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, during the "nuclear deterrence" era, sought to create a network that could avoid single points of failure and autonomously recover in the event of a nuclear strike. Thus, the early form of the internet, "ARPAnet" (, was born with the intention of "decentralization" and adopted a fully distributed architecture of "end-to-end connection."

However, over the past 55 years, from Web1 to Web2, the rapid development of the internet's golden age, along with the waves of commercialization and globalization, has instead given rise to a "terminal connecting to server" centralized architecture with many-to-one relationships, which is contrary to its original intention. In the fragmented platform system, Web2 giants monopolize the territory, wielding absolute discretionary power over the network world, possessing significant influence and power over value distribution.

In recent years, the wave of Web3 advocating decentralization and de-platforming has been rising. Simply decentralizing applications fails to address fundamental contradictions, and problems such as efficiency bottlenecks and security risks still exist. The fundamental solution lies in how to thoroughly transform the underlying technology stack of the Internet to disrupt the efficiency and security issues caused by the overly centralized Web2.

In this context, DePIN may offer 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 enable the network to have programmable capabilities, helping to achieve the dimensional elevation of "DePIN+" and construct a new entity completely different from traditional Internet architecture.

At the same time, the explosion of AI in Web3, in addition to injecting new vitality, has also witnessed the fact that blockchain applications have expanded from on-chain activities to the real world, such as RWA, AI, and DePIN.

The narrative of DePIN also implies that the boundaries between the physical reality and the ever-expanding blockchain world are gradually becoming blurred. Next, let's take a glimpse into the present and future of DePIN.

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) Part.1 DePIN Overview: What & Why

What is DePIN?

The concept of DePIN has been a common topic, but from the perspective of organization, it is still necessary to restate it. Here we will focus on the basic operating model of DePIN. By definition, DePIN###Decentralized Physical Infrastructure Network, a 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 point-based resource management and also has greater scalability and robustness.

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

1. Off-chain hardware devices: Usually provided or required by the project party, mainly divided into:

• Customized dedicated hardware: For example, Helium requires users to purchase Helium hardware hotspots manufactured by third-party manufacturers )Hotspot( to provide hotspot signals for nearby IoT devices to earn mining rewards; Hivemapper encourages users to contribute to the mapping network through its dedicated dashcam )HiveMapper Dashcam(.

• Professional-grade hardware: Idle computers equipped with GPU and CPU chips can start participating in computing power/data supply by simply downloading a browser plugin. For example, Heurist allows all owners of idle GPU devices to download its miner program and set up a miner node to start earning mining rewards by sharing their computing power. The participation method in io.net clearly states that the starting threshold for device networking is the NVIDIA GeForce RTX 3050.

• Smart Mobile Devices: Represented by lightweight mobile devices such as smartphones, smartwatches, wristbands, and even rings, they join the DePIN network in two ways: running node programs to become the control end of DePIN hardware; or directly providing sensor data or computing resources. For example, Silencio uses the built-in microphones of people's smartphones to map dynamic noise pollution around the world; Acurast leverages the storage space of old phones to build a decentralized cloud that anyone can contribute to.

2. Proof: Data generated by physical devices needs to be uploaded to the blockchain ledger through off-chain infrastructure, providing stakeholders with transparent and auditable records of infrastructure operations to prove that they have made a certain effort to obtain incentives as required. This verification method is called Physical Work Proof ) PoPW (.

3. Identity Verification: After the data has been validated, it is necessary to verify the on-chain account address of the device owner, typically using public and private keys for identity verification. The private key is used to generate and sign physical work certificates, while the public key is used by external parties to verify the certificate or as an identity tag for the hardware device )Device ID(.

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, which involves the token economics of DePIN. Token economics, as the economic foundation of the data value network, is key to the successful operation of the DePIN project.

• BME: Token burn mechanism, where users on the demand side will destroy tokens after purchasing services, thus the degree of deflation is determined by demand; in other words, the stronger the demand, the higher the value of the tokens.

• SFA: Requires supply-side users to stake tokens to become qualified miners. The supply determines the degree of deflation, meaning the more miners providing services, the higher the token value.

5. Demand Matching: A DePIN market platform where both supply and demand sides can buy, sell, and lease to complete the exchange and matching of resources; at the same time, the DePIN market provides real-time market data, including asset prices, historical performance, and energy production data, which helps ensure fair pricing and is typically managed by a decentralized autonomous organization )DAO(, allowing stakeholders to participate in the decision-making process.

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)# Why do we need DePIN?

Take a simple example. Noise pollution is a particularly common phenomenon in urban life. The quantification of noise pollution data is not only commercially valuable for real estate developers, hotels, restaurants, and other businesses, but also has reference significance for urban planning and academic research. However, would you be willing to let a private company install microphones all over your city? Or imagine the upfront costs of doing so, how far its coverage could expand, and how quickly it could grow?

If this is a noise detection network spontaneously formed by users, it becomes much simpler. For example, Silencio deploys noise pollution sensors through its application downloaded on users' phones. Mobile users establish a global measurement network by providing accurate, hyper-local noise pollution data and receive token rewards for it. Meanwhile, the platform profits by selling noise pollution data.

This is one of the meanings of DePIN. In traditional physical infrastructure networks such as communication networks, cloud services, energy networks, etc., due to the enormous capital investment and operational maintenance costs, the market is often dominated by large companies or giants, and this centralized industrial characteristic brings several major dilemmas and challenges:

• Centralized Control: Controlled by centralized organizations, there is a risk of single point of failure, vulnerability to attacks, and low transparency, with users having no control over data and operations.

• High Entry Barriers: New entrants need to overcome significant capital investments and complex regulatory hurdles, which limit market competition and innovation.

• Resource Waste: Due to centralized management, there is a phenomenon of resource idleness or waste, resulting in low resource utilization.

• Insufficient Incentive Mechanism: There is a lack of effective incentive mechanisms, resulting in low enthusiasm among users to participate and contribute network resources.

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

• Resource Sharing and Digitalization: Transform idle physical resources ### such as storage, communication, and computing power ( into tradable digital assets in a decentralized manner;

• Decentralized Governance: Based on open protocols and cryptoeconomic models, users contribute capital, assets, and labor for a common goal and are incentivized transparently and fairly.

• On-chain Settlement: The blockchain reduces costs by becoming a single source of a shared ledger for all market participants.

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

)# Current Status of DePIN Development

Track: As an early field in blockchain development, DePIN has been around for a long time. The first batch of projects that were established, such as the decentralized network Helium and decentralized storage providers Storj and Sia, have primarily focused on storage and communication technologies.

However, with the continuous development of the Internet and the Internet of Things, the demand for infrastructure and innovation is increasing. DePIN projects mainly expand into computing power, data collection and sharing, wireless, sensors, energy, etc. However, looking at the current top 10 market-cap projects in the DePIN field, most belong to the storage and computing power sectors.

AI is the key term for DePIN in this cycle. Due to the decentralized sharing needs of AI data and computing power, a number of AI DePIN projects have emerged, dedicated to integrating resources such as computing, storage, networking, and energy on a global scale, providing underlying infrastructure support for the training, inference, and deployment of AI models.

Market Size: According to data from DePIN Ninja, the number of DePIN projects that are currently online has reached 1561, with a total market capitalization of approximately $22 billion; regarding the total potential market size of the DePIN sector, Messari made a prediction: by 2028, the DePIN market size could exceed $3.5 trillion, and it may add $10 trillion to the global GDP over the next decade, reaching $100 trillion 10 years later.

L1/L2: Due to high throughput and low gas fees, current DePIN projects are mainly focused on deployment on the Solana public chain, as well as on DePIN-specific chains like IoTex and Peaq. Meanwhile, Polygon and Arbitrum are gradually emerging as rising stars.

As the hardware supply chain has become very mature, project parties do not need to invest a lot of research and development effort. Therefore, according to the focus direction, the current DePIN projects are divided into two directions: one focuses on the intermediate layer of DePIN; the other focuses on the expansion of the demand side of DePIN.

Part.2 DePIN Intermediate Layer

The integration of DePIN-related IoT devices into the blockchain on a large scale faces technical challenges and liquidity pressures, such as hardware design and production, how to achieve trustworthy transmission and data processing of off-chain data on-chain, and token economic design. As a result, the DePIN track has given rise to middleware that connects devices and the DePIN network, involving aspects of connection and bidirectional services, aimed at helping project parties quickly launch DePIN application projects, providing them with development frameworks, developer tools, overall solutions, and more.

It includes not only developer-friendly tools and one-stop services like DePHY and Swan; it also has the re-staking protocol Parasail specifically serving DePIN, aimed at enhancing the liquidity and value utilization of the DePIN network's native tokens.

(# DePIN infra

• DePHY: Aims to provide open-source hardware solutions, SDKs, and tools for DePIN projects, and reduce the manufacturing and network messaging costs of bridging hardware products to the blockchain through off-chain network nodes operating at 500ms latency synchronized with the blockchain.

• W3bStream: The off-chain computing protocol W3bstream allows IoTeX DePIN projects to easily generate logic based on smart device data, triggering blockchain operations. Some well-known IoTeX-based DePIN projects include Envirobloq, Drop Wireless, and HealthBlocks.

Currently, with the increase of DePIN projects that provide frameworks and solutions, DePIN application layer projects built on its infrastructure have also started to gradually emerge.