Interview with ELOOP: Unlocking Liquidity in Machine Economy for All DePINs with RWA Tokenization Platform Built on peaq

After the success in tokenizing a car-sharing Tesla fleet, with over $1.7M raised without any marketing expenditure, ELOOP is now expanding its scope by launching a RWA (Real World Asset) tokenization platform on peaq. The platform, currently being tested on krest, peaq’s canary network, will soon be launched on the peaq mainnet. ELOOP aims to achieve $20M worth of Machine RWA token sales in its first year on peaq.

In this exclusive interview, Nico Prugger, Co-Founder of ELOOP, opens up about the team, vision, ambition, technology, collaboration in Web3, behind this Machine RWA tokenization game-changer who has been standing at the forefront at the global DePIN movement since day 0.

What inspired the creation of ELOOP, and what are its core objectives?

ELOOP originally started as a mobility and Web3 startup. In 2019, we launched an emissionless car-sharing service with a couple hundred Tesla vehicles. We soon faced challenges operating machine RWAs, such as significant funding requirements and a lack of customer loyalty in competitive industries. Our passion for Web3 led us to explore how this technology could address these issues. A year later, we decided to tokenize our Tesla fleet. We created DePINs before the term even existed, enabling fractional ownership, which turned out to be a game-changer. This innovation significantly impacted usage and behavior and provided a new way to fund our company’s growth.

This project’s success caught the attention of companies from various industries worldwide, from energy providers to DePIN startups, all facing similar challenges.

Our vision has always been broader than just car sharing, and seeing the potential to assist companies globally, we decided to create the ELOOP Network, an ecosystem for tokenizing any real-world machine assets (RWAs).

The ELOOP Network has since become our top priority, with projects around the world. Our main goal is to make it possible for everyone to invest directly in the products and services they love, not just Web3 natives but truly anyone. We believe everyone should have the opportunity to invest in assets like wind turbines, car-sharing vehicles, or Wi-Fi antennas without geographical limitations. People can decide which projects they want to accelerate and directly benefit from the income these assets generate. This approach empowers communities and individuals and drives innovation in products and the entire Web3 space.

Can you share about the founding team’s background and what brought you together to work on ELOOP How does the diverse expertise within your team contribute to the success of ELOOP?

We’ve been friends since childhood, growing up together in the late ’80s and early ’90s in the western part of Austria, close to Germany and Switzerland. Despite our varied professional interests, which led us to work in different fields, our paths eventually converged at ELOOP.

Leroy, after completing business school and studying journalism and communications, ventured into the startup industry. His experience, particularly as the CEO’s right hand, gave him a deep understanding of what running a startup entails. He now serves as the CEO of ELOOP.

Nico, an industrial engineering & management graduate, started his career at major corporations like ThyssenKrupp. He transitioned from technical development to lean management and finance, eventually taking on the role of CFO at ELOOP.

Fredi, a self-taught software developer and Web3 enthusiast, began coding in his childhood. His journey through backend development to growth hacking led him to become the head of IT at a Zurich-based marketing agency. His passion for blockchain technology deepened with the emergence of Bitcoin, guiding him to his role as CTO at ELOOP.

Max, the quintessential “hardware guy,” has always been driven to achieve the seemingly impossible. From biking from Austria to China, sailing across the Atlantic, building his own house, to restoring vehicles for fun, his background in IoT and telecommunication perfectly positioned him as the COO of ELOOP.

The idea for ELOOP was born from Leroy and Nico’s vision, but they knew they needed Fredi and Max to make it a reality. What none of us anticipated was the incredible synergy that would emerge among us. Our diverse skills naturally led us to our roles: Leroy with his strategic vision, Nico focusing on tokenomics and value creation, Fredi developing a unique smart contract ecosystem, and Max bringing machine RWAs on-chain and overseeing operations.

Each of us brings the right skills to the table and contributes to ELOOP’s success and most importantly after working together for almost 7 years now and are still friends.

How do you explain the concept of decentralized physical infrastructure networks, with ELOOP as an example, to someone unfamiliar with blockchain or decentralization?

DePINs, decentralized physical infrastructure, are akin to citizen participations that have existed for a long time. Now, with advanced technology, they’re completely digital and automated. They decentralize value creation, allowing every person owning a fraction of the underlying hardware to participate when the physical infrastructure generates value.

In the first project on the ELOOP Network, car sharing Teslas were tokenized and sold in fractions, transforming the vehicles into DePINs. Now, the physical infrastructure is owned by thousands of individuals, and whenever a car sharing user rents a vehicle and pays for it, the generated income is distributed to all token holders who own a fraction of the vehicles. Blockchain technology enables this process, ensuring transparency and security in tracking how the DePIN’s revenue is generated and distributed.

What do you think of the current DePIN industry?

We’re excited to see the growing interest in DePINs within the web3 space. ELOOP began exploring this concept back in 2017, before the term DePIN even existed. Our vision of distributing value among users through decentralized infrastructure led us to fractionalize ownership of electric vehicles and create the ELOOP Network. Tokenizing our Tesla in 2020 was a pivotal moment.

The rise of more DePINs is in perfect harmony with ELOOP’s vision of democratized value generation. The ELOOP Network enables all DePINs with hardware to reach a global audience and sell their products in fractions, like never before.

We firmly believe that this trend isn’t temporary; real-world revenue-generating hardware will be embraced by everyone, also non-web3 customers regardless of crypto market conditions.

DePINs are here to stay!

Where do you see ELOOP and the DePIN industry in the next five years, and what are your long-term goals?

We’re still in the early stages of the DePIN space, with the first projects emerging, backed by solid business models and revenue streams. This market is growing rapidly, fuelled by the appeal of tangible hardware coupled with blockchain technology.

As DePIN startups and scale-ups gain more traction, along with corporations fractionalizing their physical infrastructure, the market will experience exponential growth.

In five years, we anticipate the volume of tokenized RWAs reaching into the billions, and possibly trillions in subsequent years.

Various companies are already exploring avenues for individuals to participate in value streams through citizen participations or crowdfunding initiatives. With blockchain technology facilitating fractional ownership of assets such as wind turbines, delivery drones, or satellites and many more the most direct way to invest in a company has been created. This opportunity becomes highly scalable, enabling global investment in infrastructure accessible to all.

ELOOP is at the forefront of this movement, offering technology to facilitate such investments. In the future, we envision machine NFT baskets akin to ETFs, allowing investors to diversify their portfolios with green energy hardware worldwide.

This paradigm shift in financing and refinancing physical RWAs will democratize access to capital. Beyond traditional banks, individuals will have the opportunity to own a stake in tangible assets. With millions of people worldwide investing modest sums, the collective impact can be significant. By empowering the crowd to own infrastructure, everyone stands to benefit, creating a win-win scenario where profits are shared among stakeholders, not just corporate entities.

Can you describe the underlying technology stack of ELOOP and why it was chosen?

We’ve chosen to collaborate with peaq network, serving as the layer-1 solution for DePINs.

All of ELOOP’s smart contracts are constructed on peaq, facilitating fully automated on-chain transactions. This setup stands as one of the most advanced systems for fractionalizing DePINs and machine assets, along with distributing their generated rewards seamlessly on-chain.

There are numerous reasons why peaq aligns with ELOOP’s objectives:

• Tailored for DePINs and the integration of machines onto the blockchain, harmonizing seamlessly with ELOOP’s RWA tokenization initiatives, started in 2020.
• Enables the creation of self-sovereign machine IDs (SSI) for RWAs, a feature already operational within the ELOOP Network.
• Offers optimal storage solutions for machine data at minimal costs.
• Facilitates the creation of pools containing various machine NFTs, akin to a “machine ETF,” streamlining investment opportunities.
• Technically prepared and slated for future implementation.
• Supports multichain wallet compatibility, including Metamask and Substrate.

Moreover, peaq boasts other essential benefits such as fast transaction speeds of up to 100k transactions per second (TPS), minimal transaction fees, and a highly secure and decentralized framework.

Crucially, we value the close collaboration with the peaq team and its founders, a partnership that has thrived for years. Their unwavering support and profound understanding of the technology for fractionalizing machine assets and DePINs, have been instrumental. We believe this level of engagement and collaboration is unparalleled, setting a standard that few other companies we’ve worked with can match.

How does ELOOP ensure the security and reliability of its physical infrastructure networks?

Security of ELOOPs technology:

For ELOOP’s proprietary technology, which is blockchain-based software, we collaborate with the highly secure and decentralized blockchain, peaq network. The platform and smart contract infrastructure developed by ELOOP underwent rigorous testing in three phases.

• In-house testing with the entire development team and team members.
• Public test space with over 1,000 participants on KREST network, the sister network of peaq, for simulations.
• Professional audit conducted by an experienced company.

B2B Project Due Diligence on the ELOOP Network:

Only companies with a reliable machine infrastructure and with a solid business model get accepted for the tokenization of their hardware. Only when the physical infrastructure brings specific benefits, what can be sustainable social, environmental and financial impact to the ELOOP Network and it’s users, the company gets accepted.

In the second step ELOOP works with lawyers, auditors and well known crowdinvesting platforms for the legal and financial due diligence of the business customer. When ELOOP gets green light from that side, the project can tokenize with the ELOOP Network.

Can you share some practical applications of ELOOP that are currently in use or in development?

Our inaugural project involved tokenizing Teslas, and through the ELOOP Network, we managed to sell asset tokens representing the vehicles, amounting to approximately $1.7 million.

Currently, we’re developing several projects, aiming for a tokenization volume of up to $20 million just within this year.

Most of these projects originate from the Web2 space, particularly within the mobility and energy sectors, such as vehicle-sharing companies and solar energy providers. In the Web3 domain, there are DePINs gearing up to initiate a fractional sale via the ELOOP Network. This includes a wide array of assets, from Wi-Fi router grids and data collection antennas to drones and much more.

How does ELOOP integrate with existing physical infrastructure, or does it require building from the ground up?

The integration process for business customers is streamlined and user-friendly, with ELOOP’s API capable of accommodating various methods of data input. Typically, the connection process takes only a few days. Businesses operating the physical infrastructure do not need to make any changes to their daily operations. ELOOP connects its API to the infrastructure and imports the data to the blockchain. From there, everything is fully automated by ELOOPs smart contract infrastructure.

What are the biggest challenges you’ve faced in developing ELOOP, and how have you addressed them?

We faced quite a few obstacles along the way. Back when our focus was primarily on running a car-sharing startup, or dealing with machine RWAs, our biggest hurdles included financing new vehicles and carving out a competitive edge in the highly competitive shared mobility market of major European cities. We needed to give people a compelling reason to choose ELOOP over others. Our breakthrough came with the idea of fractionalizing our vehicles through tokenization, allowing our users to buy these tokens. This strategy not only provided us with the funds needed for growth but also encouraged our users to drive more often, take better care of the vehicles, refer friends, and become vocal brand ambassadors on social media. These positive outcomes led us to establish the ELOOP Network to assist companies worldwide with machine RWAs.

Timing also presented a challenge. When we introduced the first tokenization of machine RWAs with our shared Tesla fleet, the Web3 world was predominantly focused on NFTs, showing little interest in what we now refer to as DePINs. This meant it took some time for key players in the Web3 space to take notice of our efforts. Fortunately, we connected with like-minded RWA enthusiasts such as peaq, which reinforced our determination to pursue our vision. Now, as the true potential of RWA tokenization and DePINs gains recognition, we find ourselves perfectly positioned to lead in this space.

Legalities were another concern. Initially, launching asset tokens and ensuring their tradability was a complex challenge due to the lack of a supportive legal framework. Thankfully, major financial regulators, including the SEC and the EU, have since established guidelines that address these critical issues, significantly easing the path forward for us and similar ventures.

Can you walk us through the key milestones ELOOP has achieved so far, and how have these milestones directly impacted the growth and scalability of your network?

Milestone: ELOOP began its journey as a car sharing company specializing in electric vehicles back in 2019.

Over the years over 100,000 users registered for the service.

Milestone: First asset token sale started in 2020 → DePIN with tokenized Teslas

This represented the initial step towards establishing the ELOOP Network, demonstrating the efficacy of our pioneering approach.

Milestone: Developed a white-label version of the tokenization platform. → ELOOP Network was born

After launching our website and revealing what we had been quietly developing during the crypto winter, numerous projects from around the globe reached out to us. We quickly started collaborating with these initial projects, all without resorting to sales outreach or paid marketing campaigns. This signalled a strong demand for our solution.

Milestone: Smart contracts have been deployed.

After the initial version of our technology, we embarked on developing a version, which is fully automated and operates entirely on-chain. This iteration directly interfaces with machine assets and distributes generated rewards through smart contracts, while also facilitating on-chain payment processes. This marked a significant milestone for us, and we were able to test the system for the first time on the testnet.

Milestone: We launched a test space, live on the KREST network, where thousands of transactions were tested by the community.

We primarily did this for security reasons, aiming to gather feedback from a diverse pool of users to thoroughly test the system and its features. With thousands of transactions by our community, we received incredibly valuable feedback to enhance the code and streamline the process.

Also, we keep track of who is testing the system, how long they’re testing it, and how often. Assisting us in this way will surely be beneficial soon.

Milestone: Official Announcement: ELOOP Launches Machine RWA Tokenization Platform

That garnered significant media attention worldwide. The news spread organically in multiple languages across countries globally. The largest media platforms that shared it have a combined reader base of more than 25 million people.

How does ELOOP handle scalability, especially as demand for decentralized services grows?

From a technical standpoint, the platform is engineered for easy scalability and streamlined handling. It’s designed to accommodate multiple asset token sales simultaneously, allowing for efficient parallel processing.

ELOOP is expanding its team by bringing on board employees who specialize in project management and nurturing business partnerships. This growth is set to align with our upcoming investment round, setting the stage for ELOOP to scale its operations even further. With these added resources and expertise, ELOOP will be ideally equipped to speed up its growth trajectory and embrace new opportunities in the market.

How does ELOOP plan to overcome societal or regulatory hurdles, especially in different jurisdictions?

As a tech provider, ELOOP partners with companies to handle all regulatory aspects of token sales. With nearly five years of experience in this space, we are well-prepared to navigate regulatory requirements effectively.

Through partnerships with reputable law firms and crowdfunding platforms, we offer a comprehensive solution for our B2B customers. Leveraging our expertise and established blueprints, businesses can tokenize their assets with confidence, knowing that regulatory compliance is taken care of.

Our approach ensures that companies from almost any country can participate in the ELOOP ecosystem seamlessly, without the need to worry about regulatory hurdles.

How does ELOOP engage with its community, and what role does the community play in the project’s development?

Our vision centers on empowering the community, so it was essential for us to embody this principle from the get-go. Even before we officially kicked off as a company, we initiated a crowdfunding campaign to engage the public right from the start.

By tokenizing our assets, we took a significant leap forward, enabling our community to share in the revenue generated by our RWAs. We set up a Telegram group for our token holders, creating a direct line for feedback and fostering open discussions about our future plans. The community’s insights were invaluable, particularly in shaping the design and user experience of our applications and enhancing our service.

The launch of our Discord server marked the next phase in our journey towards deeper community integration. This platform allowed us to assign specific roles to community members and involve them more closely in our projects. For instance, our Discord community gets first dibs on testing new features and our testnet, enabling us to refine and improve these offerings collaboratively.

As the ELOOP Network becomes operational, our community will have the opportunity to interact with projects across various industries through our platform, further solidifying our commitment to community empowerment and cross-industry collaboration.

What governance model does ELOOP use, and how does it ensure fairness and transparency in decision-making?

Regarding governance, we utilize Telegram and Discord to gather people’s opinions, offering them the opportunity to make suggestions or provide feedback. This approach is our initial step towards engaging the community in decision-making processes, ensuring the product aligns with the community’s needs. The ELOOP Coin will introduce additional governance features into the ecosystem, which we plan to integrate gradually. This effort will further enhance transparency within our community.

In the spirit of fairness and transparency, for the projects we partner with, we directly record all machine and revenue generation data on the blockchain. This allows anyone to use an explorer to verify the information at any time.

How does ELOOP address sustainability concerns, especially regarding energy consumption and environmental impact?

Our roots are in green mobility, and with the ELOOP Network, we’re taking our legacy a step further by acting as a catalyst for other sustainable projects. Our commitment lies in supporting projects that positively impact the planet. Our project pipeline is brimming with initiatives in green mobility, renewable energy, climate technology, and social impact ventures.

When it comes to blockchain, the peaq network stands out for its eco-friendly approach and minimal energy consumption.

Are there any upcoming features, developments or partnerships that you’re particularly excited about?

Absolutely, there are several upcoming features, developments, and partnerships that we’re thrilled about:

• At the Token2049 event in Dubai, we’re set to unveil our first machine RWA project.
• Shortly thereafter, we’ll launch the asset token for a significant DePIN project in the US, which we’re currently in the process of tokenizing.
• Mid-year, we’re looking forward to the TGE of the ELOOP Coin, which serves as the lifeblood and fuel for the ELOOP Network.

We’ll also see the public launch of the ELOOP Network mainnet, the Public Launchpad Sale, and the listing of the ELOOP Coin.

What advice would you give to entrepreneurs or innovators looking to venture into decentralized infrastructure?

We discovered that collaboration is key. When we began reaching out to projects we admire and initiated conversations, we realized that within the Web3 space, there’s a genuine interest among companies to support one another. We often encountered synergies and project ideas that we hadn’t previously considered. I believe that instead of trying to tackle all DePIN-related challenges alone, it’s more effective to join forces with projects that align with your vision.

Particularly for decentralized infrastructure, it’s vital to address challenges in both the Web2 and Web3 realms, devising solutions that cater to both. The real strength of DePIN lies in its ability to bridge these two worlds, transferring tangible value from real assets onto the blockchain.

Last but not least, besides ELOOP, what’s your favorite DePIN project?

Peaq! We have been in close collaboration for several years. Their vision for DePIN perfectly matches ours, and they’ve been supportive of ELOOP from the moment we met. The potential of peaq’s layer-1 technology could revolutionize how DePIN projects operate, which is precisely why we chose to develop our ecosystem on their platform. This decision was made with the aim of benefiting all DePINs with the ELOOP Network.