June 1, 2022
We are currently experiencing a powerful and inevitable shift towards an economy increasingly dominated by machines, automation, and technology. In the 1940s, acid iron-making technology led the mechanical age and greatly improved social productivity at that time. Today, the scope of machinery and equipment has been greatly expanded, covering not only the original large industrial facilities such as steel machinery but also various forms of information infrastructure such as computers in the digital economy. Machines provide value in various forms from tangible products to intangible assets, with asset value types constantly expanding. At the same time, new economic models based on information are emerging.
The decentralized machine economy is built on the foundation of blockchain's openness and transparency. It uses the information, functions, and intelligence generated by machine equipment as transaction targets and adopts a token-based payment and profit distribution method to eliminate the need for trust and intermediaries. In the machine economy system, various tangible facilities can provide services based on their functions and charge fees to function recipients while providing profits to machine owners. At present, the Web3.0 economy mainly uses capital flow and personal social behavior as its main application scenarios, such as DeFi, GameFi, DAO, etc. Turning to the physical economy level, machines have created great economic and utilitarian value for human society, from factories and workshops to street lamps and intelligent mobile phones. But there are few projects and economic models based on machines in the Web3.0 market.
Can the Web3.0 economy revolutionize the economic paradigm of machines as its core? The answer is yes. Web3.0 for machines has long been familiar and widely used by us. Decentralized ledger technology based on BTC and ETH is a decentralized machine economic paradigm for mining node machines, including decentralized storage solutions such as Filecoin and Arweave. Looking to the future, blockchain solutions focused on specific device application tracks, such as Helium and Arweave, will continue to emerge. As machines continue to advance in data and AI capabilities, more devices will be able to adopt blockchain technology, separate usage rights and ownership models, and form a brand new machine economy built on a decentralized ecosystem.
NGC Ventures is looking at the huge potential for the machine intelligence market in the Web3.0 economy. We hope that blockchain technology can be applied between digital device providers and users, establishing bilateral trust and completing profit settlement through decentralized ledgers and privacy computing schemes under non-trusted conditions. In the short to medium term, NGC Ventures believes that various independently operated electronic devices are the first potential targets that can be included in the Web3.0 machine economy. In the future, we may see a broader range of machine devices connected to the Internet of Things, such as unmanned factories capable of fast supply chain response for e-commerce and unmanned taxis used in a shared manner. According to a McKinsey report, the Internet of Things will create a value of $5.5 trillion to $12.6 trillion globally. Considering the trillion-dollar market size of this field, as well as the development of infrastructure such as 5G devices, communication chips, and network standards, this industry will see tenfold or even hundredfold expansion in the next cycle. Therefore, NGC Ventures will continue to pay attention to and invest in early-stage projects in the machine intelligence field.
The development of the machine economy has been slow due to 1) the lack of unified industry-wide network communication standards, 2) large gaps between sensor technology and usage scenarios, and 3) inadequate computing power at terminals, among other reasons. Therefore, the market urgently needs to use blockchain technology and provide end-to-end device solution providers according to different usage scenarios, in order to build the Internet of Things devices into a mature and truly usable ecosystem.
We believe that MachineFi Lab's solution meets this market demand. In terms of product design, the platform has completed the design of "Proof of Anything" machine intelligence (consensus mechanism), built-in logic for intelligent devices, and supports on-chain proof of the operation status of machine devices. After ensuring that the machine devices can work under a unified communication mechanism, IoTex 2.0 can provide data, services, and intelligence in a decentralized way within the ecosystem, and obtain token economic incentives in a peer-to-peer manner. This economic system enables device providers and machine users to collaborate more efficiently, and can provide more effective financing solutions compared to asset securitization in traditional financial markets, and also serves as an effective financing function. MachineFi's infrastructure also includes IoTeX, an EVM blockchain that can be used for smart contracts, APIs, multi-chain wallets and software development kits (SDKs). Its ecosystem comprises multiple core components including MachineFi Portal (device registration center), TruStream (Layer2 oracle, dedicated to collecting and proving information uploaded by devices), and MachineFi Marketplace (providing developer components related to applications).
The team has a wealth of experience in the cryptocurrency industry. Co-founder Raullen Chai is the CEO of MachineFi Lab and IoTeX. He was formerly the Head of Cryptography at Uber and a Technology Lead at Google, and holds a PhD in Computer Science from the University of Waterloo. Qevan Guo, co-founder of MachineFi Lab and IoTeX, was previously a Product Lead at Facebook and holds a PhD in Machine Learning from the National University of Singapore. Xinxin Fan, co-founder and crypto lead of MachineFi Lab and IoTeX, was a Senior Research Scientist at Bosch and holds a PhD in Cryptography from the University of Waterloo. Co-founder Jing Sun is currently a Managing Partner at Sparkland Capital, a Silicon Valley venture capital firm.
In the upcoming era of decentralized machine economy, IoTex and MachineFi will serve as core infrastructure providers and specific scenario solution providers in the industry, connecting the physical world with the blockchain economy, and building the infrastructure for the machine economy era with unified machine standards and trustless service delivery and settlement solutions. NGC Ventures recognizes MachineFi team's project execution capability and their focus on the machine economy, and will continue to cooperate with the project to jointly build the era of decentralized machine economy.