Interview with IoTeX CEO Raullen Chai: Cryptocurrency Can Only Become Mainstream by Connecting to the Real World
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Interview with IoTeX CEO Raullen Chai: Cryptocurrency Can Only Become Mainstream by Connecting to the Real World
If cryptocurrency is to truly become mainstream technology, it needs to establish an interface with the real world. IoTeX aims to build this interface to enable seamless connectivity between cryptocurrency and the real world.
Navigating Web3 tides with focused insightsInterviewer: Sunny
Editor: Min
Background
Since the crypto research firm Messari released an industry report on DePIN in January this year, the debate over whether DePIN is merely a bear market narrative has intensified. According to the report, Decentralized Physical Infrastructure Networks (DePIN) refer to networks that use token incentives to crowdsource and build real-world physical infrastructure.
To gain deeper insights into the development and value of DePIN since 2017, we invited Raullen, a veteran in this field, for an in-depth discussion.
Raullen is the founder and CEO of IoTeX. Before founding IoTeX, he led Uber's encryption R&D division, served as a Technical Lead for software engineering at Google’s headquarters, and worked as an engineer at Oracle. As early as 2012, Raullen began working in the field of encrypted IoT, serving as a researcher in cryptography and privacy and security for IoT at the University of Waterloo in Canada.
During our conversation, Raullen shared IoTeX’s journey of trial and error in finding its strategic direction, as well as its collaborative efforts with other industry leaders to help define the path forward. As a bridge between the crypto world and the real world, IoTeX has actually shaped the entire industry—terms like DePIN have evolved directly from its work.
Key Highlights
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If cryptocurrency is to become truly mainstream, it must interface with the real world. IoTeX aims to build this interface to seamlessly connect crypto with reality.
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DePIN has a much higher barrier to entry than DeFi. For DePIN, you can't simply fork an open-source DeFi protocol; you need to develop hardware, communication technologies, blockchain systems, mobile apps, and more—all highly complex. Unless you can raise substantial funding and assemble a capable team, it's hard to deliver a compelling project.
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Ultimately, DePIN may end up embedded deep within a technology stack. For most ordinary users, there will be multiple layers they don’t even need to perceive.
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My personal philosophy is that we should focus more on building infrastructure and lowering the barriers for developers so that more people can participate, experiment across different domains or ideas, and ultimately some truly disruptive innovations may emerge.
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When upgrading Web2.5 products to Web3, we can ensure transparency, reliability, and decentralization in the intermediate computation process, helping projects solve this issue so their logic can be better applied.
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We want to make the world better: DePIN and distributed technologies might be a great starting point.
The Evolution of DePIN Through IoTeX
TechFlow: Could you describe IoTeX’s journey, including its past, present, and future direction?
Raullen: IoTeX is actually quite an old project. At the end of 2017, three co-founders—I, Jing, and Qevan from Facebook—founded IoTeX. Our primary goal was to build an IoT blockchain at the technical level, but more importantly, figure out how to better connect cryptocurrency to the real world. We realized that if crypto is to become truly mainstream, it needs an interface with the real world. Therefore, we’ve been dedicated to building this interface to enable seamless integration between crypto and reality.
In early 2018, IoTeX successfully raised $30 million from top-tier venture capital firms. We then assembled a team, drafted our whitepaper and vision, and began building our Layer 1 blockchain.
At the time, the intersection of IoTeX and blockchain had many uncertainties, so we decided to start from the foundational layer. We chose Layer 1 because it was relatively mature and seen as the cornerstone of the entire blockchain infrastructure.
Over the next three years—from 2017 to 2019—we focused on developing our Layer 1, a POS-based EVM public chain. Once completed, this chain hosted around 200 DeFi and NFT projects.
In 2020, we began seriously exploring how to integrate blockchain with the Internet of Things (IoT). IOTA had introduced this concept earlier but faced challenges with micropayments. So we decided to reevaluate the way blockchain and IoT could be combined. In this process, we conducted two vertical experiments to find better solutions.
The first experiment focused on integrating IoT and blockchain around privacy. We realized that data generated by devices could belong to users via decentralized identities (DID) on the blockchain and potentially be monetized in the future. Thus, we launched our first experiment—an intelligent home camera product called Ucam. This camera was fully integrated with our own blockchain, giving users ownership of all footage captured.
However, when we brought this product to market, feedback was lukewarm.
We discovered that especially regular users cared more about cost. To them, the difference between spending $40 and $50 on a camera was significant. Later, we realized that privacy protection wasn’t particularly appealing to these users. For example, if a camera costs $40 without privacy features, but $50 with them, most users wouldn’t see the extra $10 as justified.
Thus, while we sold tens of thousands of units, this camera wasn’t our core business. But the experiment showed us clearly that privacy is not currently a top concern for IoT users.
Then we started our second experiment—launching a product called "Pebble Tracker." It was a tiny open-source hardware GPS tracker equipped with additional sensors to monitor speed, orientation, air quality, humidity, light, and more.
We promised that this tracker could be used for DePIN and token mining, and we listed it on CrowdSupply, the largest hardware crowdfunding site in the U.S.
Within just two weeks, we sold 2,000 units and earned $200,000. The money wasn’t our main concern, but the result gave us important insight. We realized what users truly cared about: using the device to contribute data and earn passive income from mining.
The idea of generating passive income is extremely attractive to users.
At the time, Helium was also doing well, selling devices to build LoRaWAN networks. Other companies had similar ideas, such as Borderless’ Hi-Fi and Multicoin’s Proof of Physical Work—very similar concepts.
Back then, we believed this concept should be called "MachineFi," because "Machines" provide utility, combined with the DeFi (decentralized finance) framework. So we coined the term "MachineFi," which later evolved into what the industry now calls DePIN.
This actually set the course for our work in the following years, and we continued moving in this direction.
TechFlow: What was the most scarce component in DePIN at that time?
Raullen: We visited many DePIN projects and found numerous pain points because DePIN is very different from DeFi.
DeFi is relatively simple. Even a beginner developer can fork a contract—say, from Compound or Uniswap—modify it slightly, add a frontend, and launch a project quickly. That simplicity fueled innovation in DeFi.
But DePIN is much harder. You need hardware, communication tech, blockchain, mobile apps—the whole stack is complex. Without raising significant funds and assembling a strong team, it’s nearly impossible to build a satisfactory project.
So we identified a critical missing piece: once data enters the system, how do you compute it, generate a proof, and then feed that proof into a smart contract so it can trigger actions like rewarding users with tokens or NFTs?
That component was severely lacking. So we decided to build this infrastructure (Infra) to support DePIN developers. If they succeed, we succeed too. That’s my mindset.
Starting in 2021, we began developing W3bStream.
Today, W3bStream is already collaborating or in talks with over a dozen DePIN projects, providing infrastructural support to help them scale and succeed. This represents IoTeX’s evolution—from past to present to future.
Looking ahead, we hope W3bStream becomes the industry standard.
Currently, only a small number of developers are deeply involved in DePIN—maybe two or three dozen projects. But if we do our job well, I hope to see hundreds of such DePIN projects emerge in the future.
Vision, Reality, and User Acquisition in the DePIN Space
TechFlow: Many domestic readers—and people in general—may not understand what DePIN is. Without supercharged incentives, few seem interested in understanding exactly what IoTeX does.
So I’d like to know why you chose to become a DePIN founder despite its high barriers, and why you’re willing to take on the difficult journey of building IoTeX? As an early pioneer, were there hardships along the way?
Raullen: My two co-founders and I wanted to do something impactful—something that could change the world. We want to make the world better: DePIN and distributed technologies might be a great starting point.
If we can create a decentralized Uber, Airbnb, or a decentralized 5G network—or any kind of machine network—that improves people’s lives, it would be deeply meaningful. For instance, ride-hailing costs could drop by 50%, or your phone bill on Airbnb could be halved.
My experience at Uber taught me why companies like Uber have such high overheads. Most of the cost comes from optimizing driver-passenger matching, route planning, and risk control.
Take telecom companies—they deploy 5G base stations and then send staff to maintain them. That’s extremely costly, but these costs could be distributed among individuals.
For example, if individuals could operate and maintain a 5G base station themselves, they’d have strong incentives to do it well—because all profits go directly to them. This low-cost, high-efficiency model would allocate resources better, reduce waste, and allow consumers to enjoy lower prices.
If DePIN networks succeed, they could profoundly impact human society.
From a broader perspective, I think DePIN is like Shared Economy 2.0—a more radical transformation of the sharing economy.
TechFlow: From idealism back to reality—how many DePIN hardware manufacturers are actively pursuing this today?
Raullen:
The market structure in the DePIN industry looks like this:
(1) First, there’s a demand—for example, 5G technology, energy storage, or solar panels.
(2) Then, a DePIN project steps in, using tokens or other mechanisms to match supply and demand. For instance, if you own solar panels and generate electricity, and I need power—for my air conditioner—the project connects us.
(3) Next, third-party suppliers enter—companies that manufacture solar panels may partner with or supply the project.
(4) Additionally, fourth parties may emerge, specializing in hardware sales.
This is a common pattern we observe.
TechFlow: Currently, we still see big challenges on the demand side. Many people haven’t truly engaged with crypto, and current crypto infrastructure hasn’t caught up—smart wallets aren’t really smart yet.
Raullen:
I don’t think that’s a major concern. Let me use an analogy: crypto is like lithium in a lithium-ion battery. When you drive a Tesla, you don’t need to understand how the battery works—you just drive. When it runs low, you charge it. That’s it.
I believe DePIN will eventually follow the same path—embedded deep within a technology stack. For most average users, there will be several layers they don’t need to perceive at all.
Take my earlier electricity example: as a regular user, I may not understand crypto. But if my monthly electricity bill is lower, I’ll notice that. That’s all.
I don’t need to understand how tokens work or who issued them—these details are irrelevant to ordinary users.
This design actually benefits the adoption and popularization of DePIN, simplifying the user experience and making the process more accessible and user-friendly.
TechFlow: What part of decentralized IT infrastructure is most mature today?
Raullen:
In the DePIN space, IoTeX and Helium are two of the more advanced players, though our positioning differs. Helium focuses on specific verticals—they built a LoRaWAN network, a wireless network with wide coverage—one base station can cover over ten kilometers. But its drawback is slow speed, insufficient for modern smartphones.
It does have applications in agriculture and industry where sensor data volume is small. They did well on the supply side, deploying hundreds of thousands of devices, mainly in the U.S., with some in China. But they failed to develop strong demand. End users didn’t have enough incentive to use the network, so they struggled here.
Later, they pivoted to a second project—5G. Since everyone uses mobile phones, 5G doesn’t face big demand-side challenges. But supply remains difficult—you can’t just buy a device and place it at home. It needs rooftop installation and connection to high-speed internet, among other requirements.
In contrast, our philosophy differs from Helium’s. They focus heavily on wireless connectivity.
My personal belief is that we should prioritize infrastructure development and lower the barriers for developers so more can join, experiment with different ideas, and eventually some truly groundbreaking innovations may emerge.
Right now, we can’t predict what future innovations will look like. Just like smart contracts—we couldn’t have imagined before their creation that they’d power DeFi, prediction markets, etc.
I believe innovation emerges organically, and our role is to dramatically lower the barrier. DeFi is a perfect example: there are tens of thousands of DeFi apps worldwide—some serious, some basic. But with such a large base, some outstanding projects inevitably rise.
The problem with DePIN is the base is too small—only 70 or 80 projects, fewer than 100—so it’s hard for standout successes to emerge. Our mission is to keep pushing the industry forward so more innovation can flourish.
TechFlow: What’s the best way for others to collaborate with IoTeX?
Raullen:
Our infrastructure now has a first version that’s largely complete. But now we’re engaging more with developers—talking to builders, founders, and entrepreneurs in the DePIN space.
We ask them many questions: What do they think of our Infra? What features do they need? What pain points are they facing? How can we help? Should we add new functionalities?
These interactions help us better understand their needs and help them leverage our Infra more effectively to get their projects off the ground.
Through dialogue, we continuously refine our infrastructure to meet their needs. We also hope this engagement inspires more developers to join, accelerating growth in the DePIN space.
Our goal is to provide an excellent platform so developers can build and advance their projects more easily—enabling the entire DePIN ecosystem to thrive.
TechFlow: As mentioned, we need a “Tipping Point” moment for more people to discover DePIN. So what decentralized hardware products available today let users earn passive income?
Raullen:
There are already several projects across various sectors, including traditional server storage networks and GPU networks.
Another category is sensor networks—e.g., localized weather data collection, where users place devices in their backyards to gather hyperlocal weather data and monetize it.
Projects like DIMO collect vehicle data and monetize it. There are also dashcam projects that capture street views during operation, gather visual data, and return geospatial insights to users—a valid use case.
Other projects focus on wireless connectivity—like Helium’s WiFi Maps, or a company offering GPS correction services.
GPS correction serves a niche but meaningful market. It solves GPS signal inaccuracies caused by atmospheric conditions like clouds, overcast skies, or twilight, where signals refract or reflect. These companies install base stations on rooftops to correct GPS signals and deliver compensated, more precise location data to phones—an interesting application area.
TechFlow: From a project builder’s perspective, how can IoTeX help transition a Web2.5 product to Web3? Many projects still rely on centralized servers, and Web3 VCs often question how they plan to decentralize.
Raullen: That’s a great observation. We’ve noticed this trend in conversations with many project teams.
This middleware layer plays a crucial role in system architecture: it connects devices or data streams and performs computation. Since raw data can’t go directly on-chain, there needs to be an intermediate layer to compute results—such as Helium’s Proof of Coverage (PoC) or DIMO’s vehicle route tracking. These computed results are then submitted to the blockchain to trigger token or NFT rewards.
At the beginning, building a simple centralized middleware may suffice—to validate the concept and prototype. But when a project wants to go to market and present to investors, token holders, and users, this middleware becomes a bottleneck. No one fully trusts the results produced by a centralized intermediary.
You’re right—why should anyone believe those computations are accurate? Could there be bias? At this stage, transparency, decentralization, and reliability become critical.
That’s where we believe W3bStream can play a key role. We can ensure transparency, reliability, and decentralization in the intermediate computation process, helping projects overcome this challenge and apply their logic more effectively.
The Role of ZK in DePIN
TechFlow: Are ZK technologies also being used in DePIN? What’s your view on ZK’s role?
Raullen: Performing off-chain computation in a project isn’t technically hard—you can write programs to do it. The real challenge lies in generating a zero-knowledge proof (ZK proof), then submitting both the result and the proof to a smart contract. The contract must verify that the computation matches what was claimed—an intricate process.
The key here is ensuring transparency and verifiability in computation. On blockchains, trust is built on verifiability. Only when a smart contract can confirm the correctness of a result—and rule out cheating or tampering—will investors, token holders, and users trust the system.
Therefore, ensuring transparency and verifiability for specialized off-chain computations is critically important—and exactly what our W3bStream project aims to solve. Our goal is to build a trusted middleware layer that ensures off-chain computation is transparent, secure, and reliable, empowering projects with stronger infrastructure so their logic can be widely adopted.
TechFlow: Regarding privacy applications in the underlying DePIN layer, what’s your view on ZK’s role?
Raullen:
Recently, Vitalik wrote an article outlining Ethereum’s three strategic directions: account abstraction (AA), privacy, and technological advancement. Each has its own purpose.
AA aims to attract more users, especially institutions, whose authentication methods differ greatly from regular login flows. Institutions often have complex identity systems, and AA seeks to accommodate them.
Privacy, on the other hand, focuses on protecting fund privacy on Ethereum—like keeping your balance hidden in a big bank.
I believe privacy is challenging in the short term, especially under regulatory pressure, but holds long-term comprehensive value. However, implementing privacy poses many hurdles—even requiring custom smart contract languages for ZK contracts in some cases.
As for the third direction—Layer 2—it’s about how to use these funds: enabling DePIN, DeFi, gaming, etc. I think Ethereum’s roadmap is guided by the TVL (Total Value Locked) in these areas.
Limitations of DePIN Use Cases
TechFlow: For Web3 and AI founders, startup efficiency is paramount. But decentralized storage experiences aren’t great today. How do you see decentralization and centralization combining to improve application efficiency?
Raullen:
There’s actually a small sub-sector within DePIN focused on decentralized computing—like decentralized GPU networks and decentralized storage.
For AI, especially model training or inference, inference requires less computation, but training is extremely complex.
The phase that demands massive GPU resources is model training, especially during pre-training. This stage requires not only immense compute power but also high bandwidth and fast communication between GPUs.
Such decentralized networks are very hard to achieve. Imagine placing a GPU at your home and another at someone else’s—communication between them would be painfully slow. But certain applications are feasible—like fine-tuning a large model post-pretraining or deploying smaller models.
TechFlow: So DePIN isn’t suitable for building large models?
Raullen: Currently, it’s very difficult. Building a ChatGPT-like model using decentralized GPUs would be extremely challenging, and the cost likely wouldn’t be significantly lower than AWS.
Data: DePIN’s Entry Point into Serving AI
TechFlow: What role do you see DePIN playing in the convergence of AI and crypto?
Raullen:
I see several key areas.
Data, computing power, and energy are all domains where DePIN can serve AI, though AI can also benefit DePIN.
For DePIN serving AI, compared to compute, I believe data is a much better entry point. Crypto and Web3 excel at crowdsourcing—whether it’s data or funding.
If your AI model needs specific data—say, engine RPMs for a particular car model—this requirement can be fulfilled by a DePIN network and fed back into the model for training.
In contrast, decentralized compute remains more complex.
TechFlow: Is there anything special about IoTeX you’d like the audience to know from this interview?
Raullen:
Yes. Take IoTeX as an example: as an established project, we recognize that in crypto, attention often goes to new launches, while valuable older projects may be overlooked.
I want people to know that IoTeX has consistently enhanced our token utility and advanced our project, steadily exploring new frontiers on a solid DePIN foundation.
We’ve become a leading project in the DePIN space, and more DePIN projects will join IoTeX, especially in infrastructure development.
We plan to work closely with all DePIN teams, investors, and media to jointly advance this field. Our goal is to foster the growth of the DePIN sector and make the world a better place.
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