Last week, I spoke with the co-founder and CEO of IoTeX, a decentralized platform that connects real world devices and data to Web 3.0. In this extremely interesting interview, Dr. Raullen Chai explained to me what MachineFi is and how it works and shared the latest IoTeX achievements. If you want to be up-to-date on the new trends, don’t miss this piece!
U.Today: You are the co-founder and CEO at IoTeX. How and when did you first get interested in the crypto field? How did the idea of creating IoTeX appear?
Raullen Chai: That’s a long story. I was doing my PhD at the University of Waterloo from 2008 to 2012. My focus was really on Cryptography: how to design new crypto encryption algorithms and authentication protocols to make sure communication is always authentic and secure. And the Bitcoin Whitepaper actually came out, I think, near the end of 2008 or early in 2009. It was something so bizarre, most of the folks in our research lab thought it was wrong. We spent one or two months trying to attack it, but we failed. Then we realized that it was something amazing. That's when I got into Bitcoin, really early, in those days.
Yeah after I graduated in 2012, Bitcoin is still small, Ethereum still doesn't exist. There is no such thing called the 'crypto industry' or Web 3.0 like now. That's why I joined Google, I stayed there for five years and then I was at Uber for another year. But during these years I’m still watching how blockchain and crypto is growing as an industry.
I was an early participant in the Ethereum ICO. That was, I think, in 2014-ish. I'm an early participant in lots of early projects for Ethereum. I think I always kept my eyes on this area. Then in 2017, I think that the time is ripe. So that's when I left Uber. I had two other co-founders join me and we started IoTeX. That’s all up till now.
U.Today: And how did the idea of creating it appear? Was there a special moment?
Raullen Chai: A special moment? Well it's a bit different. We are watching Bitcoin’s or blockchain’s far future. The far future, because it's essentially a Turing complete self-enforcement. The rule engine drives the economy. At that time, the amount of economy driven was very small, for now it's like a 1 trillion inch, I think with the Web 3.0 economy. But our vision is always how this will drive 100 times more or at least a few times more than the real world economy. There's like a missing layer in-between which we think is a machine network which ties the real world with the blockchain. That's why we came up with the idea for IoTeX.
We want to create a network that drives all the machines in the world in an autonomous way. It sounds a little bit far-fetched now, but that's the ultimate goal.
U.Today: Tell us about IoTeX, what solutions does it provide?
Raullen Chai: Like I said, we do think there will be multiple networks that glue the real world and the crypto world together which help to extract information from the real world to Web 3.0, to feed the fit into those DApps. That's one way.
Another way is essentially allowing people to sit in the web through a program like how the real world works, but no one is actually building those large scale machine networks, except maybe AT&T and those kinds of big corporations. That's why we came up with something like a methodology, what we call MachineFi, that is trying to jump start the large-scale, multi-machine networks in a decentralized way by incentivizing the deployment of machines, financialization, the utility of data from the machines and also enabling the self-involving governance of our machines. That's IoTeX in a nutshell. That's what we do.
With this new methodology we have built a lot in the past four years, like the Layer 1 blockchain done from scratch. Even compatible running by 100 more validators now it processes 40 million transactions worldwide, separated by all the topics chained in the world. That's the Layer 1 we built. And on top of this one we have our computational Oracle which is a layer that interacts with the machines. Primarily, trying to translate what the machine does into some sort of proof that the Layer 1 contract can understand. Machines could be as large as a car or as small as Raspberry Pi, a smart watch, phone, all sorts of things.
U.Today: It's very interesting and I think it's something new. At least I haven't heard of it before. We've all heard of DeFi and GameFi but MachineFi is something new.
Raullen Chai: Well when you think about it, MachineFi is the next wave, right? Because DeFi has been pretty successful. It's easy. 'Easy' means that the life cycle for each DeFi project is relatively short. That means that the iteration is fast. People just try this, it doesn't work and they move onto the next, that's the reason why DeFi has grown so fast in the past few years. MachineFi is relatively slow, because it involves machines and devices in a decentralized way. But definitely the spirit is always the same.
I believe there are two types of applications in the Web 3.0 space that cannot exist without MachineFi methodology. One is some new financial derivatives or a product that is really based on real world information, for example, like weather derivatives, traffic derivatives or geo-credentialing, for example, you can airdrop tokens for people, staying at a specific geo-location. This is one category that I call ‘new financial products’.
Another one we have a heavy bet on is 'do-X-to-earn-type' of apps, meaning you can incentivise people to 'drive-to-earn', based on their driving data. Or 'sleep-to-earn', based on their healthcare data or 'learn-to-earn'. Those are the two categories of DApps that cannot exist without us.
U.Today: Interesting. Can you tell us how the IoTeX token works?
Raullen Chai: Yeah, the IoTeX token is not too different from Ethereum. It's a Layer 1 gas token, for sure. And also delegates have to stake IoTeX to run the nodes to guard the network. It also provides security for the network. And three, it's for governance too, for example, people can stake and vote for how this protocol evolves going forward. And in the future, what we're thinking about is to even have a true stream, which is like the computational Oracle, people have to stake IoTeX to run the true stream node. That's something to come in the future.
Those are some native utilities for the IoTeX token and so, on the side, we do have a few programs that also use the IoTeX token to grow the MachineFi ecosystem. One is this $100 million Sustainable Ecosystem Fund that we announced a few weeks back. This is like a reserved IoTeX for the growing ecosystem. We essentially give a day of grants to developers who are building ‘public-goods-type projects’ on top of IoTeX. They deserve a grant. Also, we have an ecosystem fund to invest into projects that are actually building, long-term, on top of IoTeX. That’s the ecosystem incentive.
Another one on the side is something we call Burn-Drop. If one device gets activated on the IoTeX network a certain portion of IoTeX gets burned and also another portion of IoTeX gets dropped to all the long-term stakeholders. Those are the campaigns or programs which have on the side.
U.Today: The IoTeX blockchain already powers real devices, as I saw on your website. Can you tell us about them?
Raullen Chai: Yeah, for sure. For now, it powers two devices. One is called the Ucam which is something we did in 2019-2020. It's a smart home camera based around privacy. You own your key, a 'your key, your data' type of idea. No one can tap into your home camera to see what is going on. You have the key, you have all the data. This one has been deployed I think to nearly 10k families across 60+ countries, it has been pretty successful. That’s one serious innovation in the world in 2020.
Another one is open source to developer products. It's called Pebble Tracker. It's a GPS tracker with six dimensions of data like humidity, velocity or air pressure. It’s just like a tracker.
We started a kickstarter for the hardware last year and we easily sold two thousand units of this tracker. The goal here is trying to work with one vertical in the MachineFi space. It's a ‘proof of presence’. By having this tracker, you can go to a place, you can prove you have been there and maybe you're eligible for tokens, NFTs or some sort of reward like maybe more yield farming powers in our DeFi protocol. Those are the things we want to do with this proof for geo-location. That's two. And there are definitely quite a few in our pipeline, some smart devices like wearables and open-source hardware, like Raspberry Pi. Those are all in the pipeline for this year.
U.Today: I also noticed that you really have lots of notable achievements in 2021. What was your favorite one? What was the most important one in your opinion?
Raullen Chai: I'm sure different people have different opinions here, right? I believe the fact that the token got listed on Coinbase, that's pretty big to happen in the last year. But to me, I feel like the launch of the MachineFi initiative is even bigger than the Coinbase listing, because we simply started with this wish. But no one was really clear about or knew about how to create this IoTeX blockchain from scratch. MachineFi is such a milestone. I think it's not just me. The entire team, or the entire Web 3.0 community actually, feels the same. That's how we should create the IoTeX blockchain and that's how we incentivize or jumpstart the machine networks to be deployed on this planet.
U.Today: And what are IoTeX's greatest plans for 2022?
Raullen Chai: Definitely for us it's always more MachineFi Dapps, more devices and more users. Actually this year we have quite a few projects that we're incubating right now around these two categories of DApps I was talking about. By the end of this year, we should see at least 10x more devices on IoTeX with 100x more users.
U.Today: Can you tell us about your favorite crypto projects?
Raullen Chai: That's a good one. I like Bitcoin a lot and I like Ethereum a lot to be honest. I think those are the two projects everybody likes, right?
U.Today: Yeah, I guess so.
Raullen Chai: Yeah, everybody likes them. But there are some smaller ones which I also like.
Uniswap, I really like it because it's such a breakthrough. It's bringing the AMM to the world. It basically opens up a new chapter for DeFi. Perhaps you don't know but, before that, a decentralized exchange was just a disaster because everything was based on order-books and because the chain was slow, so it almost didn’t work. But thanks to Uniswap everything works very smoothly right now.
And another one I do like is Tornado. This is a type of privacy protocol. It allows you to have your Ethereum, or other tokens, to mix with other kinds of Ethereum tokens and you can try to gain some sort of privacy. This is a protocol I really like, although it does have some problems.
U.Today: And do you have a crypto portfolio?
Raullen Chai: Yeah, I do. I did a lot of investment, especially before starting IoTeX, when I had more time.
U.Today: And what's in there, if it's not a secret? What's the biggest part?
Raullen Chai: Sure. Like I said, I'm a very long-term holder of Bitcoin and Ethereum. If you look at my wallet, I haven't moved those tokens for many, many years. They are still there. Those are the long-term holding things. Short-term, I think I have some other tokens around like CityDAO, Avalanche. I would like to invest in a protocol, like a Layer 1 protocol or platform protocols. Because for those DeFi games, they usually have a very small life cycle, a very short life cycle. That means you have to watch the token, which can go up next month and maybe die three months after. That's why I tend to invest in something more long-term.
U.Today: I get it. And what will the Bitcoin price be, let's say, in a year from now? It's not a prediction, just your guess.
Raullen Chai: You know, the Bitcoin halving is coming in 2024 if I remember correctly. That means, usually starting one and a half years before the halving, according to my experience, the price will go up. I think we're at that point. I think Bitcoin will perhaps go to 50k or 80k by the end of this year. If it goes even better, 100k could be possible. That's just my guess.