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In the nascent field of DePIN (Decentralized Physical Infrastructure), the Anyone Protocol (formerly ATOR) stands out thanks to its emphasis on enhancing internet privacy and building out its own decentralized network of relay nodes utilizing custom hardware. At the core of the Anyone Protocol is the establishment of an open-source, onion-routing privacy network designed for absolute openness, eschewing centralized control by directory authorities. 

The current ISP and VPN landscape is fraught with significant security and privacy challenges that raise concerns for internet users worldwide. Local ISPs often maintain extensive logs, including metadata, which can be accessed by government agencies and other entities, compromising user privacy. While VPNs are touted as solutions to these issues, many are centralized companies that also keep logs of user activity, undermining their effectiveness as privacy tools. Additionally, the erosion of net neutrality further exacerbates these problems, leading to unequal access to information based on geographical location and ISP policies. This landscape is complicated by increasingly intrusive legislation aimed at monitoring and controlling online activity, which stifles free expression and raises the specter of pervasive surveillance. Consequently, internet users face a complex and often hostile environment where their privacy and access to information are continually at risk.

The openness and inclusivity of Anyone ensures that all non-malicious developers, relays, and participants can utilize the network without obstruction. Anyone leverages a globally distributed network of relays, rewarding participants with ANYONE tokens for contributing their bandwidth, computing power, and services to the network. Additionally, Anyone aids in the anonymous onboarding of mainstream web services, ranging from storage solutions and endpoints to private directory authorities for online services.

DePIN: Crypto’s Growing Use Case

As the cryptocurrency space has evolved since the early days of Bitcoin, significant strides have been made toward enhancing infrastructure to accommodate the widespread adoption of blockchain applications in a multitude of sectors. This progression includes developments in scaling solutions such as Layer 2s and data availability, advancements in privacy through Zero-Knowledge proofs, improved user experiences via Account Abstraction, and the introduction of DePIN. 

The concept of Decentralized Physical Infrastructure Networks (DePIN) signifies a paradigm shift toward community-driven, decentralized hardware networks incentivized by tokens. This innovative approach aims to dismantle the monopoly of traditional coordinators, transforming network participants into invested stakeholders through the use of native tokens. Since the previous bull market, DePIN has ventured into high-value sectors, including Artificial Intelligence/Machine Learning (AI/ML), 5G, Wi-Fi, bandwidth, vehicle technology, and energy, among others.

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DePIN introduces several novel elements to the traditional model, specifically around asset structure and participants within the system. Within a DePIN project, physical assets are integrated into the native blockchain architecture, thereby converting the services or data rendered by hardware into tokenized assets. This process enables permissionless trading and staking, broadening the scope of financial operations within the network.

Additionally, DePIN unlocks the ability to make everyone a stakeholder or participant in the project, from the hardware creators to the miners and, of course, the token holders. This ability, coupled with lower barriers to entry, attracts a wider, more global array of participants than any one company traditionally could. Crucially, DePIN's model of converting all parties into stakeholders through cryptocurrency assets promotes active engagement, enhancing the ecosystem's vitality and surpassing traditional buy-and-sell dynamics. This strategy not only increases participant stickiness but also strengthens the network's robustness and sustainability through intricate interconnections.

Unlocking Global Resources and Coordination

DePIN networks represent a transformative approach to constructing and managing real-world infrastructure through the strategic use of incentives and blockchain technology. At the heart of these networks lies the concept of rewarding participants with network tokens or other forms of value, effectively motivating them to contribute their resources and efforts. This system aligns economic incentives with the objective of building global, decentralized physical infrastructure, thereby not only fostering innovation but also providing tangible benefits to those who invest their resources. Among the key advantages of DePIN networks are their ability to drastically increase project completion speeds—achieving rates anywhere from 10 to 100 times faster than traditional methods—thanks to the decentralized, token-incentivized participation. Additionally, they offer cost-effectiveness by reducing management expenses through the elimination of expensive intermediaries.

This evolving landscape of decentralized networks is increasingly emphasizing the integration of physical hardware into its ecosystem, presenting a paradigm shift from centralized manufacturing to a more open and competitive environment. This transition from reliance on single entities for hardware production towards a permissionless system of qualified manufacturers promises to mitigate monopoly risks and eliminate bottlenecks.

At the heart of these networks lies the protocol, which coordinates the diverse components of the ecosystem. Pricing structures for services are critically determined at the protocol level, influenced by various factors including competitor pricing, demand fluctuations, hardware performance, and overall market dynamics. Transparency in rule-making, especially concerning reward mechanisms, is essential for trust and fairness, with an ideal scenario being on-chain automation to ensure these qualities without compromising on flexibility for future adjustments.

The role of miners in a typical DePIN project, who operate the hardware nodes, is critical as they are responsible for the health and robustness of the network. They assess total costs, including hardware acquisition, onboarding, maintenance, and operational fees, alongside the time and effort invested in network participation.

Ultimately, the network must cater to the end-users and the purchasers of these decentralized services. Understanding and addressing their varied goals—ranging from cost efficiency and security to performance and ease of use—is crucial for network adoption. The user experience, especially in terms of onboarding and transaction processes, must be seamless, possibly integrating traditional payment methods alongside cryptocurrency options to accommodate a wider user base.

However, several critical challenges remain. Achieving product-market fit is imperative for the success of DePIN initiatives, necessitating a sufficient supply to meet demand.

DePIN Obstacles So Far

The exploration of decentralized DePIN projects offers a compelling insight into the challenges and intricacies involved in bridging the gap between the pioneering aspirations of blockchain technology and the pragmatic demands of real-world application. Regulatory complexities present a formidable hurdle for DePIN projects as they endeavor to navigate a labyrinth of legal requirements that vary significantly across jurisdictions. The physical deployment of such networks necessitates adherence to an array of regulations that encompass data management, local governance compliance, and personal safety standards, among others. This regulatory landscape requires projects to possess not only technological prowess but also a keen understanding of legal frameworks to ensure seamless integration and operation within the physical realm.

Performance considerations further delineate the competitive landscape for DePIN projects. While the decentralization ethos promises lower fees and democratized access, achieving performance parity with centralized services remains a daunting challenge. The decentralized distribution of resources, such as GPUs, introduces logistical complexities that can impede performance, especially for intensive applications requiring consolidated computational power. Without matching the speed and efficiency of centralized services, decentralized projects risk undermining their cost advantage, necessitating innovative solutions to bridge the performance gap.

The issue of demand failure further complicates the landscape for DePIN projects. While these initiatives often experience rapid growth on the supply side, driven by token incentives for network expansion, this does not inherently translate to demand-side adoption. The creation of a supply surplus without corresponding usage underscores the critical need for a genuine product-market fit. Competing against established Web2 vendors demands not only technological innovation but also strategic market positioning and customer engagement to foster adoption and usage.

Anyone Network

The Anyone Protocol (formerly known as ATOR) recently announced its rebrand, along with a token migration. Current holders of ATOR tokens will have the opportunity to exchange their ATOR tokens for a new token issued by The Foundation for Anyone. ATOR holders will have a six-month window to exchange for their Anyone tokens. After this period, the exchange option will no longer be supported.

Beyond the rebrand and token migration, the Anyone Protocol aims to improve the adoption of online privacy through its own onion routing network, a sophisticated technology designed to obscure a user's IP address from every participant within the network, including the end user and any third parties. This method ensures complete anonymity and secures personal information by employing a three-hop system where data is encrypted multiple times - once for each relay it passes through. Such a design ensures that no single relay can ascertain both the origin and destination of the data, thereby safeguarding user anonymity whether they are browsing or utilizing services within the network.

AES (Advanced Encryption Standard) is a symmetric encryption algorithm widely used for securing data. It was established by the U.S. National Institute of Standards and Technology (NIST) in 2001. Notably, AES encryption is used in Tor circuits and is a standard for both industry and military applications, similar to the technology used in VPN tunnels. The AES encryption standard is fully open-source and peer-reviewed.

The Advanced Encryption Standard (AES) employs a symmetric key algorithm, which means the same key is used for both encryption and decryption processes. To ensure data security, this key must be kept confidential. AES operates as a block cipher, encrypting data in fixed-size blocks of 128 bits. The data is divided into these blocks, and each block is encrypted separately. Additionally, AES supports three different key sizes: 128-bit, 192-bit, and 256-bit. Longer keys provide stronger security but require more computational resources.

AES offers robust security, making it resistant to various cryptographic attacks, including brute-force attacks. Its efficient design allows for fast encryption and decryption processes, making it suitable for both software and hardware implementations. Moreover, AES is highly versatile and is used in a wide range of applications, from securing communication channels to encrypting sensitive data on storage devices.

Incentive Mechanisms

Central to the expansion and effectiveness of the Anyone Network is a well-structured incentive model aimed at scaling participation. Relays contributing to the onion-routing network receive ANYONE tokens as a reward for the valuable bandwidth they provide. The allocation of these rewards is determined by a consensus weight metric known as Proof of Uptime, which assesses each relay's advertised bandwidth against measurements from other relays in the network. A novel approach to maintaining the integrity of this system is the decentralization of the bandwidth verification process. This is achieved through a verification game that prevents any single entity from limiting the bandwidth of specific relays. Instead, it employs collective measures to identify and restrict malicious relays, thereby ensuring a fair and robust network.

The tokenomics behind Anyone's incentive system is designed to maintain a balance between the supply of tokens and the participation of relays. By capping the total outflow of tokens to relays, the system achieves a self-regulating equilibrium, where the growth in the number of active relays is proportional to the value of the rewards offered. This dynamic serves as the driving force behind Anyone's ambition to establish the fastest and most user-friendly onion routing network globally. The rapid registration of over 2,000 distinct relays within just ~three months of launching in testnet underscores the potential of incentives, education, and community engagement to scale a privacy-focused network.

Ultimately, Anyone is aiming to grow the network through this ambitious initiative to include ~25,000 physical relay nodes along with 200,000 virtual relay nodes, led by its community.  With the current lock requirement to receive rewards, this would see the locking of over 20 million ANYONE tokens, constituting 20% of its total supply, for at least six months. The approach is twofold: it not only strengthens the network with a solid physical infrastructure but also leverages a widespread community-driven virtual framework. Each node, whether physical or virtual, will necessitate the locking of 100 ANYONE tokens for six months, an action poised to tighten the available token supply further. 

Differences Among Competitors

Individuals following the online privacy space, especially readers of Reflexivity Research, may also be aware of other protocols such as Tor and the BitTorrent Chain and wonder how these projects compare. The primary difference between The Onion Router (TOR) and Anyone is their divergent paths toward achieving network decentralization. Tor relies on a structure of volunteer-operated relays, essentially a centralized group of altruistic participants that are responsible for the operations of the network. Anyone, on the other hand, adopts a more contemporary approach by integrating a token-driven incentive mechanism. This model encourages network participation by rewarding users with ANYONE tokens for their contributions to relay operation and overall network support. Importantly, thanks to these incentives, Anyone uses its own onion routing network, which is made up of thousands of nodes and is completely independent of TOR. The incentivization strategy not only broadens the scope of participation but also democratizes network control and ownership. By aligning user contributions with tangible rewards, Anyone aims to construct a robust and diversified user base, enhancing the network's resilience and security.

BitTorrent, on the other hand, is a bit more narrow in focus and primarily deals in digital file sharing. At its zenith, it accounted for over 20% of global internet traffic until it was ultimately acquired by the TRON Foundation in 2018, which subsequently created the BitTorrent Token (BTT). BTT has similar motivations to Anyone in that it's designed to provide financial incentives for operators in the network. However, BTT specifically aims to remunerate file sharing. 

Unlocking Privacy

One aspect that all the aforementioned protocols have in common is the emphasis on digital privacy. The nature of blockchain technology, while revolutionary, inherently exposes transactional data on public ledgers, potentially turning one's financial dealings into a transparent narrative accessible by all. This visibility is part of a broader discourse on modern-day privacy or the lack thereof. Internet privacy, or online privacy, delineates the subset of data privacy concerning the governance of personal information on the web. It embodies the principle that individuals should have authority over how their personal data is collected, shared, and used online. 

Privacy, within the realm of both traditional and digital spaces, serves as the cornerstone upon which individuals exercise control over their personal information, determining its disclosure and distribution. Despite the recognition of privacy as a critical right by various secular tech entities, the insatiable appetite for data—fueling targeted advertising and competitive edge—often leads to its compromise. The relentless pursuit of user data by corporations employing sophisticated tracking technologies underscores the escalating challenges to personal privacy online. The digital economy's voracious appetite for data renders privacy a contested domain, necessitating vigilant management of one's digital identity.

The necessity of anonymity for crypto users emerges from several critical considerations. Firstly, the transparency of public blockchains, while fostering trust and security, equally poses a vulnerability to scams and fraudulent schemes. Knowledge of one's holdings and transaction history can attract malicious actors. Secondly, the linkage of personally identifiable information to cryptocurrency accounts heightens the risk of identity theft, with significant implications for financial security. Additionally, the potential for price manipulation by market influencers, armed with insights into individual holdings, threatens the integrity of investment decisions. Lastly, governmental oversight and potential regulatory actions could impinge upon the freedom and rights of crypto holders, making anonymity a bulwark against such overreach.

Anyone Relay Operators and Hardware

Anyone Relay Operators are the backbone of the Anyone network, facilitating the anonymous routing of internet traffic. By encrypting data and relaying it through a sequence of nodes, these relay operators obscure the digital traces of users, effectively masking their online activities from external observation. This encryption process, reminiscent of layering in an onion, ensures that the origin of the internet traffic remains concealed, bolstering user anonymity against potential surveillance and cyber threats.

A notable innovation within the Anyone ecosystem is the Anyone Relay Hardware, a low-powered computing device designed for ease of use by non-technical individuals. This device not only facilitates participation in the network by contributing bandwidth and computing power but also enables users to route their home internet traffic through the Anyone network. This hardware introduces a paradigm shift in internet access, offering end-to-end encryption akin to a decentralized Virtual Private Network (VPN).

Anyone Token

A distinguishing feature of Anyone is its token-based incentive model. Individuals operating Anyone relays are awarded ANYONE tokens, a strategy that not only motivates broader participation but also enhances the network's robustness. This incentive mechanism ensures a steady stream of relay operators, which is critical for the network’s durability and effectiveness.

The Anyone Incentivization Protocol plays a vital role in enhancing the anonymity and efficiency of a decentralized network by rewarding relay operators with ANYONE tokens for their contributions. This system allows relays to anonymously register their relay stations using their ETH address, thereby enabling them to receive tokens automatically without further actions. The distribution of ANYONE tokens to relay operators is proportional to their network contributions, with the overarching goal of motivating and acknowledging the essential bandwidth they provide. The ANYONE tokens themselves are secured on the Ethereum blockchain and can be moved to the operators’ ETH wallets at their discretion.

Contributions of each operator are quantified based on the bandwidth they contribute to the network, termed "Proof of Uptime," and are measured through a decentralized system. These contributions are then published on Arweave, a blockchain-based permaweb storage solution, ensuring transparency and immutability.

Moreover, the relayed metrics, which showcase the real-time contributions of the relay operators, are not only stored on Arweave but also serve as a foundation for Smartweave contracts within the Arweave ecosystem. Additionally, these metrics are accessible to third parties through a specific request protocol, enhancing the protocol's transparency and utility within the decentralized space.

Smartweave

The Anyone Incentivization Protocol utilizes Smartweave technology on the Arweave platform for a novel approach to token distribution that is both gasless and immutable. This system ensures that tokens, designated as 'distribution layer' tokens, are earmarked for each recipient's ETH address and remain on Arweave until the recipients decide to claim them, transferring them onto the Ethereum blockchain. This process happens on an hourly basis, relying on the consensus weight metrics published on Arweave as its unwavering source of truth, ensuring the distribution process remains trustless as long as these metrics are unanimously verified.

A unique 'wrapped Anyone' token is then circulated within the Smartweave environment, with the details of this distribution accessible to the ETH distribution contract through a validAnyone oracle. This oracle mechanism shifts the responsibility of gas fees for transferring metrics from Arweave to the Ethereum blockchain onto the end-user. Future updates aim to enhance user anonymity by allowing these gas fees to be covered indirectly using the distribution-layer ANYONE tokens on Smartweave, further streamlining the process and bolstering user privacy. For an in-depth understanding of the economic principles behind this distribution model, the protocol's tokenomics paper offers comprehensive insights.

Initial Token Allocation and Supply

The Anyone token, designed as an ERC20 token, has a capped supply limit of 100 million tokens. As of the first quarter of 2024, about 75% of this total supply is in circulation within the ecosystem, which includes liquidity provision pairs and listings on various exchanges. The distribution of the remaining 25% of the supply is strategically allocated to support the long-term sustainability and growth of the network. Specifically, 10% of the total supply is reserved to continuously reward relay operators within the network, reinforcing the incentive for maintaining and operating relay stations. The remaining 15% is earmarked for a range of strategic initiatives, including outreach, partnerships, development efforts, exchange listings, and team compensations. This portion is subjected to a linear vesting schedule over 18 months, ensuring a steady release of funds to support these essential activities while maintaining the economic stability of the Anyone ecosystem.

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Fair Launch and Trading Tax

Anyone operates as a fair-launched token with no presale events or venture capitalist (VC) involvement. This approach runs counter to most token launches in the crypto space and emphasizes an equitable and accessible launch process for all participants. Additionally, in its previous iteration as ATOR, they implemented a “tax” on certain trades that is also fairly unique to most tokens. Specifically, a “4/4 tax structure” on trading activities within the Uniswap WETH/Anyone trading pair was created with the purpose of self-funding the project rather than relying on institutional or VC investments.

The Anyone tokenomics removes this transaction tax system. It's noteworthy that token transfers are also exempt from these fees. The collected fees play a crucial role in fostering the development of Anyone's infrastructure, encompassing software, hardware, educational initiatives, and outreach efforts. Additionally, a portion of these fees is allocated towards automatic liquidity provisioning, with over $1 million USD directed into liquidity pools and subsequently burned, enhancing liquidity and token stability.

Regarding the distribution of rewards for relay operations within the network, a significant adjustment was made after the token was unlocked in August 2023. The source of the 10% rewards shifted from an 18-month vesting schedule to unlocking immediately. This pivot was justified with the aim to enhance the predictability and availability of funds, ensuring the entire 10% allocated for relay rewards is transferred to a vault shortly after the mainnet launch. The tokens designated for these base relay rewards are securely stored across four multi-signature wallets and one locked wallet, maintaining security and control during the testnet phase. 

Collaborations and Partners

Forte Group and FutureMoney Group

Anyone’s strategic partnerships and collaborations are reflective of the project’s primary goal of innovation in digital privacy and security. One of the most notable partnerships is with Forte Group, a 20-year software solutions business. This alliance seeks to utilize Forte's extensive expertise and global reach to empower Anyone's decentralization and digital privacy efforts.  

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Additionally, Anyone recently secured investment from FutureMoney Group, a leading DePIN and Web3 investment group that has invested in numerous other cutting-edge DePIN protocols, such as Hivemapper, Pocket Network, Theta, ANKR, and more.

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Hotspotty

Other pivotal partnerships with Hotspotty and IoTeX also bring distinct advantages to Anyone. Hotspotty is recognized for its pioneering role in deploying Helium nodes across Europe. It also offers an in-depth suite of tools for optimizing hotspot locations, monitoring and managing hotspots with advanced diagnostics, and facilitating robust team and community engagement. Anyone’s collaboration with Hotspotty seeks to harness this extensive toolkit and rich data experience in managing decentralized wireless networks, enhancing the Anyone ecosystem of relayers in the process.

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IoTeX

IoTeX is a blockchain platform built in 2017 that is dedicated to the Internet of Things (IoT) and facilitating autonomous IoT ecosystems on a large scale.  IoTeX introduces a unique architectural approach tailored to the complexities of IoT, ensuring scalable and autonomous device ecosystems. It also promotes privacy as a core feature, which is evident through its innovative features like stealth addresses and ring signatures. The W3bstream protocol, connecting real-world data with blockchain through zero-knowledge proofs, and ioTube’s facilitation of asset transfers across different blockchains significantly enhance Anyone's interoperability and privacy capabilities. This partnership with IoTeX is expected to amplify Anyone's data privacy features, expand its ecosystem through increased interoperability, and unlock the potential for unique IoT applications within the Anyone network. These developments are anticipated to significantly advance the machine economy.

Partners

Beyond big company partnerships, Anyone has also attracted talented individual contributors like Sean Carey, a veteran technology leader with over 25 years of engineering prowess, who serves as an advisor and investor for the Anyone Network. Carey's distinguished career, particularly as the CTO and Co-Founder of Helium, where he was instrumental in driving the network to a $5 billion market capitalization, brings a deep reservoir of technical knowledge to Anyone. His technical expertise, combined with a proven track record of success in blockchain and DePIN, can significantly increase Anyone’s ability to capture a market that has mostly been overlooked.

In a similar vein, the collaboration between Alex Becker, a well-known entrepreneur and digital marketer, and Anyone signals a strategic move towards advancing digital privacy awareness. By leveraging Becker's expertise in digital marketing and entrepreneurship, the collaboration can highlight Anyone’s concerted efforts concerning user empowerment and privacy while also potentially unlocking new use cases (as Alex alludes to below).

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Roadmap

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Conclusion

The Anyone Protocol personifies a privacy-focused force within the DePIN landscape, dedicated to addressing the significant privacy and security challenges inherent in the current ISP and VPN ecosystems. By leveraging a decentralized network of relay nodes and incentivizing participation through ANYONE tokens, the protocol promotes a more secure and private internet experience. This innovative approach aligns with the broader evolution of cryptocurrency applications, integrating physical infrastructure with blockchain technology to create a robust and inclusive network. The strategic partnerships and collaborations, along with the recent rebranding, further bolster Anyone’s ambitious mission. As DePIN projects continue to navigate regulatory complexities and performance hurdles, Anyone’s commitment to privacy, transparency, and community-driven development positions it as a formidable player in the DePIN space moving forward.

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Anyone Protocol Socials:

• Twitter
• Website

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Disclaimer: This report was commissioned by the Anyone Foundation. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.