Welcome to Machine DeFi

Machine DeFi starts now. The decentralized financial system for the Machine Economy — a global, human-centric economy where machines and robots do the heavy lifting for the benefit of humanity and all life on earth. Machine DeFi is the tracks this train runs on.

In this piece, we’ll be diving into the core pillars of Machine DeFi as we begin rolling them out over the weeks ahead. This isn’t just peaq alpha, this is the beginning of a new paradigm for Web3 and the start of a new financial system.

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For centuries, we’ve seen machines taking over more and more roles in the value creation chain. With the rise of AI and robotics, this is about to go parabolic. This presents a challenge: How do we, humans, still make ends meet in a world where AI and machines do more and more of the work? 

It also presents a huge opportunity: The machines can create many times more value, much faster, at a higher quality level, without any rest. If we — humanity — get this right, we are on the precipice of the Age of Abundance. 

The challenge part only applies if access to this abundance is centralized. Machine DeFi plays a crucial role in making the Age of Abundance something that all humans on earth can partake in, enabling anyone to become a stakeholder in this critical transformation. It’s a whole new financial system, one built for people, made possible by robots, devices, machines, and AI.

And it’s happening on peaq.

If you've read the intro to Machine DeFi, you already know the basics: Machine DeFi is decentralized finance built for and around machines. It’s what unlocks a whole plethora of new machine-based liquid assets owned by people, and what will enable robots, devices, vehicles, and (decentralized) Physical AI to earn, spend, borrow, and invest — autonomously and transparently. 

peaq was designed from the ground up to power the Machine Economy, with Machine DeFi as the crucial tangible pillar to the otherwise often intangible economy. One of the most powerful dynamics of peaq’s economy is its network-level liquidity flywheel. Each new Machine DeFi project on peaq will be able to plug into and contribute to peaq's Network-Level Incentive Pools driving liquidity growth, and fuel them with a part of its fees. 

In simpler terms, the Machine Economy is uniquely baked into peaq at the deepest levels to create an upward spiral of value creation for projects and machines that choose the peaq ecosystem as their home. 

In this first section, we’ll dive into these Network-Level Incentive Pools underpinning peaq’s onchain Machine Economy. This is the first time a network has been constructed this way, further highlighting peaq’s unique approach and dedication to its singular vision to power the Machine Economy. So take your time to let things sink in and feel free to head over to peaq’s Discord with any questions. 

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peaq’s Network-Level Machine DeFi Flywheel

peaq’s Network-Level Incentive Pools include the Machine Subsidization Pool, which subsidizes the onboarding of revenue-generating machines to peaq, and DePIN Incentive Pool 1 and DePIN Incentive Pool 2, which are focused on growing DePINs’ liquidity and rewards. 

The pools have already accumulated some $3.5 million in total from network fees and tokens minted via inflation, and later on, this liquidity will be put to work in peaq’s Machine DeFi ecosystem via onchain voting and automated mechanisms to finance more machines and incentivize DePINs on the network.

From a practical standpoint, this means that any onchain activity from both humans and machines on peaq directly translates into boosting the peaq-native liquidity flywheel. For example, a decentralized lending application claiming a 1% fee and dedicating 5% of this fee to the Network-Level Incentive Pools contributes to bringing more revenue-generating machines and DePINs to peaq. 

More revenue-generating Machines and DePINs on peaq means more liquidity and usage, which means increased liquidity in the Network-Level Incentive Pools, which again means more revenue-generating Machines and DePINs. And repeat. This makes up a liquidity flywheel that will catalyze the Machine Economy and speed up its growth, with peaq as its decentralized computer.

How it works: 

1. Any activity on peaq or Machine DeFi applications generates fees
2. A percentage of those fees goes to Network-Level Incentive Pools subsidizing new machines and DePINs
3. As more machines and DePINs join peaq, they generate more activity on the network and on Machine DeFi applications
4. More network activity and Machine DeFi usage means more fees, which brings us right back to step 1

But Machine DeFi isn’t a single application, product, or pool. It’s a layered stack that will evolve over time, with each layer unlocking new possibilities and opportunities. Put together, they are the decentralized financial system of the Machine Economy.

To really understand Machine DeFi, we first need to look at where it is today so we can get a clearer picture of where it’s going.

In its first phase, Machine DeFi is all about turning machines into onchain assets — Machine RWAs. By tokenizing revenue-generating robots, devices, and infrastructure, people and communities can co-own autonomous machines such as robo-cafes or robo-taxis. The revenue generated by these machines streams directly onchain. Their value becomes transparent, tradable, programmable — and accessible to anyone.

In the near future, the first generation of Machine DeFi will enable all sorts of opportunities:

• People or DAOs will be able to raise liquidity for setting up value-generating machines, giving communities a real stake in the infrastructure that serves them.
• Machine DeFi builders will be able to make a machine’s revenue stream programmable — so machines can split, distribute, or reinvest it automatically, directly onchain.
• You will be able to swap tokens representing real machines on open markets, making real-world value more accessible than ever.
• New financial products will go live, from machine revenue-backed bonds to Machine RWA yield baskets and beyond.
• Machines will become onchain assets that you can use as onchain collateral for a loan.

Over time, this will evolve. Machine value, ownership, and coordination all move fully onchain. At the same time, machines become smarter and more autonomous. Eventually, these two processes will transform machines into autonomous economic agents. As the rise of AI and Web3 enables them to create value as peers, not as mere tools, they will be able to:

• Earn, spend, borrow, and invest, governed by advanced logic and adaptive AI.
• Pay each other directly for goods and services, forming real-time, machine-to-machine economies.
• Form DAOs to govern themselves, manage infrastructure, and coordinate tasks.
• Manage their own cash flows, paying for energy, maintenance, and upgrades using the revenue they generate.
• Build onchain credit histories, participate in lending markets, and reinvest profits into other machines or services.

But let’s not get too far ahead of ourselves. Instead, let’s take a look at how we get there.

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The Machine DeFi Stack on peaq

Just like traditional DeFi, Machine DeFi consists of many primitives working together with atomic composability. It’s designed from the ground up to power a new type of economy — one where machines, robots, and AI operate as active participants.

But teaching machines to borrow, earn, and invest isn’t exactly plug-and-play. That’s why Machine DeFi unfolds in layers, each unlocking a new level of financial independence for machines. 

The first layer provides foundational DeFi primitives — decentralized applications for trading, liquidity, and capital access. The second introduces Machine DeFi fundamentals, like tokenized machines, revenue-sharing, and machine-specific financial instruments. The third layer looks ahead, enabling machines to act as autonomous economic agents — earning, coordinating, investing, and transacting on their own.

Together, these layers form a programmable, composable financial system powering the Machine Economy — and it’s all being built, layer by layer, on peaq. Check it out.

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DeFi Foundations

Every economy needs a strong foundation. The first layer is where we lay the groundwork — the essential tools that make value exchange, liquidity, and access to capital possible in the first place. It’s where Machine DeFi begins. 

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Machine DEXs

Machine DEXes allow humans, machines, and institutions to exchange everything from DePIN tokens to Machine RWAs. They provide the liquidity and price discovery that drive the flow of DePIN- and machine-generated value, forming the core of economic activity in the Machine Economy. A small fraction of the DEXes’ pool fees may flow into the liquidity flywheel via the peaq’s Network-Level Incentive Pools, so any DEX activity could directly translate into growth for the entire ecosystem.

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Stablecoins

A stable medium of exchange is essential to man and machine alike. A Machine Economy stablecoin lets machines earn, spend, and transact without worrying about sudden market swings. 

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Launchpads

New DePINs, machines, and machine-related projects need a starting point. A launchpad gives teams and communities the tools for launching their utility token, tokenizing machines or machine-linked revenue streams and connecting with other participants in the Machine Economy. It’s how innovation gets crowdfunded.

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Lending and Borrowing

DePIN and Machine-specific lending and borrowing applications allow machine owners to unlock capital using machines or their revenue streams as collateral — trustlessly, programmatically, and autonomously.

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Core Machine DeFi 

Once the basics are in place, it’s time to unlock what makes Machine DeFi different. This layer introduces machine-specific assets, tools, and mechanisms that empower machines — and their human counterparts — to participate in finance in new ways.

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Machine RWAs

Machines are productive, value-generating assets, and that value doesn't have to go to Big Tech. With tokenization, it can be shared, owned, and leveraged by people and communities. By turning machines and their revenue streams into Real World Assets (RWAs), Machine DeFi gives communities the chance to co-own infrastructure, earn from it, and actively participate in financial systems once reserved for institutions.

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Initial Machine Offerings (IMOs)

The IMO model lets projects offer tokenized machines and revenue shares to early backers in exchange for the resources they need to launch and scale their offering. This creates a direct link between machine-generated value and community ownership, while giving backers more transparency and real-world grounding than they’d find in purely speculative Web3 projects. 

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Machine Bonds

Machines generate steady, predictable revenue — and that makes them ideal collateral. Machine Bonds are tokenized, onchain debt instruments backed by machine-generated RWAs and/or yield-bearing DePIN tokens. They’re designed to help projects raise capital, with repayments structured around the machine’s future income.

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Machine RWA Yield Baskets

Not everyone wants to manage a portfolio of individual tokens — and that’s where yield baskets come in. These are diversified bundles of Machine RWAs and DePIN tokens that generate onchain income, offering broad exposure to real-world machine activity with reduced risk. Instead of putting all your eggs in one basket (or in this case, spreading all your tokens across multiple baskets) you get access to a spectrum of tokenized machines — from delivery drones and EV chargers to smart agriculture equipment — all generating value across the Machine Economy.

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AI-to-AI Payments

AI-to-AI payments enable autonomous agents to securely exchange goods and services with each other—on-chain, in real time, and without human involvement. 

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Machine Insurance

Things break. Even robots. And when real-world value is on the line, risk needs to be managed. Machine Insurance provides onchain protection for tokenized machines and their revenue streams — covering things like hardware failure, downtime, or service disruptions. It’s a critical layer of trust and stability, especially for mechanisms like Machine Bonds, where capital depends on performance. Think of it as Web3’s version of a global risk pool — decentralized, transparent, and open to everyone, not just legacy insurers.

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Institutional Offerings

Institutions are eager to get into a liquid onchain Machine Economy — but they need clarity, compliance, and scale. Machine DeFi will make this possible through structured financial products tailored to institutional players. Think curated baskets of machine RWAs, DePIN ETFs, and yield-generating strategies packaged with clear frameworks and risk models. 

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Autonomous Machine DeFi

With the first two layers in place, this is where things start getting really interesting. As machines, robots, and AI evolve into autonomous economic agents, they can begin to transact, allocate capital, and coordinate — all onchain, with minimal human input.

No one can predict exactly how the more advanced layers of Machine DeFi will evolve, but the contours are already clear enough to sketch a viable blueprint of what’s to come. And it starts with machines building their own economies. 

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Machine Microeconomies

Not every machine needs to operate at global scale. From local delivery drone networks and their supporting hardware — charging docks, connectivity relays, etc. — to fleets of machines running entire autonomous farms, machine microeconomies allow machines to coordinate, transact, and optimize value creation within smaller, self-contained ecosystems. These microeconomies are interoperable by design, but tailored for specific environments — unlocking real-world efficiency at the edge of the network.

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Self-Governed Machine DAOs

Machines that generate, manage, and allocate value will, at some point, also need to coordinate — and DAOs give them the structure to do it. In the future, fleets of machines could form their own decentralized organizations, pooling revenue, voting on upgrades, managing shared expenses, and adapting to changing demands. And while they operate autonomously, they’ll still serve human needs — with profits flowing back to the people and communities who own, maintain, or rely on them. Yeah, it sounds like something pulled straight from Asimov’s brain. But go tell that to your friendly neighbourhood GPT. 

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Autonomous Machine Investing

Once machines have wallets, revenue, and decision-making logic, investing becomes a natural next step. Autonomous machine investing envisions robots and devices allocating capital — whether into energy, maintenance, other machines, or yield strategies — all based on predefined logic or adaptive AI. These machines could even actively participate in expanding the ecosystem by funnelling a portion of their revenue into peaq’s Network-Level Incentive Pools supporting DePIN and Machine growth. Imagine a robo-café automatically dedicating 10% of its profits to these pools, helping launch new DePINs, investing in them, and leveraging them to create entire new revenue streams. 

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Machine-to-Machine Markets

Machines won’t just transact with humans — they’ll transact with each other. In Machine-to-machine (M2M) markets, robots, vehicles, and devices can exchange services, data, energy, or value directly with one another. EVs can pay charging stations. Drones can rent airspace. Sensors can sell real-time data. All without the need for human involvement.

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Machine Composability

In Web3, composability means that applications and assets can stack, combine, and build on one another like digital LEGO. The same principle applies to machines. Tokenized machines, their data, and the financial tools around them can all interconnect — enabling entirely new services and applications. A weather drone can feed data to a decentralized insurance application. A delivery robot can plug into a mobility DAO. Composability makes the Machine Economy modular, scalable, and full of possibilities.

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Machine DeFi: Putting It All Together

As mentioned, it’s hard to predict exactly what a fully developed Machine DeFi ecosystem will look like. That’s like asking someone in the 19th century to imagine Instagram the moment the camera was invented. The specifics are uncertain — but the trajectory is clear. 

While this vision is bold, the foundation is real — and already starting to take shape. Layer by layer, application by application, peaq is building toward it, with some of the first major milestones coming very soon. 

Machine DeFi is the financial system of the Machine Economy. And it all starts here, on peaq. 

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Welcome to the Machine Economy

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