus on interoperability, scalability, security, and decentralization makes it an ideal choice for DePIN projects looking to leverage autonomous systems through collaborative independent entities. The new Peaq token (PEAQ) is now available for purchase on 12 major exchanges, including CoinList, Gate.io, Swyftx, and KuCoin.
