The Rising Narrative: A Glimpse into the Present and Future of DePIN

Introduction

The internet, as a symbol of globalization, is actually a product of the peak period of the Cold War. In 1969, the U.S. military created the decentralized "ARPANET" to meet communication needs in the event of a nuclear strike. However, over the past 55 years, the internet has gradually deviated from its original purpose during its development from Web1 to Web2, forming a centralized platform system. In recent years, the rise of Web3 has attempted to reshape the underlying architecture of the internet through decentralization.

In this context, the DePIN( decentralized physical infrastructure network) provides a new solution: by leveraging the financial attributes and incentive mechanisms of Web3, it constructs an efficient P2P physical resource network, creates a decentralized physical network infrastructure, and endows the network with programmable capabilities, achieving an elevation of "DePIN+". At the same time, the explosion of AI in Web3 also witnesses the expansion of blockchain applications from on-chain to the real world.

Next, let's take a look at the present and future of DePIN.

Part.1 Overview of DePIN: What & Why

What is DePIN?

DePIN( Decentralized Physical Infrastructure Network) is a model that combines physical infrastructure resources with blockchain technology, coordinating global resource collaboration through distributed ledgers, token incentives, and smart contracts.

In short, DePIN creates a "resource sharing + economic incentive" bilateral market by linking hardware with blockchain. This community-driven model is more flexible than traditional single-point resource management and also has greater scalability and robustness.

A complete DePIN network consists of project parties, off-chain physical devices, suppliers, and demanders, with the basic operational model divided into five steps:

1. Off-chain hardware devices: Typically provided or required by the project party, mainly divided into customized dedicated hardware, professional-grade hardware, and smart mobile devices.

2. Proof: Data generated by physical devices needs to be uploaded to the blockchain through off-chain infrastructure and recorded on a tamper-proof blockchain ledger, referred to as Physical Work Proof ( PoPW ).

3. Identity verification: Verify the on-chain account address of the device owner, generally using public and private keys for identity verification.

4. Reward Distribution: After verifying the data, the token rewards obtained from off-chain physical devices will be sent to the on-chain address.

5. Demand Matching: In the DePIN market platform, both supply and demand sides complete the exchange and matching of resources.

Why is DePIN needed?

The core value of DePIN can be summarized in the following four points:

1. Resource Sharing and Digitalization: Transform idle physical resources into tradable digital assets in a decentralized manner.

2. Decentralized Governance: Based on open protocols and cryptoeconomic models, users contribute capital, assets, and labor towards a common goal, and are incentivized in a transparent and fair manner.

3. On-chain settlement: The blockchain becomes a single source of a shared ledger for all market participants, reducing costs.

4. Innovation: In an open, permissionless global system, the speed of experimentation is an order of magnitude higher than that of centralized infrastructure.

Current Status of DePIN Development

Track: The DePIN project mainly expands into the fields of computing power, data collection and sharing, wireless, sensors, energy, and more. AI is the keyword for DePIN in this cycle, with a batch of AI DePIN projects dedicated to integrating global resources such as computing, storage, networking, and energy, providing underlying infrastructure support for the training, inference, and deployment of AI models.

Market Size: The number of DePIN projects currently online has reached 1,561, with a total market capitalization of approximately $22 billion. Messari predicts that by 2028, the DePIN market size may exceed $35 trillion.

L1/L2: Currently, DePIN projects are mainly focused on deployment on the Solana public chain, as well as DePIN dedicated chains like IoTex and Peaq. Polygon and Arbitrum are gradually becoming rising stars.

The current DePIN projects are divided into two directions: one focuses on the middleware of DePIN; the other focuses on the expansion of the demand side of DePIN.

Part.2 DePIN Middleware

The DePIN middleware aims to help project parties quickly launch DePIN application projects by providing development frameworks, developer tools, overall solutions, etc. It mainly includes:

DePIN infra

• DePHY: Provides open-source hardware solutions, SDKs, and tools for DePIN projects.
• W3bStream: Off-chain computing protocol that allows IoTeX DePIN projects to easily generate logic based on smart device data.

Liquidity Scheme

• PINGPONG: DePIN liquidity and service aggregator, optimizing and maximizing mining yields across multiple networks through innovative tools and solutions.
• Parasail: A re-staking protocol specifically designed for DePIN services that activates idle assets in mature networks to provide economic guarantees for DePIN services.

Part.3 DePIN Application Layer

The DePIN application layer is mainly divided into four major sectors: cloud network storage, computing, wireless network 5G, WiFi, Bluetooth, LoRaWAN, sensor environments, geography, health, and energy.

( Cloud Network

)# Storage

• Filecoin: Based on IPFS technology, it uses a proof-of-storage mechanism to ensure data integrity and authenticity.
• Arweave: Provides a permanent storage solution where users only need to pay a one-time fee.

(# Hash Rate

• Render Network: Provides decentralized GPU rendering services.
• io.net: Not just a matching platform for computing power resources, but also achieves efficient collaboration of distributed GPUs through a complete product architecture.
• PinGo: An AI and DePIN project on the TON network that addresses the fragmentation and idleness of idle computing power resources.

) wireless network

• Hive 5G: Like Pollen Mobile, it utilizes decentralized base stations to build a distributed 5G network.
• WiFi: Wicrypt, Metablox ( is now renamed to Roam ), Wifi Dabba, etc.
• Low Power Wide Area Network ### LoRaWAN ###: Like Helium, it provides low-cost, high-coverage communication services for IoT devices through LoRaWAN routers.
• Bluetooth: Enables short-range data transmission.

sensor

• Environment: Like WiHi, we hope to become a unified platform that connects all entities, simplifies data sharing, improves prediction accuracy, and enhances climate monitoring.
• Geography: Like HiveMapper, collecting the latest high-resolution data for map imaging through onboard cameras.

Energy

• Starpower: By creating a decentralized virtual power plant (VPP), connect small power supply networks with the demand side.
• Powerpod: Changing the way electric vehicles are charged by creating a decentralized network of community charging stations.
• Arkreen: Build applications and services by incentivizing providers to offer capacity and other similar data for solar installations.

Part.4 How to view the future of DePIN?

DePIN trend

1. Integration with web2 application scenarios: The potential of DePIN lies not only in its underlying decentralized technological advantages but also in the extensive application scenarios within the web2 industry.

2. Lower hardware threshold: DePIN presents a transition from professional-grade equipment to consumer-grade products in the hardware domain, such as smartphones, watches, AI smart rings, electronic cigarettes, etc.

3. Financialization: The tokenization of physical hardware has opened up the imaginative space for on-chain finance in DePIN, such as staking liquidity pools and on-chain asset securitization of DePIN hardware.

4. DePIN and AI Mutual Support: DePIN can serve AI on multiple levels such as computing power, models, and data, and AI also makes DePIN smarter and more sustainable.

The bottlenecks of DePIN towards scaling

1. The complexity of technical implementation poses high demands on hardware manufacturers, network developers, and participating nodes.
2. The market's acceptance of the DePIN model is still unclear.
3. The uncertainty of the profit model limits the attractiveness of DePIN.
4. Potential legal and policy interventions may affect the development of DePIN.

Part.5 Factors to Consider for a DePIN Potential Project

( hardware

• Self-made VS Third-party
• One-time vs Ongoing Costs
• High Density VS Low Density
• Scarcity VS Commonness

) Tokenomics design

Token economics is the key to whether DePIN projects can operate well. The two mainstream methods are BME### burn and mint equilibrium### and SFA( stake for access). The ways to empower tokens include:

• Use points as a pre-mining commitment to miners.
• Grant governance functionality to tokens
• The staking mechanism incentivizes users to lock up tokens.
• The project party uses a portion of the revenue to purchase tokens and add them to the liquidity pool.

![The Emerging Narrative: A Glimpse into the Present and Future of DePIN]###https://img-cdn.gateio.im/webp-social/moments-90c85be1a09c80b5cf7bf17c47f23a66.webp###

Summary

DePIN, as an important component of Web3, builds a distributed bilateral market by adopting the "Web3 + token economy" infrastructure, integrating idle resources globally, and addressing the issues of resource monopoly and low distribution efficiency in traditional centralized models. Although DePIN shows great development potential, it still faces challenges in terms of technological maturity, service stability, market acceptance, and regulatory environment. DePIN relies on the flywheel effect, requiring a broad perspective and careful selection, accumulating strength to make a significant impact, and it is believed that it will undoubtedly become an important part of the blockchain world in the future.