AI is one of the most disruptive technologies of this century, with the potential to radically transform the world as we know it. But with great power comes great responsibility, and the rapid growth of AI technology is also raising many concerns, notably around the centralisation of power and resources, the embedded biases within various models, the proliferation of deep fakes, and issues around data privacy.
Fortunately, the inherent properties of blockchain and crypto technologies offer potential solutions to some of these issues. As such, there is a case to be made that the successful design and scaling of the right crypto and AI synergies could represent a trillion-dollar market opportunity.
As always, big market opportunities attract significant pools of capital and talent, and recently, we have seen the emergence of a wave of crypto projects aiming to improve the entire AI stack. Among them, Privasea has emerged as a particularly interesting one.
An overview of Privasea
Privasea is a DePIN (Decentralised Physical Infrastructure) network designed to prioritise the privacy and security of data throughout the AI data computation process. To achieve this, it uses an innovative technology called Fully Homomorphic Encryption (FHE), which enables computations to be conducted on encrypted data, producing results that are identical to computations performed on unencrypted data. This ensures that privacy of the data is preserved throughout the entire workflow, including AI model training and evaluation.
Source: Privasea
The full tech stack
The full tech stack of privasea is composed of several components working in synergies to ensure data privacy for AI models:
- HESea Library: This component leverages FHE to enable secure computations of encrypted data. This ensures that data privacy and security are maintained throughout AI tasks.
- Privasea API: The Privasea API provides developers with an application programming interface to integrate privacy-preserving AI capabilities into their applications. It offers a range of tools and functionalities for seamless interaction with the network.
- Privanetix: Privanetix empowers secure computation by utilising high-performance nodes.
- Smart contract kit: This component promotes fairness and active participation within the Privasea AI network and ensures transparency, immutability, and trust in the execution of AI tasks.
Source: AI-meda Research
ImHuman App
One of Privasea's flagship products is the ImHuman App. Released on the App Store and Google Play, this app offers a solution for secure KYC in face recognition by using FHE machine learning to protect user biometrics and combat bots and Sybil users through secure human verification. The launch of this app was highly successful, with over 250,000 proof of humanity NFTs minted on Solana in its first 15 days.
The closest comparable to the ImHuman App is Worldcoin. However, we note that the FHE properties of the ImHuman App makes it much more secure and attractive.
Source: Privasea
What makes Privasea unique?
Privasea stands out in many ways. Here are a few points worth noting:
- First mover advantage: Privasea is the first to create and use FHE-based applications in the machine learning stack.
- Tech foundation: The project includes a range of proprietary technologies such as the HESea Library, Privasea API, Privanetix, and the Privasea Smart Contract Kit, all designed to ensure data remains secure.
- Compatibility: Privasea’s solutions work well with both Web2 and Web3 platforms, making them versatile for different users and applications.
- Decentralization architecture: Decentralization and blockchain technology brings efficiency to the workflow. This enables Privasea to provide cheaper services.
Team & Investors
The Privasea team is composed of well-rounded talent with expertise in data security, blockchain, AI, and entrepreneurship. This includes five researchers and two professors from top universities.
The current CEO and Founder of the project is David Jiao , a seasoned entrepreneur with academic background in Computer Science and Telecommunications, and over 15 years of experience in software and system engineering. On the other hand, the research side is led by Ting Gao . With a PhD in Applied Mathematics, Ting is an ex-Machine Learning Engineer at Twitter and seems the right fit to be the Chief Research Officer of Privasea. Additionally, Jeffrey Duan, a professor at the Illinois Institute of Technology, serves as the Chief Science Advisor, bringing academic rigor to the project.
On the investment side, Privasea has previously raised $10 million from a wide array of investors such as Binance Labs, OKX Ventures, or Laser Digital.
Source: Privasea
Tokenomics
PRVA token is an ERC20 token that serves as the utility token within the Privasea AI network and aims to play a crucial role in facilitating transactions, incentivising stakeholders, and
enabling on-chain governance.
The maximum supply of PRVA tokens is set at 1 billion, and the distribution is managed to balance the needs of the ecosystem. A portion of the tokens is allocated for miners and stakers, incentivising contributors to the network, while another portion is reserved for marketing, development, and ecosystem growth.
As such, this is the intended initial distribution of PRVA:
Source: Privasea Whitepaper
On the other hand, the value for PRVA tokens is driven by the demand for the network’s services. Specifically, the token serves the following purposes:
- Transactions: PRVA acts as a medium of exchange within the network. This is key to allow users to access services provided by the Privasea network.
- Incentives and rewards: PRVA tokens are intended to incentivize the network of node contributors and ensure their integrity.
- Governance and voting: Token holders are granted the right to participate in the governance of the Privasea ecosystem.
- Staking and network security:Token holders have the possibility to lock up their PRVA as a form of collateral, contributing to the security of the network.
- Access to exclusive features: PRVA holders can have the opportunity to access additional features within the Privasea network, as well as with ecosystem partnership.
An exclusive opportunity with Privasea combo nodes
At the current stage of this project, a strong case can be made that the best way to gain exposure to this opportunity is by becoming an early operator of Privasea combo nodes.
These nodes include a mix of Workheart nodes, which are PoW (Proof of Work) USB hardware that performs critical computations using Fully Homomorphic Encryption (FHE) and serves as the backbone of Privasea's DePIN architecture, and Starfuel NFTs, which act as reward multipliers for Workheart nodes and provide access to exclusive airdrop opportunities and new partnership tokens.
While the maximum supply of Workheart nodes is set at 20,000, Privasea will only produce 5,000 combo nodes.
Rewards distribution
In total, 6.66% of the PRVA token supply will be allocated to the Workheart nodes. Those rewards are expected to be distributed within a time frame of 36 months and it is worth mentioning again that combo nodes will be earning a reward multiplier.
Further, only the 5,000 combo nodes will be eligible to an exclusive PRVA airdrop allocation accounting for 1% of the total token supply.
Valuation and Scenario Analysis
It is important to note that the potential return on investment for combo node operators is influenced by various factors, notably the numbers of nodes that are running and sold out. Therefore, for this study, we are using Privasea’s assumptions and expected scenarios to derive the potential rewards of these nodes.
Here are the set of assumptions we are using:
- In the first 3 months of rewards, only the 5,000 combo nodes are running.
- For the subsequent 3 months, 15,000 nodes are running (5,000 combo and 10,000 Workheart). For the rest of the period, all 20,000 nodes are running (5,000 combo and 15,000 Workheart).
- Running cost per combo node for the entire 36 month period is expected to be $10.8.
- In addition, the 5,000 combo nodes will equally share an airdrop allocation of 1% of the PRVA token supply.
With that in mind, here is a potential return simulation over the whole period:
For better visualisation, here is a table showing the expected return on investment over the whole period:
Lastly, using the same set of assumptions, this is the expected return on investment after the first 6 months of rewards:
