Embracing MachineFi: The Future of Decentralized Machine Finance
MachineFi is an ecosystem built on the IoTeX blockchain that combines real-world IoT, smart terminal devices, and the Web3 on-chain economy.Author: Ray Xiao, IOSG Ventures
Embracing MachineFi: The Future of Decentralized Machine Finance
Is it an old wine in a new bottle or a new generation replacing the old?
Recently, a friend outside my circle mentioned that his wife, who never used to exercise, has been running downstairs on time every day for the past month and even bought virtual shoes worth thousands of dollars to earn a token called GMT. This makes one reflect on how powerful the out-of-circle effect of STPEN is. Of course, aside from its Ponzi economic model and exquisite NFT design, combining exercise, entertainment, and earning effects is undoubtedly a significant reason for its success in breaking out of its niche. After all, it sounds like a lot of fun, doesn't it?
This incident can be seen as the first validation of the possibility of closely binding entertainment in real life with on-chain economics. Move2Earn and Ride2Earn are no longer the dry concepts of IoT + Blockchain from a few years ago, and it gives us more confidence in the future of MachineFi.
(Image source: Twitter @RayXiao11)
What will the future market size of MachineFi look like?
A large number of infrastructure projects in this track emerged in 2018-19. Currently, both Helium and IoTeX are undoubtedly the leading projects in terms of network node coverage, actual business maturity, and company market value.
About 40 IoT & BC projects have issued tokens (see the chart below)
The total FDV in 2022 was $14.9B, with a growth rate of 223%
(Data source: Coinmarketcap, Deloitte
About 70% of the projects in the chart were born in 2018-19, with 25% still active, while the rest are either inactive or nearly invisible. The current growth of the entire track is mainly driven by the tokens of Helium, VeChain, IOST, and IoTeX.
Taking the most active network, Helium, as an example. In June 2021, the network spent $1 million on Data Credits per month (0.0001 USD = 1 byte of data), which means that it helped transmit 9.31GB of data for IoT devices. This is still a drop in the bucket compared to the current global data generated by IoT devices, which is 17.3ZB (1ZB = 100 trillion GB). According to forecasts from Gartner and IDC, by 2025, all IoT devices worldwide will generate 79.4 ZB of data. This indicates that the growth potential in this track is enormous, and everything is just beginning.
(Image source: Messari)
Some Interesting Application Scenarios of MachineFi
Currently, apart from the development of some middleware (including cross-chain bridges, on-chain DID for smart devices, user operation panels, and Oracles with computing capabilities), more than 20 ecological projects have been launched.
(Image source: IOSG Ventures)
MachineFi + GameFi
IoTeX Monster Go: This is a game where players battle monsters on real maps and earn rewards (player positioning is collected via GPS devices, similar to an on-chain version of Pokémon Go). The game also includes monster evolution, upgrades, skill systems, mine competitions, arenas, and more.
(Game interface)
MachineFi + NFTfi
Sumotex: This is a project that puts real estate NFTs on-chain and allows for fractional investment. Investors can not only invest in real properties but also obtain corresponding virtual NFTs in the on-chain Metaverse, while the off-chain verification of property information is completed through IoTeX blockchain technology.
(Sumotex economic system)
MachineFi + Move to Earn/Ride to Earn
MobiFi: This is a project focused on the European Mobility as a Service market. For users engaged in low-carbon travel (e.g., cycling), the system incentivizes them to earn token rewards. Recently, the team has also launched their own NFT shoes, which are expected to become utility NFTs in their ecosystem.
(MobiFi official release of rare NFT shoes)
Why do we support the MachineFi team?
(Comparison of IoT blockchain infrastructure)
A Better Timing
Compared to the nearly barren on-chain world five years ago, Web3 is gradually transforming from a story into reality, with various on-chain application scenarios emerging in finance, gaming, digital entertainment, and social interactions. The data and economy on-chain are experiencing explosive growth. Many have long doubted the story of IoT + Blockchain, but we believe that now is a great time to make more use cases meaningful—connecting various IoT devices and smart devices in the real world to Web3 through the MachineFi gateway.
A Team Committed to Cultivation
The team behind MachineFi (also the core team of IoTeX) has consistently maintained a steady pace in technology development and business promotion amidst various doubts and market noise over the past few years. Currently, in terms of network effects, business coverage, and community activity, they are one of the few leading teams in this track. Last month, they just officially announced a partnership with Google Cloud, and more significant collaboration news will be released soon.
Long-term Optimism for MachineFi Connecting Real and On-chain Needs
Through the analysis of the STEPN case, we know that although its success has a certain element of chance, it also indirectly proves that on-chain token tools have a low-cost, high-efficiency driving effect on a portion of applications in the real world (especially those related to entertainment). This is why we believe that MachineFi, as a blockchain gateway, is currently connecting meaningful scenarios in gaming, entertainment, health, and more.
