Are Robots Going on the Blockchain?
I have been watching videos of robots walking, and this morning while taking a walk, I was thinking: what if robots operated on the blockchain?
The core of DeFi lies in automating financial processes through code, while robots are dedicated to the automation of physical tasks. The combination of the two is a natural extension of automation development. If we believe in the power of programmable money, smart contracts, and artificial intelligence, then extending this programmability to robots—essentially physical programmable AI agents—seems to be the next logical evolution.
One of the strongest leaders in today’s robotics field is Yushu Technology. While robots like those from Yushu Technology are still many years away from truly entering mainstream applications, the idea of putting robot data on the blockchain sounds like a far-off fantasy. However, that doesn’t stop us from daydreaming.
How Will RobotFi Be Realized Today?
Current robots do not directly interface with the blockchain at the hardware level. They lack built-in blockchain nodes or cryptographic processors (this interesting idea will be discussed later). Therefore, to bring existing robots on-chain, we need a bridging or intermediary layer (usually off-chain services or servers) to connect robots and the blockchain. Each robot also needs to be assigned a dedicated wallet address.
Yushu robots utilize their existing communication capabilities (such as Wi-Fi, Ethernet, and potentially supported cellular networks) to connect to off-chain services via standard network protocols (like HTTP, WebSocket, etc.). Subsequently, the off-chain service interacts with the blockchain using standard blockchain libraries and APIs (such as Web3.js, Ethers.js).
Smart contracts on the blockchain can trigger Yushu robots to perform actions through off-chain services. For example, when the off-chain service detects that a payment has been completed to an address associated with the robot, it sends a command to the robot to execute a specific task.
I also envision future robots being programmable like smart contracts, capable of executing various “action scripts or robot strategies.” These strategies could be created by independent developers, allowing robots to be viewed as physical smart contracts or AI agents.
The initially created scripts might be in a “Wild West” state, where you can program robots to perform various operations except for certain prohibited actions. At that time, there will be an independent security or management system for real-time monitoring to prevent the robots from engaging in any dangerous behavior. Again, I emphasize that we are still dreaming.
This will enable robotics companies to focus on the technology of robots themselves, rather than robot services. Robot services will be “outsourced” to developers for implementation. On-chain robot services operating through off-chain services will be referred to as RobotFi.
In other words, RobotFi will be a vertical track where participants can earn on-chain profits by funding or developing robot-related activities.
What Are the Application Scenarios of RobotFi?
Over-collateralized housekeeping rental services
One of the most popular application scenarios for humanoid robots is housekeeping services. The initially running robot services may carry many risks. Robots may malfunction, make errors, become damaged, or fail to achieve the expected results. Traditional rental and service models rely on trust in the platform or service provider.
This is precisely what makes RobotFi interesting. Developers can no longer rely on centralized insurance companies or corporate guarantees, but instead develop off-chain services that bring robots on-chain and further develop supporting services for robots (such as housekeeping services). To ensure the safety and reliability of the service, developers can attract on-chain LPs to inject collateral, which will serve as insurance and economic security. In return, LPs will receive actual profits generated by the service.
Mechanism Analysis:
Robot strategy insurance pool: LPs deposit collateral assets into the pool to provide risk protection for robot strategies and in return, obtain the profits generated by those strategies.
Robot strategy insurers: Strategy creators can purchase risk protection for their robot strategies from the insurance pool, with specific premiums depending on factors such as robot type and asset scale, risk coefficients of executing tasks, and the selected coverage amount.
Smart contract-controlled payout mechanism: The insurance is managed by smart contracts, which define the specific conditions that trigger payouts. Possible triggering events include the failure of a robot strategy, which would trigger payouts to LPs (similar to a slashing penalty mechanism) to compensate users who purchased robot strategy services. If the task is successfully completed and no anomalies occur, the robot’s diagnostic system will report the task completion status to the off-chain service and issue payments to the LPs.
In the above example, although I described robots and robot strategies separately, if we were to combine robots and robot strategies into a single rental item, the operational mechanism would work equally well. In this case, the security protection could extend to the robot itself. For instance, if the robot were damaged during the rental period, the related compensation would be paid to the robot owner.
Renters may also need to undergo certain KYC verification (to prevent them from running away with the robot), and the renter’s creditworthiness is likely to affect the developer’s insurance premium costs. For example, if the renter has a good on-chain reputation and/or a high income (verified through zero-knowledge proofs), the premium that the developer needs to pay would be lower, and vice versa.
Summarizing by Analogy to Blockchain:
Robot (Infrastructure/Chain): Provides core infrastructure, namely a programmable robot with high performance on the physical level.
Robot service (On-chain application): Specific tasks programmed by experts, similar to applications built on the robot infrastructure.
Robot insurance (Collateral provided by LPs): LPs’ collateral acts as safety and economic security for robot services. They provide trust, security, and operational mechanisms for risk and fault handling in the RobotFi ecosystem, just as collateral in an automated verification system (AVS) is used to secure on-chain transactions and network operations.
Strictly speaking, you do not have to purchase insurance. While obtaining robot services through on-chain payments has certain advantages, these advantages are not significant. Since robots exist in the real physical world, purchasing insurance can effectively enhance consumer trust and acceptance, whereas uninsured services may struggle to gain the same level of user recognition.
Economic Alignment and Incentives for Good Robot Behavior
This insurance/collateral mechanism system creates strong economic incentives for good robot behavior and responsible strategies, benefiting all participants:
Incentives for LPs:
- Premium income: LPs earn income from the premiums paid by robot owners. This income needs to be attractive enough to incentivize them to lock funds in the insurance pool.
- Risk-adjusted returns: Differentiated insurance pools can be established for various risk levels (robot types/task categories). High-risk pools compensate for payout risks through higher yield rates, allowing LPs to choose their risk-return preferences.
Incentives for robot owners/strategists:
- Reduced financial risk: The insurance mechanism helps mitigate significant losses caused by robot malfunctions, damages, or liability incidents, reducing operational risks and increasing the willingness to hold robots.
- Establishing competitive advantages: Robot owners who provide insurance services can differentiate themselves in the market, gaining higher rental premiums by building user trust.
Incentives for robot manufacturers/developers:
- Demand for reliability: The insurance system indirectly pushes manufacturers to enhance product reliability. Robots with low failure rates and good safety records will enjoy lower premiums, enhancing market competitiveness.
- Data-driven iteration: Insurance claim data (types of failures/damage causes) provides manufacturers with insights for improving product design, driving technological optimization.
Incentives for users/renters:
- Trust building and risk mitigation: The insurance mechanism enhances users’ confidence in RobotFi services, providing financial protection against economic losses due to failures when renting robots.
- Access to high-end equipment: The insurance mechanism reduces the economic risks of renting high-value robots, encouraging more advanced equipment to enter the rental market.
- Reasonable compensation mechanism: When robots malfunction or fail to execute tasks, users can receive compensation through insurance payouts, optimizing the service experience.
Challenges Facing RobotFi
While the concept of RobotFi is intriguing, there are numerous challenges, and we are far from being ready. The main challenges focus on the centralization/data verifiability mechanisms in the robotics field and the quantifiable assessment systems for insurance payouts, which are two core aspects.
Dependency on off-chain services: As discussed earlier, under current technological conditions, dependence on off-chain services is nearly inevitable. These services become the centralized control nodes of the system and potential points of failure. Whoever controls this service will have significant influence over the RobotFi system.
Reliability of insurance payouts and verifiable data: Insurance payouts rely on verifiable evidence of robot failures, damages, or task execution failures. How to reliably and trustlessly transfer this data from the physical world to the on-chain system is an incredibly complex challenge.
Fair claim assessment: In a decentralized RobotFi context, how can we determine whether a claim is valid and whether the payout amount is reasonable? Traditional centralized insurance companies rely on adjusters, but how should a decentralized system achieve this?
Final Thoughts
This is not a serious article about RobotFi, but rather a potential vision. While the concept of RobotFi is interesting, its feasibility depends on whether we can overcome many significant technical, economic, and centralization challenges.
What remains unclear is whether the concept of RobotFi offers sufficient advantages compared to entrusting the entire robotics ecosystem to a few key companies, which design functionally fixed robots on their own.
This article is collaboratively reprinted from: PANews