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Network economics
The machine economy needs a machine centric economic model in order to flourish. Current efforts have only tried to make it work on top of our slow, legacy financial systems. The economy needs to benefit all stakeholders and enable self-sufficiency for machines.
In order to achieve this, the peaq network comes with novel macro- and microeconomic mechanisms, creating a machine-centric, self-sufficient economy that aligns the incentives of all stakeholders. The network is designed to create an infinite loop of value growth for the machine economy and its participants.
Creating a loop producing a self-perpetuating increase in value
peaq network flow
Liquidity gets provided to a peaq/USDC Liquidity Pool (LP) which results in minting machine NFTs (1).
Machine NFTs represent ownership of a pool of machines - Decentralized Machine Ownership (2). We choose to start with a pooling of machines in order to minimise the risk of individual machines failing to generate adequate returns. Further down the line, we will also enable individual machine ownership via NFTs for highly economical efficient machines such as robo-taxis.
Liquidity then gets provided from the pool in order to subsidise the adding of new machines and create their SSIs in order to be added to the network which incentivises individuals and organisations to add more machines (3). Which machines get subsidised is voted on by the LP NFT holders. Once the new machines and their SSIs are added to the network, they get linked to the Liquidity Pool. A percentage of each transaction fee that a machine pays when offering goods & services gets invested via yield farming and staking in the Web3 DeFi ecosystem. This can be compared to paying taxes in a regular economy. Machines then receive a share of the generated yields in order to fund their own existence on the network and pay for transaction fees and other services, thus becoming self-sufficient. (4)
By staking NFTs users and organisations earn APY in the form of $PEAQ (Repurchased with USDC) (5 & 6). Furthermore, validators are incentivized to add new machines and SSIs to the network as they receive free tokens when becoming a validator that only get unlocked when adding a certain amount of machines to the network within 18 months (7).
The above described mechanisms serve the Economy of Things to maximise provided liquidity, returns for investors, incentives to add new machines to the network and enable the peaq network to be financially sustainable.
Network stakeholders can expect the following benefits;
The Community/Users can become part of an ecosystem and have their commitment rewarded. They can provide resources and actively earn money from the network. In a dystopian world view, people would at some point only be consumers of the machines owned by a handful of large corporations - but with this economic model, they earn money from their own use of the machine economy. The more they use the machines, the better off the machine economy is and the better off the people are.
Investors can earn money in the long term by providing liquidity at the outset. The more the network is used the more they will earn. With this type of investors approach the money stays in the network. Investors are incentivised to keep money in the network and add money to the network.
Machines can become part of the economy without having to be continuously fed financial resources. In addition, you can hold NFTs yourself and sell data on data marketplaces for example, to generate even more returns. You can also buy tokenized stocks of companies you will work for in the future. Der Anschaffungswert
Machine Manufacturers can sell their machines directly to the end-user, which are among other things incentivized to use them, for example, to set up an entire ecosystem and even after sale still earn through NFT ownership on the use. It also allows manufacturers to offer their products for free and still get paid in full.
The status quo can thus be turned upside down and multiple shortcuts can be taken for the enterprise and society as a whole in the quest for an economy that works for everyone involved.
Last modified 1mo ago
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