Introducing peaq Economics 2.0: upgraded to set machines free

Read the full Economics 2.0 paper (pdf)

Economics 2.0 is here — the economic network upgrade that unlocks value generation from Robot Money at full scale.

It's the economics companion to the Purple Paper, which describes what Robot Money is, why the Machine Economy needs it, and how peaq enables it. Economics 2.0 defines how the token economy captures that value for everyone participating in it.

Machines are becoming the main participants in the global economy. But an economic participant needs more than the ability to transact.

It needs standing — a way for anyone to know what it is worth, what it has done, and what it can be trusted with. Economics 2.0 is built around exactly that. Designed to onboard robots, vehicles, and sensors at scale, it gives machines standing and denominates it in a single unit.

peaq’s original model was built for an application-centric network—a design that successfully carried peaq to 3.3 million machine identities, over 200 million transactions, and 60+ applications. But as machines evolved, the ecosystem outgrew that initial architecture. Devices stopped living on a single chain; application-level reward pools diluted incentives when the true economic unit was the individual machine; and verifying real-world physical activity proved to be a task standard block producers were never built to handle. 

So the economics were upgraded around the machine itself, with PEAQ at the heart of it. Economics 2.0 consolidates the original six-pool model into a unified architecture built on four primitives.

1. Machine Activation as the entry point. Every machine enters the economy through an activation priced in USD and settled in the payment asset of choice. The activation creates bonded PEAQ, establishing the machine’s identity, trust commitment, and Economic Weight from day one — while freeing it to coordinate, earn, and transact across ecosystems, chains, and payment rails.

2. Trust Validators as the single staking venue. Public staking consolidates into trust validation. Validators verify machines and attest real-world state, and are the network’s only staking venue. Delegators stake behind them and share in the rewards.

3. The Machine Pool as the growth engine. The pool rewards operators for growing productive machine fleets, turning machine activity into the engine of network expansion.

4. One flow, every currency. Activations and coordination fees can be paid in the payment asset of choice, while the network bonds and distributes value through a unified PEAQ Flow. Onboarding stays predictable in USD while machines transact freely across currencies and chains.

Stablecoins carry the money. PEAQ carries the trust. Here is how it works.

Three Participants, Three Jobs

Economics 2.0 has three participants. Each holds one distinct economic position. 

Token and Fee Flow

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Machine Operators bond PEAQ to each Machine ID to activate it, holding no staking position themselves. Instead, their standing comes directly from fleet output: how many machines they run, at what tier, for how long, and how productively. Everything those machines earn commercially stays with the operator; coordination fees act as a minor per-event cost to use peaqOS's rails, not a revenue share.

Trust Validators act as a decentralized oracle network to verify that real-world machine activity actually happened. They continuously gather machine data, verify cryptographic proofs of service, and attest verified state onchain — creating the ground truth for credit scores, reward distribution, and lifecycle decisions. Delegators stake PEAQ behind their chosen validators to share in rewards and slashing exposure. This is the sole venue in the peaq ecosystem where public staking takes place.

Chain Validation, meanwhile, operates strictly as backend infrastructure. Consensus is managed by a permissioned set capped at ten nodes, completely decoupled from yield and public delegation. By shifting public staking from L1 block production to Trust Validation, the participants with the largest economic stake in the network are directly accountable for the accuracy of the data driving value flow.

Economic Weight: The Measure of Machine Standing

Every economy has a way of measuring standing. For businesses, it is creditworthiness: capital committed, obligations met, and a track record counterparties can verify. That standing quietly determines what doors open — which loans get approved, what terms are offered, and how reliably a business is served. 

A machine entering the economy needs that exact same measure. On peaq, that measure is Economic Weight. A machine’s bonded PEAQ position acts as its net worth, while Economic Weight makes that balance sheet legible to the network as a normalized commitment score. With a deep bond and a long renewal history, a machine is served first, reaches further into peaqOS, and qualifies for financing. In day-to-day operations, its payments clear and its services get bought because counterparties can instantly verify what stands behind them. 

Crucially, Economic Weight cannot be bought off the shelf. It is not a liquid token, nor can it be withdrawn, traded, transferred, or sold to third parties. It is earned commitment by commitment, permanently attached to the machine for its active life.

Bonding: How a Machine Buys Its Standing

That commitment starts at activation — priced in US dollars, per machine, per year. An oracle stamps the PEAQ/USD rate, the network bonds the required PEAQ to the Machine ID, and the operator sees a dollar price. They never have to touch the token.

Operators pay in stablecoins such as USDT, with the bonded PEAQ sourced from the Activation Token Provision Pool at the stamped rate — or they bond PEAQ directly from their own wallet.

The pool is also a fiat gateway. Operators can pay by card or bank transfer; the payment converts to stables onchain, and the pool settles it into the bond. An enterprise can activate an entire fleet without ever holding a token.

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Machine Activation: From Dollar Price to Economic Weight

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Unlike traditional staking or escrow, bonded capital is non-recoverable and permanently tied to the Machine ID for its active life. This permanence is critical: a commitment that cannot be faked, borrowed, or unwound gives a machine true economic standing onchain.

Because activations are priced in US dollars but bonded in PEAQ, the architecture creates an automatic counter-cyclical driver. If the token price drops, a fixed-dollar activation locks up a larger quantity of PEAQ. As a result, supply absorption naturally strengthens during market downturns.

Finally, machine exit acts as an ongoing deflationary mechanism. A lapsed machine receives a 14-day grace window before entering a 14-day runoff period. During runoff, accumulated credits are forfeited and the bonded position decays — splitting 50% as a permanent supply burn and 50% to the Treasury. 

Activation Tiers: Pricing Access to peaqOS

What does activation actually buy? Access to peaqOS, which is organized into six functions — and the function set is where the value becomes concrete.

Activate issues cross-chain machine identity. Qualify builds each machine’s credit score — computed and attested by Trust Validators from verifiable criteria like availability, service completion, and renewal consistency — and serves it to anyone who needs to check.

Scale runs machine commerce: payment coordination, escrow settlement and cross-chain value settlement. It is also home to Machine Markets, where machine services are discovered and sold — live today on robotic.sh, where a robot buys navigation, compute, or AI inference and settles onchain.

Monetize gives every machine the rails to sell the goods and services it produces, and Stream does the same for its data. Verify covers chip certification, operator verification, and validator adjudication.

Each function is a service machines pay for, so every new function that goes live widens what the network earns from. And this catalogue is an initial set — coordination services expand as new peaqOS functions and machine patterns go live.

Machines activate at one of three service tiers, priced per machine per year in US dollars.

A tier defines three core dimensions: functional access across peaqOS, tier-point accrual for long-term Bonding Rewards, and progressive coordination fee discounts — with Basic halving per-event costs and Pro cutting them by 75%.

Higher tiers represent a deeper economic commitment. By bonding more PEAQ, a machine builds greater Economic Weight — translating capital alignment into discounted coordination fees, priority handling, stronger trust signaling, and verifiable provenance. 

This functional reach spans from from identity at Entry to credit rating and hardware attestation at Basic, to advanced credit rating, advanced verification, and rating-backed financing at Pro.

The Token Flow: Two Sources, Four Allocations

Economics 2.0 runs on a unified economic model fed by two distinct value streams, distributed on a single schedule. 

The first stream is the PEAQ Flow, built from newly issued PEAQ and network transaction fees. 

The second consists of coordination fees, collected in the native currency of the chain where each event occurs — such as ETH, SOL, or USDT — and distributed entirely unconverted, splitting 50% to the Treasury and 50% to Trust Validator staking. This no-conversion policy is intentional. Swapping fee revenue back into PEAQ would pull value out of the very ecosystems peaq’s machines do business in. By leaving fees in their native denominations, peaq actively participates in those economies instead of taxing them.

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Coordination Fee Distribution

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PEAQ Flow

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The PEAQ Flow splits four ways, and each allocation does a specific job.

Trust Validator staking, 30%. Pays for attestation work and the staked capital behind it. This is the layer that makes machine claims credible, and the only public staking venue in the ecosystem. And the PEAQ Flow is only one of three income streams: validators and their delegators also earn half of all coordination fee revenue — in the currencies it was collected in — and half of the USDT proceeds from activation settlements.

Machine Pool, 30%. The Machine Pool fuels network expansion by allocating PEAQ Flow revenue back to operators through two specialized, non-transferable network credits (not liquid yield):

• Bonding Rewards: Earned via accumulated tier points to reward sustained operator commitment over time.
• Growth Credits: Distributed in proportion to real service revenue and usable for exactly one thing — bonding new Machine IDs.

This architecture creates a self-funding expansion loop: productive fleets earn credits that activate new machines at zero cash cost. The onchain split between both instruments recalculates automatically. At genesis, roughly 65% flows into Growth Credits to aggressively subsidize fleet expansion. As the network scales, the balance gradually shifts toward Bonding Rewards — crossing 50/50 at 3.75 million active machines — while maintaining a permanent 10% floor for onboarding credits. This ensures peaq heavily funds adoption early on before naturally transitioning to focus on long-term operator retention

Treasury, 20%. The ecosystem fund: grants, infrastructure, liquidity support, and governance-directed initiatives, managed by the peaq Foundation until onchain governance matures.

Activation Token Provision Pool, 20%. Sources the PEAQ that bonds during activations and renewals. It is not a treasury that accumulates — PEAQ flows in each period to fund that period’s activations, and any remainder is distributed the same way as everything else.

Every unit of the flow lands staked, bonded, or credited. None of it is sold.

Economic Value Accrual and Supply

PEAQ follows a disinflationary schedule. 4.2 billion at genesis. Issuance starting at 3.5%, falling 10% a year to a 1% floor. Hard-capped at roughly 5.67 billion. That floor funds trust validation, growth credits, and the Treasury until the cap is reached — designed so that real network revenue progressively replaces issuance as the dominant incentive source.

That is how PEAQ enters circulation. Economics 2.0 changes how it leaves.

At today’s 3.3 million machine base, initial bonding demand alone represents roughly 38 million PEAQ at the paper’s reference rate ($0.02) — permanently locking up about 1.6% of circulating supply. Because pricing is denominated in USD, lower market prices mean each activation absorbs an even greater quantity of tokens.

Illustrative only. None of these charts is a forecast. Actual bonding and income depend on adoption, tier mix, and market conditions.

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As network adoption compounds, four structural forces act directly on circulating supply: 

• Permanent Absorption: Every activation permanently locks PEAQ out of circulation. When funded via Growth Credits, this absorption occurs at zero cash cost to the operator. Furthermore, tier mix accelerates lock-up — high-value assets like industrial robots and service fleets operate at the Pro tier where bonds run deepest, ensuring absorption scales by machine capability rather than just device count.
• Deflationary Runoff Burn: When a machine leaves the network, 50% of its remaining bonded position is permanently destroyed rather than returning to circulation.
• Reward Recycling: Bonding Rewards can only be applied toward annual renewal costs, preventing incentive emissions from hitting the open market as liquid tokens.
• Scaling Validator Collateral: Minimum stake requirements for Trust Validators scale alongside total machine count, locking up additional PEAQ supply regardless of token price.

The Transition: Migrating Stakers and Bonding 3.3 Million Machines

For stakers: Capital moves into Trust Validation—the sole public staking venue under Economics 2.0. Staked PEAQ shifts from securing block production to backing real-world machine trust, earning from both PEAQ emissions and foreign-currency fee flows. Delegators retain full choice over which operators to back, rewards stay proportional, and the 14-day unstaking window remains unchanged.

For validators: Existing chain validators have a clear path into the new architecture. Eligible validators will migrate into Trust Validation — taking on validation work and earning across all of the network's income flows. In parallel, a selection of validators will be appointed to the permissioned chain validation set, continuing to secure consensus as operational infrastructure. Full guidelines and eligibility will be published alongside transition docs.

For machines: All 3.3 million active Machine IDs migrate directly into the bonding model with their identities, event histories, and standing fully intact. Economics 2.0 launches with an established installed base from day one.

The timeline: Nothing switches overnight. Both systems will run in parallel during a defined transition window, backed by detailed guides and a dedicated Q&A before any migration begins.

Set the Machines Free

The Purple Paper established the foundation: in a Machine Economy that runs across many chains, the scarce resource is not blockspace — it is neutral, verifiable coordination. Economics 2.0 turns that into token architecture, and the architecture comes down to one mechanism.

Every machine that joins creates demand that is known in advance. Activation bonds PEAQ to the machine; every renewal adds to it. If the operator pays in stablecoins, PEAQ is bought at settlement. If they bond directly, PEAQ leaves circulation.

Either way, the moment a machine activates, everyone can already see what follows: tokens bought over the years ahead, or tokens taken out of supply. Multiply that by millions of machines, and the point of Economics 2.0 is simple — machine adoption is token demand, visible before it happens.

peaq began by giving machines identity. Economics 2.0 gives every DePAI, DePIN, manufacturer, and traditional company an economy to build on, while machines settle in the currency they choose — increasingly stablecoins. This is Robot Money at full scale: stablecoins carry the money, PEAQ carries the trust, and this is the architecture it runs on.

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