The DePIN sector is emerging as the next frontier of blockchain, connecting physical infrastructure to digital networks. Token2049 At Singapore, BeInCrypto spoke with Markus Levin, co-founder of XYO Network. His vision is focused on enabling AI and Web3 applications to access verifiable real-world data.
After seven years as a decentralized data company, XYO recently launched its own XYO Layer One blockchain. With more than 10 million nodes in nearly every country, the network grapples with location verification challenges, data verification bottlenecks, and prohibitive costs, among many other data processing issues inherent to holder blockchains. Levin’s ambitious goal is to position XYO Layer 1 as the definitive blockchain for AI-enabled data infrastructure.
XYO recently launched the XYO Layer 1 blockchain. After 7 years of operation, what motivates you to build your own Layer 1, and what fundamental gaps in the existing blockchain environment does it address?
XYO has been a data infrastructure company in the blockchain space for many years. Our middleware technology connects the physical world to digital systems and other blockchains, providing verifiable data through innovations such as proof of origin and location.
But during that time, no one really built Layer 1. >With the rollout of a dual token model (one for governance and one for utility), how do you envision the balance of incentives between node operators, developers, and enterprise clients in the ecosystem?
We built a dual token model between the 7+ year old XYO token and the newly released XL1 token, with both reinforcing each other. This is called “Yin and Yang.” XYO is outside layer 1. This is for staking XYO Layer One for DePIN, ecosystem, rewards and contributor rewards, security, governance, and more. This is a governance and DePIN network token that allows you to stake on XYO Layer 1 and earn XL1 tokens. The XL1 token is always internal as it is the gas and transaction token for the dApp within XYO Layer One. Bet XYO and win XL1. XYO already accounts for a small percentage of total supply, and we’re very excited about the growth we’re seeing there. This limits the supply of XYO. Then, on the XL1 side, we see that when a transaction takes place on the XYO layer 1, the token is consumed because each transaction consumes a gas fee. So basically both tokens reinforce each other.
The AI, logistics, and real-time data analytics industries are highlighted as key beneficiaries of XYO technology. Can you share an example of a recent industry pilot or partnership that leveraged the capabilities of XYO Layer One?
We recently announced a partnership with a Korean company called Piggycell. The company has a 98% share of the mobile charging market and is a Web2 company transitioning to Web3. Charging stations are available at bars, restaurants, and convenience stores. We are committed to providing location proof to charging station and device users. This helps prove that the charging station is where it’s supposed to be and that the user didn’t run away with the charging cable. We also plan to tokenize the data generated there.
How does XYO’s approach to verifiable real-world data overcome the limitations and reliability concerns of centralized location solutions and other blockchain oracles?
Below is an example from the Pokémon Go game. I had several calls with its manufacturer, Niantic, and the problem was that a bunch of kids were sitting in their basements, spoofing their location, and pretending to be in the Sahara desert to get the rarest Pokemon. This destroys gameplay for fair players.
This is just a game, but think about things that are more valuable, such as automated supply chains, smart cities, and self-driving cars. You want to make sure your location can’t be spoofed or mass spoofed, and we’re here to help. Do the same for other DePINs. For example, you can prove that a weather station that says it’s on your roof is actually there and not somewhere else. For us, it’s all about collecting data to provide certainty and prevent identity theft and hacking. For example, you can prove that the data comes from a temperature sensor or a location sensor.
XYO boasts over 10 million nodes worldwide. What are your current priorities for increasing developer engagement and encouraging long-term participation in the ecosystem?
There are over 10 million nodes in almost every country. When we looked at all these nodes, we found that they also exist in all African countries. Currently, there are approximately 500,000 nodes in Africa. DePIN is transforming the world. We are motivated to collect data from underserved communities to prevent bias in AI.
For example, we have translated our website into many languages. One of these was Amharic, the main language of Ethiopia, which has about 57 million speakers. ChatGPT made a lot of mistakes in translation, and we were curious as to why. That’s because Ethiopia is not a priority country for ChatGPT and it’s not where they make the most money. However, we believe it is important for data collection. For AI to truly be the voice of humanity, it must avoid bias.
What feedback have you received from the existing COIN app user community regarding the transition to the new layer 1 blockchain? How are you addressing their needs during this evolution?
The COIN app has a new feature that allows you to stake COIN (points earned from using the app) for XL1. We have a campaign and people are loving it. When there is a financial incentive, they get excited about it. The main staking is from XYO to XYO Layer 1 to earn XL1. People have realized that they can bet on COIN apps. You then realize that you have XYO because you exchanged your COIN points for XYO. To show them what they have and to educate them.
XYO is the original DePIN project and currently sits at the intersection of DePIN, DeFi, and AI. What ambitious milestones and use cases are you aiming to achieve in the coming year? How will these strengthen XYO’s role as the data infrastructure for the digital economy?
We want to become the blockchain of AI data. We have onboarded our own DePIN network and are offering further features to enable this. Secondly, because we already represent 10 million nodes and can generate so much data, we will leverage third-party partners to bring more companies into the XYO Layer 1 ecosystem. We are embarking on the next revolution in the world of data. That is our big mission. It’s an exciting time to join DePIN. According to the World Economic Forum, DePIN will grow from approximately 50 million to 3.5 trillion by 2028. This is going to be significant.
The way forward: Building a data economy
Blockchain is evolving beyond finance. XYO’s Layer 1 infrastructure represents a strategic bet on verified data as the foundation of an AI-driven economy, with more than 10 million nodes deployed worldwide. The DePIN sector is expected to reach $3.5 trillion over the next three years. The company positions itself at the intersection of three innovative technologies.
The challenge ahead is to translate this first-mover advantage into sustained developer adoption and corporate partnerships. XYO’s seven-year journey has gotten a head start in a race that has only just begun.
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