Preface: Data and AI

The Importance of Data and Its Economic Value

Data has become an indispensable core resource for businesses and economic activities in the AI era. The explosive growth of AI technology in recent years, such as the emergence of ChatGPT and Google’s launch of Gemini in response, has further amplified the role and importance of data. Companies like Microsoft, OpenAI, Nvidia, and Meta have played key roles in this wave of technological innovation, driving the widespread adoption and in-depth development of AI applications. In 2023, these tech giants experienced a rebound, with their stock prices rising by as much as 54% due to the combined effects of the AI boom and market easing. AI has disrupted traditional business models and given rise to new industries such as data analytics and data security, which have now become important forces driving global economic growth. According to McKinsey, data-driven AI technologies will contribute an estimated $13 trillion to global GDP growth over the next 10 years. The advancement and adoption of AI technology have transformed data from a mere resource into an engine of innovation and economic development.

The Interconnection of Data and AI

Big data and artificial intelligence have revolutionized the way people make decisions. Data enables businesses to provide personalized services, optimize operational processes, and enhance accuracy and efficiency. For instance, AI can predict disease trends in the healthcare sector by analyzing patient data and providing personalized treatment plans.

Taking enterprise applications as an example, IBM’s Watson Health utilizes AI technology to analyze medical data and provide doctors with accurate diagnosis and treatment recommendations. Retail giant Amazon utilizes AI to analyze consumer shopping data, helping merchants accurately predict demand and implement automated inventory management and personalized recommendation systems, improving operational efficiency and customer satisfaction. Additionally, in the financial industry, Goldman Sachs uses AI to analyze large amounts of transaction data for risk assessment and fraud detection, enhancing the security and efficiency of financial institutions. In manufacturing, Siemens uses AI to analyze production data for predictive maintenance, reducing downtime and improving production efficiency. In the transportation sector, Tesla’s autopilot system utilizes AI technology to analyze road and traffic conditions and, in conjunction with driver data, enables a safer and more comfortable driving experience.

Introduction of LayerAI

About LayerAI

LayerAI is a groundbreaking project combining blockchain technology with artificial intelligence (AI) to enable private, secure, and scalable transaction data processing. Utilizing ZkRollup Layer 2 technology, LayerAI aims to establish a blockchain network specifically designed for the data monetization of AI models. By leveraging the $LAI token, LayerAI seamlessly integrates AI commercial applications with a tokenization mechanism, reaching a wider audience through consumer applications. This empowers individuals to profit from their own data. The LayerAI ecosystem encompasses various applications, including LayerVPN, KyotoX, and Layer Marketplace, which facilitate data collection, processing, encryption, and packaging, further driving data’s commercial value and utilization.

LayerAI: Mission and Vision

LayerAI is committed to enabling individuals to own and leverage their data. Its vision is to establish a private, secure, and efficient blockchain network dedicated to data monetization for AI models. Through the $LAI token, LayerAI seamlessly integrates AI commercial applications with a tokenization mechanism, serving as a payment, governance, and incentive contribution medium. This empowers consumers to derive benefits from their own data. Additionally, LayerAI provides platforms like LayerVPN and KyotoX to support automated data trading, risk management, and compliance detection. With this comprehensive ecosystem, LayerAI aspires to become the world’s leading data monetization platform, ultimately contributing to transforming the global data and AI economy into a multi-trillion-dollar market.

Source: Layer AI Official Website

CTO: Introduction to Dejan E

Dejan E is the Chief Technology Officer (CTO) of LayerAI, leading the formulation and implementation of the overall technical strategy. He has rich experience in backend, frontend, and blockchain fields, and is proficient in technologies such as NodeJS, Ruby, Angular, Ethereum, Ripple, etc., and has a high interest in other modern frontend and backend technologies. He is good at developing in individual or team forms. In addition, he also has rich knowledge and experience in agile processes and personnel management and can improve the performance of the entire team in team leadership positions.

LayerAI Product Ecosystem

LayerVPN

LayerVPN is a Virtual Private Network (VPN) solution provided by LayerAI. Users can download LayerVPN, equip it with Data Capsule NFT, and earn reward tokens while browsing the web.

The advantages of LayerVPN include:

• Security: Leveraging encryption techniques, LayerVPN safeguards sensitive information during data transmission, preventing unauthorized data breaches
• Enhanced Privacy and Anonymity: By masking users’ IP addresses, LayerVPN provides a superior level of privacy protection
• Geographical Restrictions Eliminated: Users can access geo-restricted websites, unlocking a world of international content without limitations.

KyotoX

KyotoX is LayerAI’s decentralized finance (DeFi) platform, specifically designed to offer decentralized trading and lending for AI innovation projects. This platform assists AI startups with relevant financial products and services, fostering their growth and tokenization.

KyotoX’s key functionalities include:

• Decentralized Exchange for AI-oriented Tokens: This supports ERC-20 standard AI-oriented token trading and will integrate with the LayerAI main network for more extensive trading and interoperability.
• Lending market for AI-oriented tokens: Major AI-related assets can be used as collateral to provide lending services in a decentralized and permissionless environment.
• LP & Vesting tool for AI communities: This tool provides liquidity providers and asset lockup tools for AI communities, ensuring the safety and sustainability of assets.
• Decentralized launchpad: Emerging AI projects can launch their native assets through the KyotoX launchpad and integrate them into the Web3 economic model.

Layer Marketplace

Layer Marketplace functions as LayerAI’s native NFT marketplace dedicated to trading Data Capsule NFTs. These Data Capsule NFTs empower users to monetize their data contributions to the ecosystem. Users can buy and sell Data Capsules on Layer Marketplace, incentivized by the “Play-to-Earn” model, encouraging active participation.

Key features include:

• Data Capsule Trading: Facilitating the buying and selling of Data Capsules, transforming personal behavioral data into monetizable assets.
• Secondary Market Liquidity: This provides liquidity not only for existing users but also enables new entrants to acquire Data Capsules from established community members, deepening their engagement in AI2Earn activities.

LayerAI Layer-2

Introduction to ZkRollup

The “trilemma” challenge faced by blockchain technology refers to the difficulty of simultaneously achieving security, decentralization, and scalability. In simple terms, as the number of nodes (i.e., computers participating in verification) in a blockchain network increases, the network becomes more secure and decentralized, but the number of transactions it can handle per second decreases, leading to network inefficiency.

Ethereum has previously faced issues of network congestion and high transaction fees due to slow transaction processing speeds (approximately 15 to 45 transactions per second). To address this issue, a technology called ZK-Rollup emerged. It is a Layer 2 technology built on Ethereum, capable of enhancing transaction speed and reducing costs. It processes many transactions and computations on the blockchain rollup, and then submits a validity proof representing all transactions to the Ethereum main chain. This ensures all transactions are correct and valid while quickly updating the status of the main chain. LayerAI’s Layer-2 is developed using the Polygon Chain Development Kit (CDK) and employs the Polygon zkEVM to construct a Zero-Knowledge Layer-2 blockchain network based on Ethereum, significantly enhancing Ethereum’s scalability and efficiency through the use of zero-knowledge proof technology.

Advantages of ZK-rollups

• Faster Transaction Speeds: ZK-Rollup accelerates transaction processing by submitting proofs of validity to the blockchain, eliminating the need to independently verify each transaction.
• Asset Protection Without User Verification: ZK-Rollup does not require users to perform additional operations to verify transactions or protect assets, simplifying user operations and enhancing asset security.
• Improved Scalability: By processing many transactions off-chain, ZK-Rollup reduces the burden on the main chain, enabling the network to handle more transactions and thus enhancing overall scalability.

LayerAI ($LAI) Token Ecosystem

With an approximately $12 million market cap, $LAI is traded on centralized exchanges such as Gate.io.

Source: Tradingview

Source: LAI Price| Price Index, Real-time Chart| LayerAI on CoinEx

AI2Earn Economic Model and The Concept of Data Capsule NFT

The AI2Earn economic model is designed to incentivize user participation within the LayerAI ecosystem. This model encompasses three key steps:

• Users browse the internet using LayerVPN
• LayerAI captures, packages, and prepares digital assets (i.e., Data Capsule NFTs) for monetization
• Users have the freedom to choose how and where to monetize their data

Through this approach, AI2Earn not only provides a superior user experience but also expands the user base by rewarding users for browsing the web using the VPN.

Functionality and Value of Data Capsule NFTs

As a core component of AI2Earn, ‘Data Capsule NFTs’ are unique digital assets that allow users to contribute data and earn DATUM reward tokens through their internet browsing activities. These NFTs store user behavioral data and can be monetized within the LayerAI ecosystem.

Large technology companies like Google, Facebook, and Amazon have already proven the immense commercial value of leveraging user data. By collecting, analyzing, and applying user data, they can gain deeper insights into user needs, provide personalized services, and deliver targeted advertising, significantly enhancing user experience and business outcomes. Now, LayerAI empowers individual users to establish and monetize their own data in a similar manner.

Each Data Capsule NFT has unique earning power, lifespan, and other characteristics, which determine its trading value and attractiveness on Layer Marketplace.

$LAI Token

The $LAI token is an innovative multi-value gas token that derives its value from validator staking, cash flow generated from core products, and fees for activities like buybacks, burns, and yield expansion. This token design makes it an integral part of the ecosystem, with the following key features and utilities:

• Staking and Rewards: Users can stake LAI tokens to participate in network validation, ensuring transaction security and stability. Stakers lock up their holdings to maintain network operations.
• Network Validation Discounts: LAI token stakers enjoy discounted rates across the ecosystem, particularly when purchasing data on the LAI Data Marketplace, promoting mass circulation and locking of tokens.
• Liquidity and Decentralization: LAI ensures transaction censorship resistance and enhances monetary liquidity within the data economy as a decentralized gas token. Additionally, miners and buyers can access instant liquidity using LAI for transactions and reduce the costs of converting to other currencies.

Staking Mechanism

Staking LAI tokens is one of the most valuable actions within the LayerAI ecosystem. Staking contributes to network security and stability and presents opportunities to earn Data Capsule NFTs. Moreover, LAI token stakers enjoy the following privileges and functionalities:

• Treasury Control: Stakers can participate in governance through DAOs to decide how to utilize funds in the ecosystem treasury. These funds primarily stem from ecosystem revenue
• Buybacks and Burns: DAO members can vote to use treasury funds to buy back LAI tokens from the open market or burn purchased LAI tokens, helping to maintain token market value
• High Yield Distribution: Stakers also have the opportunity, through DAO voting, to use treasury funds to purchase LAI tokens on the market and distribute them to stakers as staking rewards, incentivizing further participation.

Analysis of LayerAI Application Scenarios

Driving the Data Economy and DeFi

• Data Capsule NFTs: Users can monetize their behavior data through Data Capsule NFTs and sell it on the Layer Marketplace, benefiting from personal data.
• AI2Earn Model: This model encourages data sharing by allowing users to participate in the LayerAI network, contribute data, and receive reward tokens.
• KyotoX DeFi Hub: Provides a decentralized trading and lending platform for AI-oriented tokens, allowing investors to engage in financial activities in a secured environment.
• Staking and Liquidity Provision: Users can stake LAI tokens for profit and participate in the governance of ecosystem funds, enhancing token liquidity and stability.
• Layer-2 Solution: Utilizes zkRollup technology to enhance transaction speed and efficiency while protecting privacy and resolving mainchain scalability issues.
• Data Ownership and Network Benefit Sharing: Users have control over their data usage, ensuring both privacy and ownership. By integrating AI and blockchain, a shared economic model is established. In this model, both users and developers partake in the added value of the ecosystem.

Conclusion

LayerAI envisions building a private, secure, and efficient data monetization platform, empowering individuals to own and use their data. It offers a range of opportunities via its diverse product ecosystem. This system enables users to engage in the marketplace with their data and encourages them to contribute and share data through innovative economic models.