DePIN: The Integration of Decentralized Hardware and the New Data Economy

Decentralized Physical Infrastructure Network (DePIN) has become a hot topic in the blockchain field in recent years. DePIN introduces the core concept of blockchain into physical devices and infrastructure, including WiFi stations, surveillance cameras, and servers. This article will delve into the core principles of DePIN, analyze typical projects, and explore its impact on the blockchain industry.

DePIN Overview

DePIN covers multiple areas, from decentralized storage networks like Arweave and Filecoin, to decentralized WiFi connection devices like Helium, and community software applications like Hivemapper. Messari's report in January 2023 categorized DePIN into four major areas: decentralized servers, wireless communication, sensor technology, and energy networks.

The definition of DePIN has expanded from initially focusing on the hardware level to more consumer-oriented applications, such as projects aimed at creating a "Decentralized Uber." Common features of these projects include collective ownership, distributed infrastructure costs, and economies of scale that grow with the increase in users.

The DePIN flywheel theory proposed by Messari explains how to leverage token incentives to drive this process. This concept is applicable not only to hardware infrastructure but also to data infrastructure projects, including those that collect and coordinate consumer data.

Therefore, DePIN can be seen as the integration of a decentralized hardware layer and a new data economy owned by the community.

Typical Case Analysis

Helium

Helium is one of the most well-known DePIN projects, aimed at expanding broadband infrastructure by deploying LoRa gateways in a decentralized manner. In 2017, Helium began offering cryptocurrency payments through its own L1 blockchain network.

Helium is regarded as the "People's Network", demonstrating how to use token incentives to promote beneficial social behaviors. However, the project also faces liquidity and adoption issues, with network revenue continuing to decline. In April 2023, Helium migrated its blockchain to the Solana network to expand user coverage and liquidity.

The case of Helium reveals the opportunities and risks in the DePIN field. The token has shown significant effectiveness in enabling real-world scenarios, but maintaining long-term value and appeal is challenging.

Hivemapper

Hivemapper is a DePIN project on the Solana network, aiming to create a decentralized "Google Maps". Users earn HONEY token rewards by installing dash cams in their vehicles and sharing real-time video footage. The company uses this distributed data to build a decentralized map with an API interface.

The advantage of Hivemapper lies in its token incentive mechanism, which allows for faster map creation in a more cost-effective manner. This enables Hivemapper to offer more affordable API services, with the potential to break Google's market monopoly.

Hivemapper emphasizes the core "flywheel" concept of the DePIN system, which is to efficiently execute distributed, decentralized tasks using tokens. Its core competitiveness stems from the accumulated data infrastructure and the ability to convert data into currency.

Teleport

Teleport is a decentralized ride-hailing application on the Solana network, a key component of the "Shared Mobility Protocol" (TRIP). The project is committed to establishing a fair and autonomous market environment, eliminating the phenomenon of excessive commissions taken by intermediaries.

The case of Teleport highlights the importance of an open and decentralized "data market" in DePIN projects.

IoTeX

IoTeX emphasizes the security and privacy dimensions of the combination of blockchain technology and decentralized hardware devices. Its flagship product Ucam is a home security camera that protects data through blockchain.

IoTeX aims to build an "open network" for IoT devices and promote the concept of "MachineFi". However, in the context of L1 scenario integration, establishing independent professional networks and guiding liquidity faces challenges.

Impact on the Blockchain Ecosystem

DePIN, as a consumer-facing application layer, has the potential to drive demand for underlying chains or ecosystems. Solana is active in the DePIN space, while other participants like IoTeX are also building new solutions for DePIN.

The growth of the DePIN trend has impacted decentralization governance. As DePIN projects mature and governance is handed over to DAOs, the demand for DAOs to coordinate physical devices will increase. This may drive the governance tasks of DAOs to expand from digital assets to physical assets, bringing the operations of DAOs closer to traditional companies.

In the long run, DePIN may become an important turning point for the adoption of "web3" in the real world.