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 of the Cold War. In 1969, the U.S. military created the prototype of the Internet, "ARPAnet"(, in order to have a network that could avoid centralized single points of failure and autonomously recover in the event of a nuclear strike. It adopted a fully distributed architecture of "terminal-to-terminal direct linking," reflecting the original intention of "decentralization."

However, over the past 55 years, from Web1 to Web2, while the internet has rapidly developed, it has formed a "terminal-linked server" centralized architecture of many-to-one in the tide of commercialization and globalization, which is contrary to its original intention. In the fragmented platform system, Web2 giants dominate the territory, wielding absolute discretion and influence over the online world.

In recent years, the wave of decentralized and de-platformed Web3 has been on the rise. However, simply applying decentralization is difficult to solve fundamental contradictions; issues such as efficiency bottlenecks and security risks still exist. The fundamental solution lies in how to thoroughly reform the underlying technology stack of the Internet to overturn the efficiency and security problems caused by the overly centralized Web2.

In this context, DePIN offers a new solution worth noting: by combining the financial attributes and incentive mechanisms of Web3, DePIN can build an efficient P2P physical resource network, create a "decentralized physical network infrastructure", and grant the network programmable capabilities, achieving the dimensional elevation of "DePIN+" and constructing a new internet architecture.

At the same time, the explosion of AI in Web3 not only injects new vitality into it but also witnesses the trend of blockchain applications expanding from on-chain activities to the real world, such as RWA, AI, and DePIN. The narrative of DePIN signifies that the boundaries between physical reality and the blockchain world are gradually blurring. Next, let's take a look at the present and future of DePIN.

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DePIN Overview

) What is DePIN?

DePIN### Decentralized Physical Infrastructure Network( is a model that combines physical infrastructure resources with blockchain technology, coordinating resource collaboration globally 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.

Typically, 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: Usually provided or requested by the project party, mainly divided into:

• Customized dedicated hardware: such as Helium's hotspot hardware, Hivemapper's dedicated dashcam, etc.
• Professional-grade hardware: such as idle GPU and CPU devices, participating in computing power supply by downloading software.
• Smart mobile devices: such as smartphones, smartwatches, etc., participate by running node programs or directly providing data.

2. Proof: The data generated by physical devices needs to be uploaded to the blockchain through off-chain infrastructure to provide stakeholders with transparent and auditable records, proving that the work has been completed to obtain incentives, referred to as Physical Work Proof ) PoPW (.

3. Identity Verification: After verifying the data, it is necessary to check 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 corresponding on-chain addresses.

5. Demand Matching: On the DePIN marketplace platform, the supply and demand sides engage in the exchange and matching of resources. The platform provides real-time market data to ensure fair pricing, typically managed by a DAO.

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) Why is DePIN needed?

The significance of DePIN lies in addressing the following issues of traditional physical infrastructure networks:

• Centralized control: vulnerable to attacks, low transparency, users have no control over data.
• High entry barriers: High capital investment and regulatory hurdles need to be overcome, limiting market competition and innovation.
• Resource waste: Centralized management leads to low resource utilization rate
• Insufficient incentive mechanisms: Users' participation enthusiasm is low.

The core values of DePIN include:

• Resource sharing and digitization: transforming idle physical resources into tradable digital assets
• Decentralized Governance: Achieving transparent and fair incentives based on open protocols and cryptoeconomic models.
• On-chain settlement: Reducing costs through blockchain
• Innovation: Open permissionless systems foster experimentation and innovation

Current Status of DePIN Development

DePIN has developed relatively early, initially focusing on storage and communication technologies. With the increase in demand, projects have expanded into areas such as computing power, data collection, wireless, sensors, and energy. Currently, the top 10 projects by market capitalization are mainly concentrated in the storage and computing power sectors.

AI is the keyword of DePIN in this cycle, with a batch of projects dedicated to providing underlying infrastructure support for AI.

According to data, there are currently 1,561 DePIN projects launched, with a total market capitalization of approximately $22 billion. Messari predicts that by 2028, the DePIN market size could exceed $3.5 trillion.

Current DePIN projects are mainly deployed on public chains such as Solana, IoTex, and Peaq, while Polygon and Arbitrum are gradually emerging as new contenders.

The DePIN project mainly focuses on two directions: one is to concentrate on the intermediate layer of DePIN, and the other is to focus on the expansion of the demand side of DePIN.

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DePIN Middleware

The large-scale access of DePIN-related IoT devices to the blockchain faces technical challenges and liquidity pressures. Therefore, the DePIN track has given rise to middleware that connects devices to the DePIN network, helping project parties quickly launch DePIN applications.

) DePIN infrastructure

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

liquidity plan

• PINGPONG: DePIN liquidity and service aggregator, optimizing mining yields across multiple networks
• Parasail: A re-staking protocol specifically designed for DePIN, activating idle assets to provide economic guarantees for DePIN.

DePIN Application Layer

The DePIN application layer occupies the majority of the tracks, mainly divided into four major sectors: cloud networks, wireless networks, sensors, and energy.

Cloud Network

including decentralized storage and computing.

Storage:

• Filecoin: Based on IPFS technology, using a proof-of-storage mechanism to ensure data integrity.
• Arweave: provides permanent storage solutions

Hashrate:

• Render Network: provides decentralized GPU rendering services
• io.net: not only provides computing power matching but also achieves efficient collaboration of distributed GPUs.
• PinGo: Solving the fragmentation problem of idle computing power resources

Wireless Network

Dewi### decentralized wireless ( establishes token incentive-based wireless infrastructure through collaboration of independent entities, including:

• 5G: For example, Pollen Mobile, builds a distributed 5G network using decentralized base stations.
• WiFi: such as Wicrypt, Roam, etc.
• LoRaWAN: Like Helium, provides low-cost, high-coverage communication services for IoT devices.
• Bluetooth: Enables short-range data transmission

) sensor

Composed of interconnected devices, monitoring and collecting data on the environment, geographical location, health, etc.

• Environment: Such as WiHi, connecting entities to simplify weather data sharing.
• Geography: Like HiveMapper, collects map data through in-vehicle cameras.

Energy

Decentralized through the energy network, allowing users to directly utilize surplus energy for production:

• Starpower: Create decentralized virtual power plants, connecting small power supply networks with demand side.
• Powerpod: Create a decentralized community charging station network
• Arkreen: Incentivizing the provision of renewable energy data

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The Future Trends of DePIN

1. Integration with Web2 application scenarios: DePIN will play an important role in areas such as the Internet of Things, smart cities, and energy sharing.

2. Lower hardware barriers: Transitioning from professional-grade equipment to consumer-grade products, such as encrypted phones, is expected to promote the expansion of the user base.

3. Financialization: The tokenization of physical hardware creates an imaginative space for on-chain finance, such as staking pools, asset securitization, etc.

4. Mutual Feeding with AI: DePIN provides computing power, data, and other resources for AI, while AI makes DePIN smarter and more sustainable.

Challenges Facing the Scaling of DePIN

• The technical implementation is complex, with high requirements for hardware manufacturers, developers, and nodes.
• The market acceptance is unclear, and the initial costs are high.
• The profitability model is uncertain, and the sustainability of the token economy is in doubt.
• May trigger regulatory intervention, such as content review and other issues.

Factors for Evaluating DePIN Projects

) hardware

• Self-made vs Third-party: Self-made hardware can expand quickly, but the professionalism may not match that of third-party.
• One-time vs ongoing costs: One-time costs are easier for network expansion.
• High density vs low density: It needs to be weighed based on network characteristics.
• Scarce vs Common: Scarce resources may have expansion potential.

Token Economics Design

The token economy is key to the smooth operation of a project, with the main models being BME and SFA. It can be improved in the following ways:

• Use points as a form of pre-mining commitment
• Empower token governance functionality
• Adopt a staking mechanism
• The project party repurchases tokens and provides liquidity.

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Summary

DePIN builds a distributed bilateral market through Web3+ token economics, integrating global idle resources to solve the problem of inefficient resource allocation. It demonstrates great potential but still faces challenges in technology, market, and regulation. DePIN relies on the flywheel effect, requiring long-term accumulation, and will not become a silent narrative.

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