Introduction

Peaq Network has achieved a significant breakthrough in decentralized physical infrastructure networks (DePIN). It offers a variety of components for building decentralized tangible physical infrastructure. Peaq has garnered considerable attention for its innovative approach, particularly its potential to revolutionize physical infrastructure construction, management, and operation.

In early 2024, Peaq completed a $15 million funding round led by Generative Ventures and Borderless Capital, strategically positioning itself for the upcoming mainnet launch and the listing of its native token, PEAQ. Messari predicts that by 2028, the market size of the DePIN industry will reach $3.5 trillion as adoption rates across various sectors continue to rise. This highlights the potential of the DePIN market.

The technical prowess of Peaq Network is evident in its modular DePIN features and multi-layer data verification framework. The former enables developers to swiftly construct DePIN projects, while the latter ensures the authenticity and integrity of data, which is crucial for decentralized systems, especially in IoT applications.

As the Peaq Network mainnet is set to launch, its strategic vision and strong technological foundation establish it as a key contender in the DePIN arena, poised to address the growing demand for decentralized physical infrastructure solutions across multiple industries.

Project Overview

Founded in May 2020, Peaq Network is a pioneering Layer 1 blockchain specifically designed to support decentralized physical infrastructure networks (DePIN) and machine RWA (real-world assets). As the cryptocurrency economy evolves, the demand for decentralized solutions that merge physical infrastructure with blockchain technology has become more critical than ever. Peaq Network meets this demand by offering a robust platform that enables the seamless integration of physical assets into the blockchain ecosystem.

With parallel block production, asynchronous support, and agile core timing, Peaq Network can scale to 10,000 TPS (transactions per second) and is capable of exceeding 100,000 TPS after upgrades, all while maintaining a minimum transaction cost of approximately $0.00025 (according to Peaq documentation).

Core Team

Source: RootData

• Till Wendler: As the co-founder of Peaq Network, he previously served as Co-founder and CEO of EoT Labs, advisor for the distributed battery project Penomo, and Operations Manager at Advanced Blockchain AG. He graduated from California State University, East Bay.
• Leonard Dorlochter: As the co-founder of Peaq Network, he formerly worked as the co-founder and Chief Product Officer at EoT Labs. He graduated from the Technical University of Berlin.
• Max Thake: Graduated from MCAST in Malta, he is the co-founder of Peaq Network.
• Anastasia Volgemut: She is the Operations Manager at Peaq Network, with experience as Chief Operating Officer for several GameFi projects. She graduated from the South African College of Applied Psychology.

The core team of Peaq Network consists of experts in blockchain, decentralized applications (DApps), and the Internet of Things (IoT). Their expertise is crucial for developing Peaq’s infrastructure. Co-founder Wendler emphasizes the importance of creating a decentralized machine economy that combines economic incentives with shared ownership and universal accessibility (according to the @peaqnetwork/peaq-raises-6-million-in-funding-to-power-the-economy-of-things-d7b5df9f9e63">Peaq blog).

Funding Status

Since its inception, Peaq has completed four funding rounds and one CoinList community sale (according to the Peaq blog).

Pre-seed

In October 2020, Peaq completed its pre-seed funding round and raised €750,000 from well-known investors in Germany. Notable investors include former Procter & Gamble Vice Chairman Werner Geissler, former Cisco Germany CEO Michael Ganser, 4P Capital Partner Xavier Salas, Senior Digital Consultant at Deloitte Friedrich Neumann, and former CEO of Mäurer & Wirtz Steffen Seifarth.

The €750,000 raised will be used to establish a partnership with one of Germany’s leading automotive manufacturers, namely the Bosch Group, to fully implement Peaq in the production and operations of the automotive industry.

Seed Round
In June 2021, Peaq secured €2.5 million in funding, led by Scherzer & Co. AG and former Procter & Gamble Vice Chairman Werner Geissler, along with support from Meteoric VC.

The funds will be used to expand and enrich Peaq’s blockchain solutions for businesses—for example, a decentralized electric vehicle charging platform that uses self-sovereign identity (SSI) to address fragmentation and range anxiety issues in electric vehicles. This funding will also be used to establish a sales and partnership team aimed at scaling the launch of both new and existing solutions.

Private Round
In June 2022, Peaq completed its private funding round led by Fundamental Labs and secured a total of $6 million. HashKey, Delta VC, GSR, Mulana, Cypher Capital, GravityX, Waterdrip, Ceras Ventures, Masterventures, Moonrock Capital, and Wami Capital also contributed to this funding.

Source: Peaq Blog

The funds will primarily be directed toward expanding Peaq’s elite development team. Additionally, a portion will be allocated to launching new products and features within the Peaq ecosystem, as well as enhancing market awareness of the project in anticipation of Peaq’s bid for a Polkadot parachain.

Pre-IPO Private Round

In March of this year, Peaq raised $15 million in a multi-phase financing round launched in the fall of 2023, led by Generative Ventures and Borderless Capital. Other participating investors include CMCC Global, Spartan Group, HV Capital, Animoca Brands, Moonrock Capital, Fundamental Labs, TRGC, DWF Labs, Crit Ventures, Cogitent Ventures, NGC Ventures, Agnostic Fund, Altana Wealth, LBank Labs, Protein Capital, and Token Metrics.

Source: tech.eu

The $15 million raised in this round will be primarily allocated to advancing the Peaq ecosystem through initiatives like the Peaq Grant Program, which supports the building of DePIN applications on the Peaq platform. Additionally, this funding will contribute to developing Peaq’s modular DePIN features and SDK. They enable DePIN teams to build and deploy their projects on Peaq more efficiently.

Community Sale

In May of this year, Peaq completed its token issuance on the CoinList platform at a price of $0.079274. The issuance raised $20 million, resulting in an estimated valuation of approximately $333 million. Over 14,500 community members contributed over $36 million, leading to an oversubscription of $16 million, which has been refunded. This made the issuance the largest in terms of funds raised and participation on the CoinList platform in the past two years.

The funds raised from this token issuance will develop the ecosystem, further enhance Peaq’s modular DePIN features, and ensure network security.

Technology

Consensus Mechanism

Peaq employs a dual consensus mechanism, incorporating Delegated Proof of Stake (DPoS) for block production and Nominated Proof of Stake (NPoS) for validation. Block production is managed by collectors who create blocks and maintain the state of the network. Delegators stake tokens to ensure the reliability of the collectors (according to Peaq documentation).

Node Operations

Peaq’s block production relies on the collaborative efforts of collectors and delegators to ensure transactions are broadcasted to blocks quickly, reliably, and censorship-resistant.

• The primary role of collectors is to create blocks and keep the network state updated, which can be likened to miners in a Proof of Work network. However, unlike miners, collectors do not enhance network security; rather, they are essential for maintaining network activity, ensuring its decentralization and censorship resistance. Essentially, collectors generate proofs of state changes based on the Polkadot and Kusama relay chains. They also operate a full node on both the relay chain and parachains in their respective operations.
• Delegators are vital to the block production process, as they filter through a selection of honest and dependable collector candidates to ensure their trustworthiness. By staking tokens on the collectors they select, delegators aim to support honest and high-performing collectors. Furthermore, the entry requirements for delegators are much less demanding than those for collectors, making it easier for a broader range of community members to engage in the block-creation process.

Together, collectors and delegators receive 30% of the total rewards, which includes newly minted blocks and transaction fees paid by network users (according to Peaq documentation).

Modular DePIN Features

Peaq Network offers ready-to-use modular functionalities that can be seamlessly integrated into DePIN. This simplifies infrastructure management and enables a wide range of applications.

Peaq ID

Peaq ID is a novel identifier designed for machines, devices, vehicles, or robots in the Web3 environment. It is based on the decentralized identifier (DID) standard developed by W3C and supports verifiable decentralized digital identities.

Uses of Peaq ID include:

• Enabling devices to recognize and verify each other
• Facilitating machine-to-machine (M2M) transactions
• Validating assertions made by machines
• Maintaining privacy and security

By adopting the DID standard, Peaq ID establishes a robust framework for machine identities on the Peaq network and other networks. It simplifies communication between different types of machines and promotes blockchain interoperability and seamless integration.

Peaq Access

Peaq Access is a powerful feature for implementing advanced access control on the Peaq network. This functionality allows DApp developers to implement logic for a wide range of use cases in the IoT economy. For example, they can grant or deny user permissions to access vehicles in a car-sharing DApp, or restrict access to specific areas based on user permissions.

Key features of Peaq Access include:

• Easy Implementation: Peaq Access is implemented as a Substrate pallet, making it easy to integrate and use.
• User Groups, Roles, and Permissions: Create user groups, assign roles, and define permissions to effectively control access.
• CRUD Operations: Perform Create, Read, Update, and Delete operations to manage user groups, roles, and permissions.
• Seamless Interaction: Access Peaq’s access control features through external calls, enabling users to request access, verify permissions, and perform authorization actions.

Peaq Access enables straightforward implementation of access control, ensuring that only authorized machines, individuals, or entities can access sensitive resources and perform operations on the Peaq network.

Peaq Verify
Peaq Network has introduced an advanced data verification framework aimed at improving the security and reliability of decentralized physical infrastructure networks (DePIN). This framework is essential for tackling challenges related to data authenticity and integrity in decentralized settings. It consists of three distinct layers, each offering specific security and trust features.

(1) Layer 1 Verification: The first layer is the foundational layer where devices encrypt and sign data using their private keys. This process ensures that the data can be verified by others, establishing a basic level of trust. The encrypted data signature is crucial for maintaining data integrity, especially in environments where data is generated by numerous distributed devices.

(2) Layer 2 Verification: The second layer employs machine learning algorithms to analyze data patterns and identify anomalies. This layer adds an extra layer of security by flagging abnormal readings that may indicate data manipulation or errors. The use of machine learning in this context is vital as it enables real-time data analysis and enhances the system’s ability to detect and respond to potential threats. This layer is particularly useful in scenarios where data integrity is critical, such as monitoring environmental conditions or the operation of autonomous vehicles.

(3) Layer 3 Verification: The third layer introduces a trusted oracle system that cross-references data from multiple community devices. This layer further enhances the data reliability by providing a consensus mechanism for verifying data against multiple sources. It is customary to use oracles in blockchain technology, which ensures that off-chain data is accurately represented on-chain. In the context of the Peaq framework, this layer ensures that data from decentralized devices is not only secure but also consistent and reliable across the network.

Peaq Pay
Peaq Pay is a feature within the Peaq Network that facilitates seamless transactions between machines and users. It supports creating and funding multisignature wallets, and approving payments and refunds in transaction workflows. The system is designed to efficiently handle a high volume of transactions, with a transaction fee of only $0.00025 per transaction. The high throughput and low transaction costs unlock numerous DeFi applications for machines, which allows for micro-payments and pay-per-use models.

AI Agent
Peaq has integrated Fetch.ai’s autonomous AI agents to optimize processes within its network. These agents are used to automatically match users with services (such as parking spaces) or coordinate complex machine networks. The integration of AI agents enhances the efficiency and effectiveness of M2M transactions, which further strengthens the Machine Finance (MachineFi) ecosystem.

Peaq Network’s modular features provide a decentralized backend for DePIN, which facilitates the efficient deployment and management of projects and showcases Peaq’s innovations in decentralized infrastructure.

Interoperability

Interoperability is a core feature of Peaq Network, allowing smooth interactions with other blockchain networks. This is achieved through cross-chain bridges and protocols that facilitate asset and data transfers across blockchains. With interoperability, Peaq Network enables users to benefit from multiple blockchain ecosystems. This expands DePIN’s utility and boosts its adoption.

Polkadot
Peaq was initially developed as a parachain on Polkadot. It functions as an independent blockchain that shares security and interoperability with Polkadot. This foundation allows Peaq to interact seamlessly with Polkadot and other connected relay chains.

Ethereum
Peaq has developed a direct bridge between the EVM side of the Peaq Network and the Ethereum mainnet to facilitate the seamless movement of liquidity and assets between the two networks. It supports EVM smart contracts, which means that any contract from Ethereum or any other EVM-compatible blockchain can be migrated and executed on Peaq without any modifications. This promotes efficient code reuse and encourages a diverse multi-chain software development environment.

Cosmos
Peaq establishes a link between the Substrate addresses of the Peaq Network and the addresses within the Cosmos ecosystem through its multichain ID system. By mapping the two address types, machines on the Cosmos network can interact seamlessly with entities in the Polkadot ecosystem, and vice versa.

BNB Chain
The technical integration between Peaq and Binance’s BNB Chain is achieved by using Peaq’s multichain machine IDs. These IDs act as bridges between different blockchain networks. They enable cross-chain communication and data exchange. Designed to be flexible and adaptable, Peaq IDs can be used across various blockchain standards.

A fundamental technical aspect of this integration is address mapping, which is an integral part of the Peaq storage module. This feature functions like an address book. It connects various addresses utilized across different networks that follow distinct standards. By establishing these connections, it streamlines cross-chain communication and enables projects to function smoothly across multiple blockchains. This capability is particularly essential for initiatives that demand interoperability between Peaq and the BNB Chain, as it simplifies the process by removing the necessity for complex bridging solutions.

Solana
Peaq Network’s innovative multichain machine IDs allows a single Substrate address within the Peaq Network to serve as a connection point to associate with Solana addresses. This is achieved through a mapping process that converts the Substrate-based address into a format compatible with the Solana address system.

Token Economics

The token used in the Peaq Network mainnet is PEAQ. It serves multiple functions within the network and plays an essential role in the network’s operation, governance, and incentive mechanisms. The PEAQ token is built on the Substrate framework. Known for flexibility and interoperability, the framework enables Peaq to benefit from the security and scalability of the Polkadot ecosystem.

Token Utility

Transaction Fees
The PEAQ token is used to pay transaction fees within the network. These fees include fees for transferring assets, executing smart contracts, and other network activities.

On-chain Governance
PEAQ token holders have the right to participate in network governance. This includes voting on proposals, protocol upgrades, and other critical decisions that impact the future of the network. Designed to be decentralized, the governance model ensures that all stakeholders have a voice.

Node Staking
Block production in Peaq is carried out by collectors and delegates. Collectors are tasked with creating blocks, while validators on the relay chain finalize them. Delegates support collectors they trust to help ensure that the blocks created resist censorship. Both collectors and delegates act as nodes within the Peaq network. They are required to stake PEAQ tokens, which can earn rewards or incur penalties based on their performance.

Device Reputation Proof
Device owners/operators stake PEAQ tokens to guarantee the reliability and quality of their machine services. The staked tokens represent the device’s reputation within the network. A certain amount of staked tokens will be slashed if the device performs poorly or fails to deliver service.

By providing tangible performance assurances, this functionality enhances the trustworthiness of computers on the network. It also creates additional demand for PEAQ tokens, as higher stakes can lead to better reputation scores and more opportunities within the network. The potential for penalties (slashed tokens for poor performance) and rewards (additional tokens for good performance) further incentivizes device operators to provide high-quality service.

Allocation and Vesting

The total supply of PEAQ, the mainnet token in the Peaq Network, is 4.2 billion. Its initial distribution and vesting schedule are as follows:

• Pre-seed: 294 million tokens, accounting for 7%, allocated to Peaq’s pre-seed round investors. These tokens have a 24-month vesting period with a 6-month lockup. 5% will be released after the lockup period.
• Seed Round: 210 million tokens, accounting for 5%, allocated to Peaq’s seed round investors. These tokens are subject to a 24-month vesting period, which includes a 6-month lockup. Following the lockup, 5% of the tokens will be released.
• Private Sale Round: 546 million tokens, accounting for 13%, allocated to Peaq’s private sale investors. These tokens are subject to an 18-month vesting period, which includes a 6-month lockup. Following the lockup, 7.5% of the tokens will be released.
• Pre-IPO Private Sale: 378 million tokens, accounting for 9%, allocated to Peaq’s pre-IPO private sale investors. Similarly, these tokens have an 18-month vesting period with a 6-month lockup, releasing 7.5% after the lockup period.
• Community Sale: 252 million tokens, accounting for 6%, allocated for the community public sale on CoinList. These tokens have a 6-month vesting period with no lockup.
• Project Team: 840 million tokens, accounting for 20%, allocated for the incentive program targeting the teams and key contributors who help build and expand Peaq and its ecosystem. These tokens have a 36-month vesting period with a 9-month lockup.
• Network Security: 210 million tokens, accounting for 5%, allocated for grants related to security audits and other measures aimed at making Peaq as secure and resilient as possible. These tokens have a 54-month vesting period with no lockup.
• Ecosystem and Vault: 840 million tokens, accounting for 20%, allocated to ecosystem incentive programs, such as the Peaq Ecosystem Funding Program, aimed at establishing Peaq as a “base” for DePIN and incentivizing new project participation. These tokens have a 48-month vesting period with no lockup.
• Community Program: 630 million tokens, accounting for 15%, aimed at allowing community access to the network while increasing additional liquidity to promote Peaq’s growth and adoption. These tokens have a 36-month vesting period with no lockup.

Deflationary Model
The initial inflation rate is set at 3.5% to ensure adequate incentives for early adopters. However, this inflation rate will decrease by 10% each year until it stabilizes at 1%.

Note: The above deflationary model is not set in stone; the community can propose adjustments to the inflation/deflation settings through the network governance mechanism.

Testnet - Krest
Krest is Peaq’s testnet. It serves as a simulated testing environment for DePIN projects intended for deployment on Peaq. The Krest testnet will continue to exist even after the Peaq mainnet goes live.

The token for the Krest testnet is KREST, and its Token Generation Event (TGE) occurred in August 2023. Its initial distribution is illustrated in the figure below:

Source: Peaq Doc.

KREST is now circulating in the cryptocurrency secondary market.

Ecosystem

Source: Peaq Blog

As illustrated in the image above, by October 29 of this year, a total of 38 DePIN projects have been officially announced as being developed on the Peaq Network. In addition, there are 7 more DePIN projects currently in progress on Peaq that have yet to be revealed. These projects encompass a diverse array of use cases, including AI health diagnostics, decentralized edge computing, and tokenized luxury vehicles. Details about these projects will be disclosed in Peaq’s Q4 2024 recap, which will bring the total number of DePIN projects on the Peaq Network to at least 45 by the end of this year.

Here are five representative ecosystem projects currently on the Peaq Network:

Kaisar Network: Kaisar Network is a DePIN project that provides peer-to-peer GPU resources for AI projects. It chooses Peaq as its mainnet for development. It offers a Web3-based alternative to centralized cloud platforms. Currently, it boasts a backup capacity of over 100,000 consumer and enterprise GPUs, making it a leading provider of decentralized AI computing power.

DeNet: DeNet serves as a data storage layer for applications and DApps and is currently migrating from Polygon to Peaq. By utilizing the idle storage capacity of everyday computers and smartphones, DeNet allows anyone to earn rewards by sharing unused hard drive space. DeNet has approximately 100,000 users from over 25 countries. It has a total data storage capacity of 9 petabytes and has already accommodated approximately 13 million files.

NATIX: NATIX is a decentralized dashcam project based on Peaq. It utilizes edge computing architecture to ensure user data privacy and security. Over the past year, over 94,000 users have utilized NATIX’s smart dashcam DePIN application, “Drive&,” to help map the world in real-time. To date, these users have mapped over 29 million kilometers of roads and recorded more than 196 million events across 171 countries. NATIX utilizes the Peaq SDK to assign Peaq IDs to mobile devices in the application’s staging environment, which are then used to manage their respective data streams.

Farmsent: Farmsent is establishing a global Web3 marketplace for farmers and retail businesses, which does not rely on centralized intermediaries. This marketplace is underpinned by a decentralized physical infrastructure network (DePIN) of sensors that monitor product quality and provenance, thereby enhancing transparency throughout the global food supply chain. In its collaboration with Peaq, Farmsent will leverage Peaq IDs for identity management within its ecosystem. It assigns unique Peaq IDs to farms and supply chain devices, including soil quality sensors, and allows them to securely upload data to the Peaq blockchain. Furthermore, Farmsent will implement smart contracts on the Peaq platform to facilitate its global food traceability system and introduce its native token on Peaq. These contracts will create a rewards mechanism to incentivize the Farmsent DePIN and unlock the potential of the entire agricultural data economy.

Charge.xyz: Charge.xyz is a decentralized charging network project. By connecting to the charge.xyz DePIN, wallbox (charging point) owners will be able to rent out their charging stations and customize the availability of their chargers. They will also be able to set pricing rates and view usage logs of the chargers. Charge.xyz leverages Peaq’s modular DePIN capabilities, uses Peaq IDs as the identity standard for charging devices within its network, and utilizes the Peaq blockchain as its payment and data storage layer. The team has developed a mobile application that allows users to register their chargers and electric vehicles using Peaq IDs.

Network Usage

Source: Peaq Official Website

As of October 29 this year, over 1 million devices are operating on the Peaq Network, with RWA assets valued at $25 million. The Peaq Network is reshaping 20 industries, and there are more than 45 ecosystem projects in development.

Roadmap

The Peaq Network mainnet will officially launch on November 12 this year, and at that time, its token, PEAQ, will also be listed on multiple leading exchanges (Peaq Twitter).

The pre-launch network for Peaq has been activated and is operational. “Pre-launch” indicates that there is still work to be done, so it is not the final form of the Peaq mainnet. This is a significant milestone on the mainnet launch and token listing path. During the pre-launch phase, Peaq will implement various important integrations and upgrades, specifically as follows (Peaq Blog):

1.Wallet Integration

• Integration with MetaMask wallet
• Integration with Ledger hardware wallet
• Integration with Safe multi-signature wallet

2.Peaq Portal

• Staking Dashboard for staking on Peaq nodes (post-listing)
• DEX trading and liquidity provision for Peaq native assets (post-listing)
• Stunning activity UI for Peaqonauts (possibly post-listing)

3.Galxe Integration for Peaq Native Marketing Activities
4.Particle Network Integration for Account Abstraction
5.Fireblocks Integration for Secure Token Custody
6.Tier-1 Bridge Integration for Cross-Chain Bridging
7.Stablecoin on Peaq
8.On/Off-Ramp Solutions
9.BitBond Integration for Token Minting and Management
10.Exchange Integration for Peaq and Peaqosystem DePIN
11.EVM Smart Contracts and Pallets Being Deployed on Mainnet:

• DID
• RBAC
• Vesting
• ERC-20, ERC-721, ERC-1155, and ERC-4626 token features
• Staking
• Storage
• Multi-signature
• Unified Address

12.More Nodes Going Online to Expand and Decentralize the Network:

• Professional infrastructure providers
• Trusted enterprises
• Community nodes

Conclusion

The Peaq Network serves as a groundbreaking entity in the blockchain domain, particularly in the context of decentralized physical infrastructure networks (DePIN). It illustrates the potential to reshape how decentralized physical infrastructure is developed through its robust Layer 1 blockchain architecture, collaborative governance model, and diverse ecosystem projects promoting an innovative decentralized machine economy.

Peaq is committed to scalability, security, and sustainability principles, which are reflected in its technical framework that supports high transaction throughput and cost-efficient operations. The network’s expanding ecosystem, including projects like Kaisar and DeNet, showcases its adaptability and potential to influence a wide range of industries.

As Peaq looks to the future, its development roadmap prioritizes enhancing technical capabilities, expanding its ecosystem, and encouraging community participation. These strategic initiatives establish Peaq as a frontrunner in the DePIN sector and are anticipated to drive advancements in decentralized infrastructure and the Internet of Things (IoT) economy.