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

Introduction

The internet, as a symbol of globalization, actually originated during the Cold War. In 1969, the U.S. military developed the decentralized ARPANET in response to potential nuclear strikes, which became the prototype of the internet. However, over the past 55 years, from Web1 to Web2, the architecture of the internet has gradually shifted towards centralization, contrary to its original intention. In the Web2 era, large platforms dominate the online world.

In recent years, the wave of Web3 has emerged, emphasizing decentralization and de-platforming. However, mere decentralization at the application layer is difficult to solve fundamental issues. Against this backdrop, DePIN offers a new idea: by combining the financial attributes and incentive mechanisms of Web3, it constructs an efficient P2P physical resource network, creates decentralized physical network infrastructure, and endows the network with programmable capabilities, achieving the upgrade of "DePIN+" and building a new Internet architecture.

At the same time, the explosion of AI in the Web3 field not only injects new vitality into it but also shows that blockchain applications are expanding from on-chain to the real world, such as RWA, AI, DePIN, etc. The rise of DePIN means that the boundaries between physical reality and the blockchain world are becoming blurred. Next, let's delve into the current status and future development of DePIN.

DePIN Overview: What & Why

What is DePIN?

DePIN( Decentralized Physical Infrastructure Network) combines physical infrastructure resources with blockchain technology to coordinate global resource collaboration through distributed ledgers, token incentives, and smart contracts. In short, DePIN creates a "resource sharing + economic incentive" bilateral market by integrating hardware with blockchain, and this community-driven model is more flexible than traditional single-point resource management, with stronger scalability and robustness.

A complete DePIN network consists of project parties, off-chain physical devices, suppliers, and demanders, with basic operating models including:

1. Off-chain hardware devices: can be divided into customized dedicated hardware, professional-grade hardware, and smart mobile devices.

2. Proof: Data generated by physical devices must be uploaded to the blockchain through off-chain infrastructure, providing transparent and auditable records.

3. Identity Verification: Verify the on-chain account address of the device owner.

4. Reward Distribution: Distribute the token rewards obtained from off-chain physical devices to the corresponding on-chain addresses.

5. Demand Matching: The DePIN market platform facilitates resource exchange and matching between supply and demand parties.

Why is DePIN necessary?

Traditional physical infrastructure networks face issues such as centralized control, high entry barriers, resource waste, and insufficient incentive mechanisms. The core value of DePIN lies in:

• Resource Sharing and Digitalization: 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 facilitate rapid experimentation

DePIN development status

The DePIN field has multiple tracks, including storage, computing power, wireless networks, sensors, energy, etc. AI has become a key term in DePIN recently, leading to the emergence of a number of AI DePIN projects. Currently, there are over 1500 DePIN projects that have gone live, with a total market value of approximately $22 billion. DePIN projects are mainly deployed on public chains such as Solana and IoTex, while Polygon and Arbitrum are gradually becoming rising stars.

DePIN Middleware

To address the technical challenges of large-scale access to blockchain in DePIN, the DePIN track has derived middleware that connects devices and networks, including:

• DePIN infrastructure: such as DePHY, W3bStream, etc., providing development frameworks and tools for DePIN projects.
• Liquidity schemes: such as PINGPONG, Parasail, etc., optimize the token liquidity of the DePIN network.

DePIN Application Layer

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

Cloud Network

Including decentralized storage and computing:

• Storage: such as Filecoin, Arweave, etc.
• Computing power: such as Render Network, io.net, PinGo, etc.

Wireless Network

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

• 5G: such as Pollen Mobile
• WiFi: such as Wicrypt, Roam, Wifi Dabba
• LoRaWAN: like Helium

sensor

Mainly used for monitoring data related to environment, geography, health, etc.

• Environment: like WiHi
• Geography: like HiveMapper

Energy

such as Starpower, Powerpod, Arkreen, etc.

The Future Trends of DePIN

1. Integration with Web2 application scenarios: DePIN is expected to play a role in various fields such as the Internet of Things, smart cities, and energy sharing.

2. Lower hardware barriers: Transition from professional-grade equipment to consumer-grade products, such as encrypted phones.

3. Financialization: Physical hardware tokenization creates an imaginative space for on-chain finance in DePIN.

4. DePIN and AI mutual nourishment: DePIN provides resources such as computing power, models, and data for AI, while AI makes DePIN smarter and more sustainable.

The Challenges of Scaling DePIN

• High difficulty in technology integration
• The market acceptance is still unclear.
• Uncertainty of profit model
• Potential regulatory risks

Evaluation Factors for DePIN Projects

1. Hardware:

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

2. Token Economics Design:

• BME vs SFA
• Token Empowerment Methods

Summary

DePIN builds a distributed bilateral market through Web3 and token economics, integrating global idle resources, and is expected to solve the problems of resource monopoly and inefficiency in traditional centralized models. Despite facing challenges such as technology, market, and regulation, DePIN still has significant growth potential as blockchain performance improves and token economic models mature. DePIN relies on the flywheel effect and requires long-term accumulation to achieve scalable application.