Introduction

This article delves into the operating mechanism of the well-known DePIN project XYO as a location-based oracle network in the blockchain world, providing an in-depth analysis. XYO builds a decentralized geographic information oracle network verified by more than a million digital devices globally, enabling the exchange and connection of location-based information between the physical and digital worlds. It plays a significant role in fields such as autonomous driving, logistics, and information management, with the potential to become a widely recognized “Proof of Origin” in the Web3 world.

What is DePIN?

The construction principle of XYO is closely related to the emerging blockchain narrative of DePIN (Decentralized Physical Infrastructure Networks). DePIN refers to the development of physical infrastructure in fields such as transportation, energy, and IoT in the real world, enhanced by blockchain technology to decentralize connectivity, thus improving the efficiency of traditional infrastructure. Notable projects in the DePIN space include IoTEX, Helium, Hivemapper, and Natix Network.

What is an Oracle?

At its core, XYO is a location-based oracle system. In the Web3 world, oracles are critical infrastructures linking real-world data with on-chain data by retrieving, verifying, and delivering external information (typically off-chain) to smart contracts running on the blockchain. This data is vital for blockchain applications, including but not limited to natural environment information (such as weather), financial transaction data, and macroeconomic data. The most famous oracle is Chainlink.

The Birth of XYO

XYO was officially founded by Arie Trouw in 2018. However, as early as 2012, Trouw had founded XY Labs, the incubator for XYO. Early products from XY Labs, such as XY Find It and Webble, shared the vision of integrating the physical and digital worlds with applications such as finding lost items, geolocation-based treasure hunts, and incentivizing access.

With the surge in blockchain technology in 2017, Trouw and Markus Levin saw an opportunity to expand the vision of XY Labs on a larger scale. A year later, they officially created XYO. Its core application, COIN, launched on multiple platforms in 2019.

XYO aims to build an ecosystem where users are incentivized to participate, share, and collaborate while maintaining the long-term value of the tokens through a fixed supply and burn mechanism.

XYO’s Technical Architecture

XYO emphasizes maintaining data sovereignty, provenance, and permanence.

Sovereignty
Data sovereignty is the right to own, control, and store data created by users themselves. XYO considers digital sovereignty a core value that enables users to truly control their own identities and other information.

Provenance
Data traceability is a key feature of XYO. Through traceability, the details of data creation and transfer constitute the data’s provenance information.

Permanence
Data permanence includes maintaining data credibility, long-term storability, and accessibility. By maintaining data permanence, XYO greatly enhances the long-term value of data.

To achieve this goal, XYO is dedicated to building a decentralized system for verifying and transmitting real information (mainly geographical information), including several modules with different functions:

Witness
The Witness is a data output and loading module, equivalent to a small oracle in XYO’s large oracle system. It is typically used to collect information from the physical world and return it as specific data types.

Sentinel
The Sentinel is an instruction module typically used to provide final signatures for tasks and issue instructions to other modules. Examples of Sentinel applications include contactless payment modules and instructions related to information collection and verification in smart wearable applications that can record human body information.

Archivist
The Archivist functions similarly to a database, aimed at storing information such as data collected by the Sentinel. The Archivist can operate in shared, hosted, or self-hosted modes.

Bridge
The Bridge functions similarly to processors in the physical world, such as smartphones, computers, and other electronic terminals. Its core role is to transfer payload data from the Sentinel to the Archivist.

Diviner
The Diviner transforms received data for subsequent processing. Its function is similar to formulas or functions we often use in spreadsheets, which are commonly used to organize decentralized data into structured forms.

Through building a location information oracle system composed of the above functional modules, XYO operates through the following mechanism: First, it builds and maintains an information ledger for individual modules or nodes called “Bound Witnesses”. After sharing and signing, this witness forms a “Proof of Origin,” which then constructs a “Proof of Origin Chain” that can be traced back to the original data creator, completing the verification and recording of corresponding information. Meanwhile, XYO introduces zero-knowledge proof and ephemeral key technologies to ensure the accuracy and security of information transmission.

COIN: The Core Application of XYO

XYO has three core products:

COIN
A mobile application for Android and iOS platforms that allows users to earn rewards by contributing data to XYO’s decentralized infrastructure.

xyOS

An operating system built on XYO’s node network that provides access to various proprietary and third-party dApps within the XYO ecosystem and assists developers in creating more dApps.

xNS
xNS is a blockchain-based naming system that enables users to claim their unique decentralized identity. Each xNS name is priced at approximately tens of dollars.

Among these three, the COIN application is undoubtedly XYO’s core application. Launched in early 2019, COIN has been installed over 8 million times in more than 150 countries/regions, paying users over $10 million worth of cryptocurrency (over 5 billion XYO tokens).

COIN incentivizes users to create and share data—primarily geolocation information—in exchange for XYO tokens. Users generate data through various means: passive location verification, completion of location-based tasks and surveys, participation in exclusive partner offers, engagement in mobile games, and interaction with other users on the platform.

Source: XYO Official Website

After users upload and share their data, XYO constructs a reliable location information network using the aforementioned operational methods, functioning as an oracle to support various applications. XYO’s decentralized system is more resistant to tampering and intrusion than traditional satellite positioning systems such as GPS. Moreover, users retain sovereignty over their uploaded location and other data through XYO, enhancing traceability and enabling revenue sharing.

In real life, the location information network provided by XYO can empower various use cases, including but not limited to:

Autonomous Driving
Aiding the development and testing of autonomous driving systems through an unalterable location information network while delivering precise location data to drivers in real-world road conditions.

Courier Services
Track shipping and transportation routes through a reliable location information network with real-time updates. Provide accurate location data to operators for necessary assistance.

Inventory Management
Providing factories with logistics information for inventory and semi-finished products; offering merchants precise storage data for classified goods to facilitate subsequent sorting and transportation.

Urban Management
Providing location information for certain devices within a specific range to urban managers, assisting in regional security, access control, event planning, and other tasks.

XYO’s Investment Value

Undoubtedly, the decentralized location information network built by XYO possesses unique value. Compared to traditional positioning services, it offers significant security, interactivity, and user rights advantages. Additionally, XYO actively collaborates with industry leaders such as SpaceX and Cas Smart City to explore new application scenarios in the industrial and IoT sectors.

However, given that GPS systems still dominate a significant global positioning and tracking market share, XYO may face substantial competition from traditional enterprises as it seeks to carve out its niche. Furthermore, while XYO’s features are distinctive, it currently lacks a “killer” feature that could completely replace traditional solutions in the foreseeable future. Consequently, downstream customers may not be incentivized to switch from their current solutions.

XYO launched the “Build the Future” initiative to further enhance its competitiveness in 2024. This strategic plan addresses key developmental challenges, including the lack of standardized data and programming primitives, impractical code libraries, insufficient developer tools, and inadequate building incentives. Moreover, XYO aims to create a comprehensive ecosystem experience and improved interaction environment for users and developers by introducing the xyOS operating system, potentially helping to form a closed-loop ecosystem.

XYO Token Price Trends and How to Purchase

Price Trends

Source: CoinGecko

As of the time of writing, the XYO price is $0.004354, with a 1.8% decrease in the past 24 hours and a market cap of $60.66 million. Over the past year, XYO has seen a 53.3% increase. The chart above shows that XYO’s price strongly correlates with overall cryptocurrency market trends. It reached its all-time high in July 2021, exceeding $0.075, coinciding with Bitcoin’s peak.

How to Purchase

Users can purchase XYO through cryptocurrency exchanges such as Gate.io.

• Log into your Gate.io account, hover over the “Trade” tab in the navigation bar, and click “Spot Trading.”
• Enter “XYO” in the search box, and the system will display the supported trading pairs.
• Gate.io supports various order types. For example, with a limit order, input the buy price and amount, then click “Buy XYO”. Once the order is matched, XYO tokens will be deposited into your spot wallet.

Additionally, Gate.io supports purchasing XYO via credit/debit card or bank transfer. After acquiring XYO tokens, users can transfer them to a non-custodial wallet or keep them in their Gate.io account.

Conclusion

As a pioneer in the DePIN (Decentralized Physical Infrastructure Networks) field, XYO provides an innovative solution for connecting the physical and digital worlds by building a decentralized location information oracle network. It emphasizes data sovereignty, provenance, and permanence, ensuring users have control and trust over their own data. The successful promotion of the COIN application demonstrates the recognition and demand for decentralized geographic information sharing among users.

However, XYO faces significant challenges in competing with traditional positioning systems like GPS, which boast strong market share and technological advantages. XYO has launched the “Build the Future” initiative and the xyOS operating system to address this. These efforts actively improve its ecosystem, enhancing the experience and engagement of users and developers. Such measures are expected to strengthen XYO’s market competitiveness and promote the implementation of more practical applications.

As blockchain technology advances and the DePIN concept gains traction, XYO is poised to contribute significantly in various sectors. The project shows promise in revolutionizing autonomous driving, streamlining logistics and transportation, enhancing inventory management, and improving urban planning. By doing so, XYO aims to create lasting value for users and industries.

Please note that the cryptocurrency market is highly volatile and carries significant risks. Before making investment decisions, thoroughly research and assess your risk tolerance. This article does not offer financial advice. Invest with caution.