In this very interesting interview, Dr. Raullen Chai explains to me what MachineFi is and how it works and shares the latest IoTeX achievements. If you want to stay up-to-date on new trends, don’t miss out on this article!
In conversation with IoTeX Co-Founder and CEO Raullen Chai
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.
U.Today: You are the co-founder and CEO of IoTeX. How and when did you first get interested in the crypto sector? How did the idea to build IoTeX come about?
Raullen Chai: Its 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 ensure that communication is always authentic and secure. And the bitcoin whitepaper really came out, I think, closer to the end of 2008 or the beginning of 2009. It was something so bizarre that most of the people in our research lab thought it was wrong. We spent a month or two trying to attack it, but we were unsuccessful. Then we realized it was something wonderful. That’s when I got into bitcoin, in those days actually.
Yes, after graduating in 2012, bitcoin is still small, ethereum still doesn’t exist. There is no such thing as the ‘crypto industry’ or Web 3.0 anymore. So I joined Google, I lived there for five years, and then I stayed at Uber for another year. But during these years I am still seeing how blockchain and crypto as an industry are growing.
I was an early participant in the Ethereum ICO. That was, I think, in 2014-ish. I am an early participant in several early projects for Ethereum. I guess I always kept my eye on this area. Then in 2017, I think the time is ripe. So I left Uber. I was joined by two other co-founders and we started IoTeX. So far that’s all.
U.Today: And how did the idea to make it come about? Was there a special moment?
Raullen Chai: a special moment? Well it’s a little different. We are looking at the distant future of bitcoin or blockchain. The distant future, because it is essentially a Turing complete self-enforcement. The rules engine drives the economy. At that time, the amount of powered economy was very less, for now it’s more like 1 trillion inches, I think with web 3.0 economy. But our approach is always how it will run 100 times more or at least a few times more than the real world economy. There is sort of a missing layer between which we think is a machine network that connects the real world with the blockchain. That’s why we came up with the idea for IoTeX.
We want to build a network that runs all the machines in the world autonomously. It sounds a bit far-fetched now, but that’s the end goal.
U.Today: Tell us about IoTeX, what solutions does it provide?
Raullen Chai: As I said, we think there will be a number of networks that tie the real world and the crypto world together that help extract information from the real world to Web 3.0, to fit those dApps. That’s a way.
Another approach is essentially allowing people to sit through a program on the web similar to how the real world works, but no one is actually building those massive machine networks, except maybe AT&D’s. Except T and those types of large corporations. So we came up with something like a methodology that we call MachineFi, which is trying to introduce large-scale, multi-machine networks in a decentralized way by encouraging deployment of machines, financialization, usability of data. Enabling self-involved governance of machines and our machines. In short it is IoTeX. that’s what we do.
With this new approach we have built a lot over the past four years, such as a Layer 1 blockchain done from scratch. Even running compatible by 100 more validators, it now processes 40 million transactions worldwide, separated from all disciplines around the world. That’s layer 1 that we’ve created. And on top of that we have our computational oracle which is a layer that interacts with the machines. Primarily, what the machine does is trying to translate it into some kind of proof that layer 1 contracts can understand. Machines can be as big as a car or as small as a Raspberry Pi, a smart watch, a phone, all kinds of things.
U.Today: It’s very interesting and I think it’s something new. At least I haven’t heard about it before. We all have heard of DeFi and GameFi but MachineFi is something new.
Raullen Chai: Well when you think about it, MachineFi is the next wave, isn’t it? Because DeFi has been very successful. this is easy. ‘Easy’ means that the life cycle of each DeFi project is relatively short. This means that iteration is faster. People just try it, it doesn’t work and they move on to the next, which is why DeFi has grown so fast over the years. MachineFi is relatively slow, as it involves machines and equipment in a decentralized manner. But of course the soul is always the same.
I believe there are two types of applications in the Web 3.0 space that cannot exist without MachineFi functionality. One is some new financial derivative or a product that is actually based on real-world information, for example, weather derivatives, traffic derivatives or geo-certification, for example, you tokenize people living in a specific geo-location. Can airdrop. This is a category I call ‘new financial products’.
Another one we bet heavily on is the ‘do-ex-to-earn-type’ app, which means you can encourage people to ‘drive-to-earn’ based on their driving data . or ‘sleep-to-earn’, based on their healthcare data or ‘learned-to-earn’. These are two categories of dApps that cannot exist without us.
YOU TODAY: Interesting. Can you tell us how the IoTeX token works?
Raullen Chai: Yes, the IoTeX token is not much different from Ethereum. It is definitely a layer 1 gas token. And delegates must stake IoTeX to run nodes to protect the network. It also provides security for the network. And third, it is also for governance, for example, people can place bets and vote on how this protocol develops further. And in the future, what we are thinking about is to have a true stream as well, which is like a computational oracle, people will have to stake IoTeX to run the true stream node. This is something to come in the future.
Those are some of the core utilities for the IoTeX token and therefore, we have some 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 ago. It is like a reserve IoTeX for the growing ecosystem. We’re essentially giving a grant day to developers who are building ‘public-object-type projects’ on top of IoTeX. They are eligible for the grant. In addition, we have an ecosystem fund to invest in projects that are really building on top of IoTeX long term. That’s ecosystem incentive.
On the other hand there is such a thing which we call burn-drop. If a device is activated on the IoTeX network, a certain part of IoTeX is burned and another part of IoTeX is left to all long-term stakeholders. They are campaigns or programs that are in favor.
U.Today: The IoTeX blockchain already powers real devices, as I saw on your website. Can you tell us about them?
Raullen Chai: Yes to be sure. For now, it powers two devices. One is called Ucam which is something we did in 2019-2020. It is a smart home camera based on privacy. You own your key, a ‘your key, your data’ type of idea. No one can tap into your home camera to see what’s happening. You have the keys, you have all the data. This one has been deployed I think for about 10k families in 60+ countries, it has been quite successful. This is a serious innovation in the world in 2020.
The second is open source for developer products. It’s called Pebble Tracker. It is a GPS tracker with six dimensions of data such as humidity, velocity or air pressure. It is like a tracker.
We started Kickstarter for the hardware last year and we easily sold 2,000 units of this tracker. The goal here is trying to work with a vertical in the MachineFi space. This is ‘proof of presence’. By having this tracker, you can go to a place, you can prove that you have been there and maybe you are eligible for tokens, NFTs or some kind of reward, like maybe in our DeFi protocol Have high yielding agricultural powers. Those are the things we want to do with this proof for geolocation. Give that And we certainly have quite a few in our pipeline, some smart devices like wearables and open-source hardware, like the Raspberry Pi. They are all in the pipeline for this year.
U.Today: I’ve also noticed that you have a lot of really remarkable achievements in 2021. what was your favourite? What was most important in your opinion?
Raullen Chai: I’m sure different people here have different opinions, right? I believe the token is listed on Coinbase, this is too big to happen in the last year. But for me, I think the launch of the MachineFi initiative is bigger than the Coinbase listing, because we started with just that desire. But no one was really clear about or knew how to build this IoTeX blockchain from scratch. MachineFi is one such milestone. I guess it’s not just me. The whole team, or the entire Web 3.0 community really feels the same way. This is how we should build the IoTeX blockchain and that’s how we encourage or jumpstart the machine networks deployed on this planet.
U.Today: And what are IoTeX’s biggest plans for 2022?
Raullen Chai: Of course for us it is always more MachineFi Dapps, more devices and more users. In fact this year we have a couple of projects that we’re just incubating around these two categories of DApps that I was talking about. By the end of this year, we should see at least 10x more devices with 100x more users on IoTeX.
U.Today: Can you tell us about your favorite crypto projects?
Raullen Chai: This is good. I love bitcoin and to be honest, I love ethereum. I guess those are two projects that everyone loves, right?
U.Today: Yes, I think so.
Raullen Chai: Yes, everyone likes them. But there are a few small ones that I like too.
Uniswap, I really like it because it is such a success. It’s bringing AMM to the world. This basically opens a new chapter for DeFi. Maybe you don’t know but, before that, a decentralized exchange was just a disaster because everything was based on order-book and because the chain was slow, it almost didn’t work. But thanks to Uniswap everything is going very smoothly right now.
And another one that I love is the tornado. It is a type of privacy protocol. This allows you to mix your ethereum, or other tokens, with other types of ethereum tokens and you can try to achieve some sort of privacy. It’s a protocol that I really like, although it does have some problems.
U.Today: And do you have a crypto portfolio?
Raullen Chai: yes i do. I invested a lot, especially before starting IoTeX, when I had more time.
U.Today: And what’s in it, if it’s not a secret? What is the biggest part?
Raullen Chai: Sure. Like I said, I am a very long-term holder of bitcoin and ethereum. If you look at my wallet, I haven’t transferred those tokens for many, many years. They are still there. They are long term holding things. Short term, I think I have some other tokens like CityDAO, Avalanche. I want to invest in a protocol like layer 1 protocol or platform protocol. Because for those DeFi games, they usually have a very short life cycle, a very short life cycle. This means you have to watch the coin, which may rise next month and probably die after three months. So I invest in something more long term.
U.Today: I get it. And what will the price of bitcoin be a year from now? This is not a prediction, just your guess.
Raullen Chai: You know, bitcoin is coming to a halt in 2024 if I remember correctly. This means, usually starting half a year earlier, according to my experience, the price will go up. I think we are at that point. I think bitcoin will probably be 50k or 80k by the end of this year. If it gets even better, 100k may be possible. That’s just my guess.
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