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

Introduction

The development of the Internet has gradually evolved from an initial decentralized design to a centralized platform system. In recent years, the rise of Web3 aims to re-implement decentralization. In this context, DePIN( decentralized physical infrastructure network) provides a new solution: by combining the financial attributes and incentive mechanisms of Web3, it constructs an efficient P2P physical resource network, creating a decentralized physical network infrastructure.

The rise of DePIN signifies that the boundaries between the physical reality and the blockchain world are becoming blurred. This article will explore the current state 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 it also has greater scalability and robustness.

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

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

2. Proof: The data generated by physical devices needs to be uploaded to the blockchain through off-chain infrastructure to demonstrate that it has performed work as required to obtain incentives. This verification method is called Physical Work Proof ( PoPW ).

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

4. Reward Distribution: After verifying the data, the token rewards obtained from the 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 do we need DePIN?

Traditional physical infrastructure networks have some issues:

• Centralized control: Vulnerable to attacks, low transparency, users have no control over data and operations.
• High entry barriers: restricts market competition and innovation.
• Resource Waste: Low resource utilization rate.
• Insufficient incentive mechanism: User participation enthusiasm is not high.

The core value of DePIN includes:

• Resource sharing and digitization: Transforming idle physical resources into tradable digital assets.
• Decentralized governance: based on open protocols and cryptoeconomic models.
• On-chain settlement: reduce costs.
• Innovation: High experimental speed.

Current Status of DePIN Development

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

The current DePIN projects are mainly focused on deployment on the Solana public chain, as well as on DePIN-specific chains like IoTex and Peaq. Polygon and Arbitrum are gradually emerging as rising stars.

The DePIN project is mainly divided into two directions: one focuses on the intermediate layer of DePIN, and the other focuses on expanding the demand side of DePIN.

Part.2 DePIN Middleware

The DePIN middleware aims to help project parties quickly launch DePIN application projects by providing them with development frameworks, developer tools, and overall solutions.

DePIN infra

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

Liquidity Plan

• PINGPONG: DePIN liquidity and service aggregator.
• Parasail: A re-staking protocol specifically designed for DePIN.

Part.3 DePIN Application Layer

The DePIN application layer is mainly divided into four sectors: cloud network, wireless network, sensors, and energy.

Cloud Network

including decentralized storage and computing.

In terms of storage, Filecoin and Arweave are representative projects.

In terms of computing power, projects like Render Network, Akash Network, and io.net provide decentralized GPU computing services.

Wireless Network

including 5G, WiFi, Bluetooth, LoRaWAN, etc.

• Helium: Provides communication services for IoT devices through LoRaWAN routers.
• Pollen Mobile: Building a distributed 5G network using decentralized base stations.
• Wicrypt: Users can purchase dedicated devices to contribute WiFi and earn tokens.

sensor

Mainly through the monitoring and capturing of data related to the environment, geographical location, health, and so on.

• WiHi: Aiming to become a unified platform connecting all entities related to weather forecasting.
• HiveMapper: Collects map imagery data through in-vehicle cameras.

Energy

• Starpower: Create a decentralized virtual power plant.
• Powerpod: Create a decentralized community charging station network.
• Arkreen: Building renewable energy data applications.

Part.4 How to view the future of DePIN?

DePIN trend

1. Integration with web2 application scenarios: DePIN has broad application prospects in multiple fields such as the Internet of Things, smart cities, energy sharing, and edge computing.

2. Lowering hardware barriers: transitioning from professional-grade equipment to consumer-level products, such as encrypted phones.

3. Financialization: The tokenization of physical hardware has opened up the imaginative space for on-chain finance in DePIN.

4. DePIN and AI feed each other: DePIN provides computing power, models, data, and other resources for AI, while AI makes DePIN smarter and more sustainable.

The bottlenecks to the scaling of DePIN

• Technical implementation is complex
• Market acceptance is unclear
• Uncertainty of the profit model
• Potential regulatory risks

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 key to whether the DePIN project can run well. Mainstream models include BME( burn and mint equilibrium) and SFA( stake for access).

Summary

DePIN builds a distributed bilateral market by adopting the infrastructure of "Web3 + token economy", integrating global idle resources, and addressing the issues of resource monopoly and low distribution efficiency in traditional centralized models. Although it faces challenges such as technology, market, and regulation, DePIN still demonstrates significant growth potential.

DePIN relies on the flywheel effect, requiring broad observation and selective extraction, accumulating thickly and releasing thinly, and it is believed that it will eventually become an important force in the blockchain field that cannot be ignored.