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, during the "nuclear deterrence" era, the U.S. military hoped to have a network that could avoid centralized single points of failure and autonomously recover in the event of a nuclear strike. Thus, the prototype of the Internet, "ARPAnet" (, was born, adhering to the principle of "decentralization" and adopting a fully distributed architecture in the form of "end-to-end direct connections."

However, over the past 55 years, from Web1 to Web2, the rapid expansion of the internet's golden age has instead given rise to a "terminal connecting to a server" centralized architecture that contradicts its original intention amid the tide of commercialization and globalization. In the fragmented platform system, Web2 giants carve out their territories, holding absolute discretionary power over the online world, with significant influence and authority over value distribution.

In recent years, the wave of Web3, which upholds the banner of decentralization and de-platforming, has been gaining momentum. Merely applying decentralization is insufficient to resolve fundamental contradictions, as issues such as efficiency bottlenecks and security risks still persist. The key to fundamentally addressing these problems lies in thoroughly transforming the underlying technology stack of the internet to disrupt the efficiency and security issues caused by the excessively centralized Web2.

In this context, DePIN may offer a new solution worth paying attention to: By combining the financial attributes and incentive mechanisms of Web3, DePIN can create an efficient P2P physical resource network, build a "decentralized physical network infrastructure," and enable the network to have programmable capabilities, helping to achieve the dimensionality enhancement of "DePIN+" and construct a new internet architecture.

At the same time, the explosion of AI in the Web3 field not only injects new vitality but also witnesses a fact: blockchain applications are expanding from on-chain activities to the real world, such as RWA, AI, DePIN, and so on.

The narrative of DePIN also means that the gap between the physical reality and the ever-expanding world of blockchain is gradually becoming blurred. Next, let's take a look at the present and future of DePIN.

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Part.1 Overview of DePIN: What & Why

) What is DePIN?

The concept of DePIN has become a common topic, but it is still necessary to restate it from an organizational perspective. Here we will focus on the basic operational model of DePIN. By definition, 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 point-based resource management and has greater scalability and robustness.

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

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

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

• Professional-grade hardware: Idle computers equipped with GPU and CPU chips can start supplying computing power/data by simply downloading a browser plugin. For example, Heurist allows owners of idle GPU devices to start earning mining rewards by downloading its miner program and setting up a miner node. In the participation method on io.net, it is clearly stated 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 control endpoints for 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 utilizes the storage space of old phones to create a decentralized cloud that anyone can contribute to.

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

3. Identity Verification: After the data has been verified, it is necessary to check the on-chain account address of the device owner. Generally, public and private keys are used for identity verification. The private key is used to generate and sign physical work proofs, while the public key is used by external parties to verify the proof 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 corresponding on-chain address, which involves the token economics of DePIN. As the economic foundation of the data value network, token economics is key to whether the DePIN project can operate well.

• BME: Token burning 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 users on the supply side to stake tokens to become qualified miners. The supply determines the degree of deflation, meaning that the more miners providing services, the higher the value of the tokens.

5. Demand Matching: A DePIN market platform where buyers and sellers can purchase, sell, and lease resources to complete exchanges and match needs; 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 the decentralized autonomous organization (DAO), allowing stakeholders to participate in the decision-making process.

( Why do we need DePIN?

Take a simple example. Noise pollution is a common phenomenon in urban life. Quantifying noise pollution data not only has commercial value for real estate developers, hotels, restaurants, and other businesses, but also has reference significance for urban planning and academic research. But 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, everything becomes much simpler. For example, Silencio deploys noise pollution sensors through downloads of its application on users' phones, allowing mobile users to establish a global measurement network by providing accurate, hyper-local noise pollution data and earning token rewards in the process. Meanwhile, the platform profits by selling the noise pollution data.

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

• Centralized Control: Controlled by centralized entities, there is a risk of single points of failure, it is vulnerable to attacks, and transparency is low; users have no control over their data and operations.

• High Entry Barriers: New entrants must overcome substantial capital investment and complex regulatory hurdles, which restrict market competition and innovation.

• Resource Waste: Due to centralized management, there are phenomena of resource idle 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 Digitization: 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 towards a common goal and are incentivized in a transparent and fair manner;

• On-chain settlement: Blockchain reduces costs by becoming a single source of a shared ledger for all market participants;

• Innovation: In an open, permissionless global 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 established, such as the decentralized network Helium and decentralized storage solutions like Storj and Sia, are 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 are mainly expanding into computing power, data collection and sharing, wireless, sensors, energy, and more. However, looking at the current top 10 projects by market capitalization in the DePIN field, most belong to the storage and computing power sector.

AI is the key term for DePIN in this cycle. Due to the natural suitability of DePIN for 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 1,561, with a total market capitalization of approximately $22 billion; regarding the total potential market size of the DePIN sector, Messari has made a forecast: by 2028, the DePIN market size could exceed $35 trillion, and it could potentially add $10 trillion to global GDP over the next ten years, reaching $100 trillion ) a decade 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 DePIN dedicated chains like IoTex and Peaq. Meanwhile, Polygon and Arbitrum are gradually emerging as new contenders.

Due to the maturity of the hardware supply chain, project parties do not need to invest a lot of R&D effort, so 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 Middleware

The Internet of Things devices related to DePIN must be connected to the blockchain on a large scale, which presents technical challenges and liquidity pressures, such as hardware design and production, how to achieve credible transmission and data processing of off-chain data on-chain, and token economic design. Consequently, the DePIN sector has derived middleware that connects devices and the DePIN network, involving aspects of connectivity 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 not only includes developer-friendly tools and one-stop services like DePHY and Swan; it also has the specialized restaking protocol Parasail that serves DePIN, aimed at enhancing the liquidity and value utilization of DePIN'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 hardware products bridging the blockchain through off-chain network nodes running at 500ms synchronization 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 provision of frameworks and solutions by D