XYO Network grows to 10 million nodes with Layer 1 launch

0:01I'm Ashan Addison from the Cryptocoin Show and today on blockchain interviews we have back with us Marcus Lean, co-founder of XYO here to talk about DPIN, decentralized physical infrastructure networks and much more in blockchain. Marcus, welcome back to the show. Thank you for having me again, Ash. It's very, very cool to be on the show with you again. Yeah, I've been

0:22following XYO for seven years now and I think people have only really heard of DPIN in the last couple years. your team was way ahead of the curve in understanding where the world was going to be going and we can talk about how how blockchain and AI fits into all of this as well. I would love to start out with sort of a high level on what you and your team have built at XYO, how it

0:46relates to the broader DPIN ecosystem and then we can dive into all the latest details. Yeah. Yeah. As you might recall in like 2018 when we were first on the show like thanks for supporting us you know for the last seven years actually pretty insane you know anyone who saw the videos back then from Ashton had had had suits on and then it was different

1:08Ashton you know now it's like very evolved I think and it's it's exciting to to to be here again and XYO we also we have evolved uh over the last seven is a little bit. You know, we started out with proof of location. You know, we said location gets easily disproved or hacked, right? So, we need to do something against it as as more and more uh location becomes more relevant. And

1:36uh we uh then created a network of IoT devices where those devices do cryptographic handshakes and proof each other's proximity and and this way you get uh certainty around location and then you get a relational map on and you can use that for smart cities instead of driving cars and automated supply chains but also for gamefi or bringing games from the virtual world into the real

2:05world like a digital experience and and and many many things and then over time we realized that that that's where the evolution comes in. We realized that we are good at really collecting other data as well you know and so we started to collect sensor data like temperature sensor data for example but also offline data like point of interest data let's

2:28say restaurant or cloud photography and you name it really anything which was needed and then we uh we validated and verified that data and then you know connected it with smart contracts or or gave it to to companies and and also then we had 2018 we only had IoT devices. You know, you might recall these Bluetooth beacons and some other things and today we still have IoT

2:57devices but most of our nodes deepen nodes are uh mobile based. Uh we launched an app uh it's called coin can download it on coinapp.co which allows you to just uh become part of the x network. And the basic function in there is geommining in the app which is basically uh uh validating uh location data. But then there's many many many other things you can do in the app like

3:24collecting point of interest data for example. And uh and this way you can earn points which you can exchange for XY. And uh today we we have more than 10 million nodes uh in our deepen network uh which makes us you know one of one of not the largest deepen network uh out there. Mhm. Wow. It's uh it's come a long way and 10 million nodes is amazing to see. I feel like we're so early in

3:52deep pin. It sounds like a great number, but I'm thinking that should eventually get to hundreds of millions or or billions. You know, everyone has a device. Yeah. Yeah. Yeah. I think you you're right. You know, like deep in is is growing like crazy. You know, as as you said, nobody talked about deepin uh you know, a few years ago that in 22 I think Misari coined the term deepin and

4:18and since then it it goes bananas. and and just in the beginning of June there was a report from the world economic forum rich mentioned there about 1,500 deep project a 50 billion market and the world economic forum forecast is going to be a $3.5 trillion market in 2028 that's going to be it's in three years you know it's just absolutely insane numbers and if you think about that and

4:44and so we are just right there you know we as the first deepen launch in in 2018 and and uh we we built a very sustainable business model and and project and uh have an amazing token and and so it's just uh uh we are positioned pretty well to to take uh opportunity of of this trajectory. Mhm. Yeah, that's really exciting. 3.5 trillion uh from

5:13from 50 billion. That's like almost the size of the market cap of of all of crypto. It will probably surpass crypto if everybody has a device and they're contributing to the networks. Um and and that's like in such a short span of time. Uh I feel like there's some viral applications and I feel like the barriers to entry are on the technical side are much lower. If you're if

5:38there's already 10 million nodes and you just need to download an app, I feel like people if they've never got involved in DPIN, maybe they have a hard harder time understanding exactly what it is. But once you get the app, start contributing whether it's location, data, weather, noise, things like that from your device and you're earning from it. Once you start earning, I feel like

6:01they get it. Yeah. Yeah. You're right. I mean it was an evolution for us to understand that you know in the beginning our IoT devices were were a little complicated you know it was targeted to crypton nerds like you and me and and then in in 2018 only 2% of the US population touched even even crypto before and today it's 25% so it's a lot a quarter but it's it's the addressable market

6:31is has grown but to concentrate only on the crypto community for deepen is it's just not good enough, you know, and we realized that at at some point we said we need to grow, but it's it's extremely hard to to do this within the confines of of the crypto community. And that's why we launched that up to make it like super easy. and we tweaked it over the

6:52years and and today uh more than 80% of the users who come newly into the coin app are non-crypto users while 95% of them redeem their points for XYO but they also can redeem their points for like airports and and Nintendo Switches and sweepstakes entries and stuff like that and but they choose crypto and so we onboarded millions into the cryptosphere and the way we do That also

7:21is you don't need to have a wallet. You can have a wallet and and send your XYO to that wallet, but you can also just open a Coinbase account and send your XYO to your Coinbase email address. So if you are not a crypto person, you don't want to deal with custody and self custody and things like that, then uh we make it very very very easy for you. And

7:43uh I think that's key uh for for adoption for deep and crypto as a whole is that we allow uh for really really amazing and easy user experiences where you know when my grandma can also you know be be a part of this. Definitely. I'd love to see my grandma contributing to the top DPIN networks. Uh and it will likely happen, you know, before she

8:10fully understands Bitcoin. Um because so uh and you mentioned gaming earlier on and the applications that location data can use for gaming and I feel like the coin app itself contributing and then rewarding it almost is like a game in a sense. Um, can you talk about, you know, the broader gaming ecosystem and how DPIN fits into that? Yeah. Yeah, we we

8:34have a really amazing partnership with metaverse game called Upland. It's basically a Monopoly in the U Monopoly Metaverse, which has uh properties from the real world in in the metaverse, and you can buy them and trade them and and have some gameplay on on top of them. And so you're planning to uh bring that gameplay into the real world with them. So when you go to a certain address or

9:02you go to a certain I don't know to the Eiffel Tower for example, you get the right to buy the Eiffel Tower maybe and and and stuff like that and that changes your game play inside the game and you can earn special NFTTS and and so on and then can have real world treasure hunts you know but you have the benefits inside your game for example and and the

9:25same way we are talking with companies in connected clothing space, you know, where you, for example, have a chip in a collar, right? And we can prove that 10 joggers are together there, right? They talk together and uh and because they did it together and so on, they they get something at the end, right? And and they earn some NFTs, for example, or

9:48some something on the leaderboard, some points and whatever. And uh and uh that's uh this is it's a huge market I think you know because uh you can do fan engagement for example and and so on but then you can do RWA or connected tokenized reward assets you can uh also interact with and for those interactions uh you can first prove that you were in

10:17proximity of something and and that might give you Mhm. Yeah, it's really interesting. The possibilities are like endless once you start adding in fan engagement and uh lo data. And you know, I've played some games in the past on my phone where you actually had to be at the location. It's like Pokémon Go, these kinds of things. And I know it was possible to spoof the

10:42location. Uh and you can just use like these GPS spoofer apps. They're right in the app store. and you can be like, let's just go to Paris and uh and fight fight fight the monsters there. I feel like um there is a market for ensuring like using blockchain and decentralized networks to ensure that the location you're in is the location you're in when

11:02there's money on the line. You're absolutely right. It's first I had three calls with meant you know with the make of Pokémon Go in 2018 and 2019 and they were not quite convinced that we can solve their problems and uh I I wish they would have and we also had courses Yelp for example because Yelp had a problem with fake reviews we said oh we can make location verified reviews so

11:26you can prove that someone is really at the restaurant you know that they're there for two hours and not for eight hours you know or if never been there and and uh and uh and and stuff like that and uh I I think it's it's going to be very very very valuable in in the future to to to prove these things you know and then if you think what I mentioned like tokenized real world

11:50assets you know they they're going to be even bigger than than deepen or deepen is a subset often of tokenized real world assets but standard chartered says that market is going to be a $30 trillion market by 2034 and and so everything is going to be tokenized, you know, like your bicycle and and your apartment rental and and everything is tokenized, right? Or your solar system

12:17in in the desert somewhere in in in I don't know, in Ethiopia, for example, and and you can participate and and own some of these assets, but you also need to prove that those assets really exist, right? So you need to collect that data somewhere and then once that asset exists you need to bring it on chain and and you need to uh then like proof where

12:40it is but also if it's moving and and stuff like that and and you can do that with deepin and you can do that with expire for example and I think that so that's going to be even bigger than than than games over the years. Yeah, I feel like something that's going to be really huge is these autonomous cars, self-driving cars, and the fact that you have to prove their location and also

13:04they're going to have a wallet to transact. You know, we've seen the announcements this month with the Tesla cyber cabs and the robo taxis. People are starting to drive around in uh US and I feel like that's going to change the game because there are a few self-driving cars. they're not connected up to decentralized networks yet. Um, and but then they're not that abundant,

13:26but with this Tesla software upgrade, I feel like everybody who owns a Tesla will now be able to make their car into a node and let it drive itself. Um, what do you think about the autonomous driving and how that could fit into deep pin? Yeah, I I think uh it's that is absolutely amazing because in the end, you know, like you use your car, the the average American uses a car 3% of the

13:53time. It's a huge waste of resources while it's usually the second most expensive purchase we make after our house. And uh and uh so imagine you can use your car 90% of the time and in a node network where your self-driving car drives around itself and it it goes and charges itself somewhere and and then you still use it for the 3% you usually use it and and suddenly you have an

14:18asset which earns your return versus right now if you buy a car you drive off the lot it loses half its value basically and and that's really amazing I think that We we deepen allows it that we have assets which are underutilized. Be it our computer and the storage there or the compute power or maybe our solar we we we create extra energy uh that deepen allows you to basically sell that

14:48extra extra capacity uh and you earn a return of your assets and either they become cheaper for you or you earn that return and Mhm. I think that's amazing and that's going to be big part of that transformation to this new DPN RWA world where uh where basically we shift uh to to to a world like that and then on the location part specifically I think uh

15:15it's important you know yeah cars can be hacked and you know if you have an autonomous car that can be pretty dangerous and And so you want to make sure that you have a high degree of certainty that the location of of a car is correct. If you especially if you think about something like self-driving ambulances also and things like that and then even further if you think about

15:40smart cities you know in a smart city you want to optimize the traffic flow for example and make sure that you know the red green phases are optimized so you don't have traffic jams or uh that parking meters automatically charge your car and give you a ticket maybe if you overstay when when you're there and or that you negotiate right ofways on an intersection maybe you don't need stop

16:01signs anymore or you just negotiate the cars negotiate themselves and who goes first and and for that you need uh uh sensors and blockchain and deepen and and of course location certainty. Yeah, it's incredible to see all these factors and how that's going to play into autonomous cars and um and I feel like it's going to come soon. you know, as

16:27you said, 2028 from the World Economic Forum numbers. In like 3 years or less, it's going to be trillions and trillions u of dollars in market cap from just billions. So, I feel like there's going to be something like autonomous cars or I know hand uh you know, person robots and think that's going to come eventually as well. Uh but like getting all these different devices on chain, I

16:50feel like it starts with the edge devices with the mobile phones connecting up. Everybody has at least one phone, probably a few laying around and those could be used to monetize. If they're just sitting there, you know, we probably use it more than 3% of the time. Like then we do cars, but there's a lot of devices sitting around while we're sleeping. That could be earning.

17:11Yeah, you're absolutely right. Yeah. And our users uh use uh our app more than 3 hours a day in the foreground. You know, that's more than all social media apps getting combined usage. And that's the average. And there's people who go to 7 8 hours. It's absolutely crazy. And and I think that's what's happening there, right? That you don't use your phone

17:34that much, you know, and so you you use it to earn. And we have big groups of drivers like truck drivers and Uber drivers and so on which use the coin app on the phone to earn uh something on the on the side and be part of this ecosystem and and the community and it's great you know because you drive around anyway and you have your phone anyway you know why not earn some money

17:58on the side and maybe you learn something as well. Yeah. And I I had this amazing experience. is I was in Australia. Uh I was talking at a conference there and after I was uh talking someone came to me and and thankked me and invited me to lunch and and he told me he is a retired truck driver and he retired because of coin. He became part of our community in 2019

18:26and sold some XYO at the right time and was able to have even $400,000 which he invested into a friend's business and wow it was insane and and this was just a elderly truck driver and truck drivers don't earn that much money and so they don't have often of not the a good retirement you know and and there was really really amazing to hear that and it reminded me we did a case study in 20

18:5921 and we did one last year where we checked that how well did our top 500 users for example do and forgot the exact number I think it was our top 500 users 13 million together and they were just lucky because they cash out at the right time and and you know our token as as most of crypto goes like this you know and generally it's like it's an up trajectory but it's a it's a crazy swing

19:26up trajectory and so like in December we had a $500 million market cap and today it's around 200 something and and so um when you are lucky and you cash out at at the right time uh you know that can be transformational and we have this one person he was able to pay off his mortgage for example and someone house went on a 20 year late honeymoon and then someone else finally bought a

19:54car after whatever long time and and these are just great stories and I think as that is going to happen to to more people you know it's and more people talk about it uh maybe the conversation is going to shift from like oh I got so much money out of memes you know and what's lucky in memes is people will say oh I actually earned something I contributed to society and I earned

20:18money and it actually changed my Those are really nice uh stories to to hear. You know, these people, they probably don't know a a lot about trading in crypto, but they know about contributing and earning from their phone while they're doing work that they were already doing if you're driving a truck around. So, that's great. I'm going to make sure that we leave some

20:38information about the coin app also in the show notes because I feel like a lot of people are want to check this out and test it out and get involved. So, I'm gonna make sure we do that. Um, I I have a question about, you know, the blockchain side of this with so many different nodes and all these different transactions happening. Say you're gathering location data. Does all that

20:58go on chain? And, you know, speaking of like a blockchain like the Ethereum chain, you know, there's cost to that. How does it work with X YO's deepin network and ensuring that the transactions are are on chain and that it's fast and cheap? Yeah. Yeah. Yeah. what you speak about is a huge problem uh for crypto. I think data be a data project, right? And data there's no real

21:24data layer one. If you think about Ethereum, if you if you want to save even an image there uh you know it's going to cost you tens of thousands or maybe hundreds of thousands of dollars. Even on Salana, it's extremely expensive in thousands of dollars. And so it's it's forbidding to do a lot of data. Most uh most layer ones, layer twos are made for transactions

21:50and uh transactions alone. And uh we for the last seven years we we wrote our data onto certain databases like IPFS for example and and then we we wrote some data subsets of that data onto Salana or Ethereum or or other chains. And and the way it works for us, we have like a a tangle of data for example. So um and that that tangle basically we

22:20save and then we write something onto onto Salana for example. And and the problem is uh it's just not made for data. So it's it's very difficult. And so for the last seven years we we avoided it but uh we decided to launch our own layer 1 blockchain which is called XYO layer 1 which going to be a very data centric layer one. So it's about data storage but also the

22:46certainty of data and providence and that you can also do data analysis and and a lot of other things which you can't do on on other layer ones and layer twos and and also the XO layer one is going to be the the uh origin or place of truth for all of our data. So the data uh is going to be saved there first and and then it's going to be put maybe on Solana and then other trains

23:13and this way uh uh yeah we think we're going to show something really amazing. We have so much data and so many nodes. So once we launch people will be easily with seeing what we are doing and and I think a lot of datari uh projects will come and join the xio ecosystem be it in deepin or gamefy or rwa and AI and other data

23:41uh heavy things and we're very excited about it. It's the launch is is imminent. be in tested right now and uh the mainet is probably going to launch in Q3 and with it we're also going to launch a new token called XL1 and that XL1 token is basically internal gas token to the layer one so it's for transactions and and gas and and and other internal things and then we have

24:10the XYO token which is uh for our deepin rewards and deepin ecosystem and for staking and and governance. And we think a lot of the XYO is going to be locked up soon to be staked in the XYO layer one to earn uh XL1 and and it's going to be exciting time and and then XL1 a lot of that is going to be burned through the transactions in the in the uh in the layer one and and

24:39so uh we have an exciting time coming I think uh for both of of those tokens and in general with the launch of the layer Yeah. No, that's very exciting, Marcus. It's a a seven-year problem that the team is finally solving. Um, and it only makes sense, especially uh if we're heading on this trajectory that the World Economic Forum is saying, exponential growth. Uh, you don't want

25:02to run into an issue where there's 100 million nodes and then it's slowing down the network. Um, so from the perspective of the users of the the coin app and other uh nodes and edge devices that people are tying into the deep pin network, how does the launch of the the XL uh one, how does that change from their perspective? So, do they actually earn more or now they're actually able

25:26to stake the XYO into onto the layer 1 while they're earning? Yeah, it's two things. So, so the XYO they earn they will be able to stake in the XYO network into the producer and the valid data notes and also there's something like like a community pool. So there's three ways to to stake the XYO and and that will give you the XR1 tokens and uh and for the earning uh we

25:56think uh there will be a lot more demand partners coming onto our network. Right now we have dozens of partners already and as you know we make more revenues than FCoin and they can prove it because we file with the SEC since uh a while and and have audited financials that's all and and so uh we think many many more partners are going to come and with

26:20more partners there's going to be more earning potential on on the deep nodes and the deep nodes are you know the phone and and devices like this NFC card here Cool. Cool. And um and uh yeah, so there's more more ways to earn uh for XYO and XL1. And the XYO uh will be locked up or a lot of it will be locked up uh to earn XL1.

26:49Very exciting. And with the expansion to the layer 1, you're talking about different applications come online as more revenue generating opportunities available to collect new type of information tied into the deep pin networks. So how easy is it for developers and and people that want to make apps to build it on top of XYO? Yeah, so for the XYO layer one, it's

27:15going to be extremely easy. you know our team makes wants to make sure that web two companies as well can can join and so there's JavaScript and API integration which any developer that knows well and and so it will be very very easy to come and and on our network and then on the on the data request side for example it's it's very easy as well we have a system

27:45where you know you can have certain requests certain tasks you know we can our nodes can collect the data on demand for example where you say I want to know all the ATMs in Manila you know can you guys collect the data for me and and then we just send that task through the network and you know our nodes go and and collect that data for example and uh

28:07that system is in place and we work with some partners already are using that system but I think it's it's going to grow a lot over the next few years Mhm. M and you mentioned that the test net's happening and the the layer 1 main launch is is imminent. What are the things that people can do to test the test net, get involved in it and sort of be there for day one when the layer 1

28:31launches? Yeah. Yeah. Go onto our website xyo.network network and there is a there's a link there button big button uh that you can join our our test set and we'd love for you to be there and to test and you know obviously uh uh we we love active community so there is good things are going to happen for the people who help us it's very exciting I'm looking forward to it looking

28:56forward to the explosion in deepin growth and market cap and glad to see XYO still growing It's we were here at the very beginning on our our first interview seven years ago. Did one three or four years ago as well. Now it's expanding and the world is catching up to X YO in DPIN and 10 million nodes is a great start. I have a feeling like it's going to be 10 to 100x that size.

29:21But congratulations on the success so far Marcus. Appreciate your insights into sort of deepin and these different ways that people can earn from their phone. what's going to happen with other IoT, smart devices, autonomous vehicles, and everything else as it gets onchain. And I would love to follow up again in the very near future to hear more about

29:41the layer 1 when it launches and how else people can contribute. Yeah, I'd love that. Thank you, Ash. Thank you. It was great.