Machine-to-Machine (M2M) payments use digital wallets to facilitate real-time, trustless, and programmable financial transactions between devices and represent one of the most compelling and natural use cases for blockchain technology—enabling exciting new economic models for smart infrastructure, IoT interoperability and a tremendous diversity of potential on-demand services.

Despite this untapped potential, the industry as a whole has thus far made surprisingly little progress in developing real-world M2M payment applications. While DeFi has made great strides in innovation, adoption and functionality, its focus remains centered on user authentication, ownership verification, and user experience. These priorities, while essential for human-driven finance, do not translate well to autonomous devices that require lightweight, continuous, and self-executing payment mechanisms.

What makes Althea L1 unique is its design focus: purpose-built, scalable M2M payment solution, designed specifically to service applications like the Althea Protocol, which require secure, real-time, automated financial transactions between devices.

Machine-to-Machine (M2M) payments use digital wallets to facilitate real-time, trustless, and programmable financial transactions between devices and represent one of the most compelling and natural use cases for blockchain technology—enabling exciting new economic models for smart infrastructure, IoT interoperability and a tremendous diversity of potential on-demand services.

Despite this untapped potential, the industry as a whole has thus far made surprisingly little progress in developing real-world M2M payment applications. While DeFi has made great strides in innovation, adoption and functionality, its focus remains centered on individual actions, not machines or automation. These priorities, while essential for human-driven finance, do not translate well to autonomous devices that require lightweight, continuous, and self-executing payment mechanisms.

Althea L1 is a purpose-built, scalable M2M payment solution, designed specifically to service applications like the Althea Protocol, which require secure, real-time, automated financial transactions between devices.

In this post we will talk about the software ecosystem that runs on Althea L1 and a little bit about the design of M2M applications themselves.

Billing vs Blockchain consensus

Over the last seven years spent developing and using the Althea routing and billing protocol, we’ve learned a lot about developing M2M applications. One of the biggest lessons is the tradeoff between on-chain and off-chain billing logic. 

Regardless of how payments are ultimately settled on Althea L1, development has focused on the balance of programmable blockchain logic that the M2M application uses and the way that it is embedded into the billing process. In general the more on-device logic is used, the more difficult application development will be. Blockchain consensus is extremely powerful, which is what makes consensus worth the tradeoffs around speed and cost of execution.The Althea protocol’s multi hop routing and billing system for internet payments is pretty far over to the left on this chart. It’s not until you climb up the stack into things like the exit layer or liquid infrastructure that the Althea protocol uses significant amounts of on-chain logic.

While this approach adds design complexity, it yields enormous scalability advantages. Althea protocol could scale to handle the traffic and payments of the entire global internet, something infeasible for an architecture relying solely on on-chain logic.

No M2M application on Althea L1 will be entirely on one side or the other of this spectrum, but it’s important to keep the spectrum in mind when working on M2M application design. This insight is what led to Althea L1’s hybrid design, where microtransactions for on-device logic are prioritized, with programmable EVM logic running at a slower pace. 

This tradeoff makes Althea L1 significantly more appropriate for applications generating revenue rather than applications focusing on blockchain incentives for real-world goods.

Incentive mechanisms are extremely chain-logic heavy by nature and inherently constrain the capacity of their host chain for M2M applications that focus on IRL revenue, which generally cannot be proven on chain. 

As an example, imagine a vending machine. On chain proof of sold candy bars is essentially impossible. But using on device logic the vending machine can determine it has been paid and release the item to the customer.

More powerful applications require better tools

Developing M2M applications that rely heavily on on-chain logic plays to the strengths of general-purpose Layer 1 blockchains—primarily because blockchain developer tooling is far more robust than embedded device tooling. However, this convenience comes at a cost as discussed in the previous section: scalability and efficiency.This challenge became especially clear during the Althea protocol’s development. Existing tooling simply did not provide the level of control needed to implement Althea’s device-centric design. Without off-the-shelf solutions to turn to, we had to build our own libraries for interacting with both EVM and CosmosSDK-based chains.

Clarity

Clarity is an ultra-lightweight, ultra-portable transaction generation library for the EVM that is fully compliant with the Ethereum consensus client test suite.

What makes Clarity unique is that it is fully cross-platform, meaning it is free of any CPU architecture-specific instructions across its entire implementation. We originally required this to support routers using MIPS CPUs, and while the rise of ARM powered hardware means this is no longer mandatory, It continues to be useful when porting to unique architectures and maintaining lightweight operation.Clarity is also extremely light weight, with only 36 dependencies it is ideal for embedded environments down to as little as a few hundred kilobytes of ram. 

Web30

Web30 is the request library companion for Clarity. Handling the network functions and jsonrpc interaction. The key design aspect of Web30 is a focus on robust response to a variety of network outages and conditions.Web30 exposes all network calls to the user in such a way that any failure can be handled gracefully with a complete understanding by the caller of how and when transactions are signed, submitted, and executed. This is a problem with other request libraries that include a very high level of abstraction—making it difficult, or even impossible, to handle a network failure at the wrong time, or an unexpected disconnection.

Deep Space

Deep Space was the first CosmosSDK-compatible transaction generation library to use Rust and also the first to make exclusive use of the GRPC interface for communicating with full nodes.

Unlike Clarity and Web30, Deep Space is a single library, because transaction encoding in CosmosSDK requires protobuf definitions that already pulled in network libraries there was no point in separating them.

Deep Space is the most performant library for interacting with CosmosSDK chains, capable of indexing 10 million blocks in roughly 100 minutes, utilizing even mediocre hardware.

Ecosystem infrastructure

In addition to the foundational libraries, Althea L1 includes several pieces of infrastructure designed for easy integration by M2M applications.

The iFi Dex

Every design choice for the iFi DEX was made in favor of optimization for M2M devices, payments and swaps. The topic of the high-speed backend is covered in detail in our introductory blog post.Higher speed and lower resource usage are nice to have for a DeFi platform, but they are essential for M2M applications that should successfully build swaps themselves rather than relying on less reliable centralized infrastructure.

For Althea L1 applications, the swap complexity is pushed to the DEX side. By taking advantage of the multiple liquidity types aggregated using Liquidity Fusion, devices can perform a single swap that is both routed across many different types of liquidity and potentially multiple pools without using a separate dex aggregator —thereby eliminating significant complexity from the device side of the equation.

Permit TX Aggregator

All DeFi infrastructure on Althea L1 supports Permit TX, which allows ALTHEA gas to be paid on your behalf by a relayer. This means that M2M application developers can spend less time writing gas handling code and more time working on their application.

Liquid Infrastructure

Liquid Infrastructure is the vanguard feature of Althea L1’s iFi DEX, enabling seamless integration between on-device revenue streams and on-chain DeFi applications. Even more importantly, it achieves this without hindering the overall performance of the chain.

Conclusion

Althea L1’s ecosystem is purpose-built, from top to bottom, to support M2M applications, with a unique focus on revenue-generating devices and bringing off-chain businesses on-chain. The enticement to Web3 in this case is not through incentives—but by delivering a superior customer experience, superior performance, lower cost of operation, and deep integrating with decentralized finance (DeFi)—powering a new era of iFi (infrastructure finance), enabling fully on-chain businesses to flourish.