DePIN and Machine Data Can Change Web3

DePIN enables the tokenization of machines, opening up RWA investments and spreading benefits to owners and users, says Leroy Hofer, CEO and co-founder of Teneo Protocol.

Leroy Hofer, CEO and co-founder of Teneo Protocol, joins CoinDesk’s DePIN Vertical to explain how DePIN can integrate valuable machine data into Web3.

Over the past decades, machine data has emerged as one of the world’s most valuable assets. From manufacturing and agriculture to transportation and healthcare, the data generated by machines is driving innovation and efficiency. Yet, despite its immense value, 99% of this data remains trapped in silos, inaccessible and underutilized.

This creates an opportunity for the integration of machine data into Web3 with decentralized physical infrastructure networks (DePIN) offering a transformative solution.

The full potential of DePIN

Using blockchain technology, DePIN enables the tokenization of machines, effectively turning real world assets (RWA) into digital tokens that can be traded, owned and utilized on-chain. This process creates a bridge between the traditional asset markets and blockchain tech, breaking down barriers to RWA investments. It also enables individuals to directly fund and receive returns from services they like and use, providing a stream of passive income.

That is not just a theoretical concept but already a tangible reality. Take, for example, the tokenization of a shared mobility fleet in Vienna. By bringing vehicle data on-chain, the shared mobility provider offered tokenized participation, allowing users to invest in and earn rewards from a vehicle’s performance. This democratizes access to valuable assets and improves operational efficiency and customer satisfaction.

Tokenizing machine data and bringing it on-chain is the next logical step in the evolution of DePIN. Imagine a data pool with machine data from public EV charging stations, each collecting data on charging power, the battery level of the EVs in the surrounding area or the current energy grid utilization. Builders in the energy sector have now all the information they need to build dApps that help to balance the electric grid, for instance by offering charging incentives to EV drivers with low battery if there is a surplus of power available. By tokenizing the generated data, it can be securely stored on the blockchain, ensuring transparency and immutability. This data can then be monetized, opening up new revenue streams for charging station owners.

And the best thing about this? Everyone can be part of this. Not just big corporates. Literally everyone. To stay with this example, anyone with a wallbox at home can connect their “machine” and start earning rewards or purchase a fraction of tokenized charging stations via tokens. With Teneo Protocol, we transform data into a valuable asset that can be bought, sold, or traded.

Beyond tokenization & monetization

The benefits of bringing machine data on-chain go far beyond tokenization or monetization. One of the most promising applications is in the field of artificial intelligence (AI). Today's AI models require vast amounts of data to train effectively, yet real-time machine data remains relatively untapped. By making the high-quality data accessible on-chain, DePIN enables the development of more accurate and efficient AI models, driving advancements in predictive maintenance, performance optimization, and other critical areas.

Moreover, integrating machine data into Web3 enhances data integrity and security. Blockchain technology ensures that data is stored in a transparent and tamper-proof manner, addressing the issues of data manipulation and unauthorized access. This is particularly important for Web2 industries where data accuracy and security are essential, such as Health care and finance.

However, the transition to a fully integrated Web3 ecosystem is not without challenges. One of the primary hurdles is the need for robust infrastructure to support the secure and efficient transfer of data. This requires advancements in both blockchain technology and the underlying hardware.

Despite these challenges, the benefits of integrating machine data into web3 far outweigh the obstacles. As more industries recognize the value of tokenizing their assets and leveraging blockchain technology, we can expect to see a significant shift towards more decentralized and efficient systems.

So can machine data change Web3? Absolutely! This new era of Web3, powered by DePIN, will unlock unprecedented opportunities for innovation, growth and collaboration. And it’s getting real.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

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Leroy Hofer is the Austrian entrepreneur CEO of Teneo Protocol. He completed business school with a focus on business economics and communication. After university, Hofer ventured into the startup industry, gaining invaluable experience. His active involvement in the cryptocurrency sector have honed his skills in business strategy and development.

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