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

Introduction

The internet was originally born during the Cold War, with the purpose of establishing a decentralized and self-recovering network system. However, over the past 55 years, the development of the internet has gradually deviated from this original intention, forming a centralized architecture dominated by large tech companies. In recent years, the wave of Web3 has emerged, attempting to achieve decentralization once again, but still faces many challenges.

In this context, DePIN( decentralized physical infrastructure network) provides a new solution: by combining the financial properties and incentive mechanisms of Web3, an efficient P2P physical resource network is built, creating a decentralized physical network infrastructure. At the same time, the popularity of AI in the Web3 field also witnesses the trend of blockchain applications expanding from on-chain to the real world.

The rise of DePIN signifies that the boundaries between the physical reality and the blockchain world are gradually becoming blurred. This article will discuss the current status 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 combining hardware with blockchain. This community-driven model is more flexible than traditional resource management and also exhibits greater scalability and robustness.

A complete DePIN network typically consists of project parties, off-chain physical devices, suppliers, and demanders. The basic operating model includes the following steps:

1. Off-chain hardware devices: can be 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 chain through off-chain infrastructure and recorded on the blockchain ledger.

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

4. Reward Distribution: The token rewards obtained from off-chain physical devices will be distributed to the corresponding on-chain address.

5. Demand Matching: Complete the exchange and matching of resources on the DePIN market platform.

Why do we need DePIN?

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
• Decentralized Governance
• On-chain settlement
• Innovation

Current Status of DePIN Development

Currently, DePIN projects are mainly focused on storage, computing power, data collection and sharing, wireless, sensors, energy, and other fields. AI is the keyword for DePIN in this cycle, and a number of AI DePIN projects have emerged.

According to the data, the number of launched DePIN projects has reached 1561, with a total market value of approximately 22 billion USD. It is expected that by 2028, the DePIN market size may exceed 3.5 trillion USD.

The DePIN project mainly focuses on deployment on the Solana public chain, as well as some DePIN dedicated chains. Polygon and Arbitrum are also gradually becoming rising stars.

The current DePIN projects are mainly divided into two directions: one focuses on the intermediate layer of DePIN, and the other focuses on the expansion of the demand side of DePIN.

Part.2 DePIN Middleware

The large-scale integration of DePIN-related devices into the blockchain presents technical challenges and liquidity pressures. As a result, middleware has emerged to connect devices with the DePIN network, aiming to assist project parties in quickly launching DePIN applications.

DePIN Infrastructure

• 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, triggering blockchain operations.

Liquidity Program

• PINGPONG: DePIN liquidity and service aggregator, optimizing and maximizing mining profits across multiple networks.
• Parasail: A re-staking protocol specifically designed for DePIN services, providing economic guarantees for DePIN services by activating idle assets.

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.

Representative projects in storage include Filecoin and Arweave.

Representative projects in the field of computing power include Render Network, io.net, and PinGo.

Wireless Network

Including 5G, WiFi, Bluetooth, LoRaWAN, etc. Representative projects include Helium, Wicrypt, Metablox, etc.

sensor

Mainly through the monitoring and capture of data such as environment, geographical location, and health. Representative projects include WiHi, HiveMapper, etc.

energy

Representative projects include Starpower, Powerpod, Arkreen, etc.

Part.4 How to view the future of DePIN?

DePIN trend

1. Combine with Web2 application scenarios
2. Lowering Hardware Barriers
3. Financialization
4. DePIN and AI mutual nourishment

The constraints of DePIN towards scaling

1. The technical implementation difficulty is high.
2. Market acceptance is unclear.
3. Uncertainty of Profit Model
4. Potential regulatory pressure

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
• Scarce vs Common

Tokenomics design

Tokenomics is the key to whether DePIN projects can operate well. The mainstream models include BME( burn and mint equilibrium) and SFA( stake for access).

You may also consider:

• Use points as a pre-mining commitment
• Empower tokens with governance features
• Staking Mechanism
• Project party repurchase, etc.

Summary

DePIN builds a distributed bilateral market through the infrastructure of "Web3 + token economy", integrating global idle resources and solving the issues of resource monopoly and low distribution efficiency in traditional centralized models.

Although DePIN shows great potential, it still faces challenges such as technological maturity, service stability, market acceptance, and regulatory environment. DePIN relies on the flywheel effect, which requires long-term accumulation, and I believe that the future will usher in opportunities for large-scale application.