RWA Tokenization

At the heart of PinLink’s innovation lies its unique DePIN RWA-Tokenization model. The model is designed to:

• Reduce the costs incurred by AI developers when procuring physical infrastructure assets such as GPUs, TPUs, CPUs and cloud storage capacity.

• Create more flexible monetization options for DePIN asset owners

• Create opportunities for users who don’t own DePIN assets to earn a passive income stream.

It works as follows:

Step 1: Bob is the owner of a DePIN asset. Bob connects his asset (eg a GPU) to the PinLink network.

Step 2: An RWA ERC-1155 representing the DePIN asset is minted and ownership of the RWA ERC-1155 is transferred to Bob.

Step 3: AI developers can rent the DePIN asset's capacity by paying a Service User Rental Fee in $PIN tokens.

Step 4: Profits from the Service User Rental Fee are sent to a contract associated with the RWA ERC-1155 representing the asset that is being rented.

Step 5: Until Bob sells fractional shares of his RWA to passive income-seeking 3rd parties, all profits from the Service User Rental Fees will be distributed to Bob.

Step 6: Once the asset has started generating revenue, Bob may choose to sell fractions of the RWA to third parties who want to earn a share of the income generated by the underlying asset.

Step 7: For example Bob may sell 30% of the RWA to passive income-seeking Mike, 30% of the RWA to passive income-seeking Julia, and keep 40% of the RWA for himself. Mike and Julia will pay an RWA Purchase Fee of a sufficient up-front amount to incentivize Bob to sacrifice the proportional share of the asset’s future rental income. RWA Purchase fees must be paid in ETH or USDT.

Step 8: From then on, profits from the Service User Rental Fees will be split proportionally between the fractional holders of the RWA ERC-1155 eg in the above scenario, 40% of the Service User Rental Fees would be distributed to Bob, 30% to Mike, and 30% to Julia.

Step 9: Meanwhile, 20% of ETH/USDT RWA ERC-1155 Purchase Fees are taken as a commission by PinLink and put into an ever-growing Service User Rebate Fund. The Service User Rebate Fund is invested in low-risk, yield-bearing assets, examples of which could include; DAI Savings Rate Earning Strategies, Ondo US Dollar Yield and US Treasuries Strategies, or Pendle PT-YT Strategies. The yields are used as rebates for Service Users, leading to discounted pricing for the AI developers renting the services. Because the Service Rebate Fund is generating extra income over and above the cut of the RWA Purchase fee, the overall capital in the PinLink system is sufficient to create capital efficiencies for every stakeholder in the value chain.

In addition to the RWA Sales Commission, PinLink also takes a 2% Protocol fee on all Service User Rental Payments and RWA Purchase Fees.

A full summary of the flow of funds can be found in the flowchart below: