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, 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 internet prototype "ARPAnet" ( was born, adhering to the original intention 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 link server" centralized architecture with a many-to-one relationship in the wave of commercialization and globalization, which is contrary to the original intention - Web2 giants have monopolized the platform system divided into segments, controlling the absolute discretion of the online world, possessing immense influence and power over value distribution.

Therefore, in recent years, the tide of Web3, which upholds the banner of decentralization and de-platforming, has been rising. Simply applying decentralization is not enough to solve fundamental contradictions; issues 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 overturn the efficiency and security problems caused by the overly centralized Web2.

In this context, DePIN may provide a new solution worth paying attention to: by combining the financial attributes and incentive mechanisms of Web3, DePIN can build an efficient P2P physical resource network, creating a "decentralized physical network infrastructure", and enabling the network to have programmable capabilities, helping to achieve the upgrade of "DePIN+" and construct a new species that is completely different from traditional internet architecture.

At the same time, the explosion of AI in the Web3 field not only injects new vitality into it but also witnesses the gradual expansion of blockchain applications from on-chain activities to the real world, such as RWA, AI, DePIN, etc.

The narrative of DePIN also implies that the boundaries between the physical reality and the ever-expanding world of blockchain are gradually blurring. 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 been frequently discussed, but it is still necessary to restate it from an organizational perspective. Here, we will focus on the basic operating model of DePIN. From the definition, DePIN###Decentralized Physical Infrastructure Network refers to 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 single-point resource management and has greater scalability and robustness.

Generally speaking, a complete DePIN network consists of project parties, off-chain physical devices, suppliers, and demanders, and the basic operational model 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 manufactured by third-party manufacturers (Hotspot) to provide hotspot signals for nearby IoT devices and 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 providing computing power/data by simply downloading a browser plugin. For instance, with Heurist, all owners of idle GPU devices only need to download its miner program and set up a miner node to start earning mining rewards by sharing their computing power. In the participation method of io.net, it is clearly stated that the entry threshold for devices to connect to the network is the NVIDIA GeForce RTX 3050.

• Smart mobile devices: manifested as lightweight mobile devices such as smartphones, smartwatches, wristbands, and even rings, joining the DePIN network in two ways: running a node program to become a control end of DePIN hardware; directly providing sensor data or computing resources. For instance, Silencio uses the built-in microphones of people's smartphones to create a dynamic map of noise pollution around the world; Acurast utilizes 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 on-chain tamper-proof blockchain ledger through off-chain infrastructure, providing stakeholders with transparent and auditable operational records, to demonstrate that they have put in a certain amount of work to earn incentives as required. This verification method is called Physical Work Proof ( PoPW ).

3. Identity Verification: After the data is validated, it is necessary to verify the on-chain account address of the device owner, generally using public and private keys for identity verification. The private key is used to generate and sign the physical work certificate, while the public key is used externally to verify the certificate or as the identity label of 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 the key to whether the DePIN project can operate effectively.

• 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, with supply determining 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 both supply and demand sides can buy, sell, and rent, completing 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.

( 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. But would you be willing to let a private company install microphones all over your city? Or imagine the initial costs of doing so, how far its coverage could expand, and how fast the expansion could be?

And if this is a user-initiated noise detection network, it becomes much simpler. For example, Silencio, through the download of its application on users' phones, deploys noise pollution sensors. Mobile users build a global measurement network by providing accurate, hyper-local noise pollution data and earn token rewards in return, while the platform profits by selling 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 huge capital investment and operational maintenance costs, the market is often dominated by large companies or giants. This centralized industry characteristic brings several major dilemmas and challenges:

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

• High entry barriers: New entrants need to overcome significant capital investment and complex regulatory hurdles, which restricts market competition and innovation.

• Resource waste: Due to centralized management, there are phenomena of resource idleness or waste, resulting in low resource utilization.

• Insufficient incentive mechanism: The lack of an effective incentive mechanism results in low user participation and contribution of network resources.

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

• Resource sharing and digitalization: transforming 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 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.

( DePIN development status

Track: As an early field in blockchain development, DePIN has been developing for a long time. The earliest batch of projects, such as the decentralized network Helium and decentralized storage solutions like 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. The DePIN projects mainly expand into areas such as computing power, data collection and sharing, wireless, sensors, energy, etc. However, looking at the current top 10 projects by market capitalization in the DePIN field, most of them belong to the storage and computing power sectors.

AI is the keyword 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, aiming to integrate resources such as computing, storage, networking, and energy on a global scale to provide 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 have been launched has reached 1,561, with a total market cap 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 surpass $35 trillion, and it could potentially 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 deployed on the Solana public chain, as well as on DePIN-specific chains like IoTex and Peaq. Meanwhile, Polygon and Arbitrum are gradually becoming rising stars.

Due to the maturity of the hardware supply chain, project parties do not need to invest a lot of research and development effort, so according to their focus areas, the current DePIN projects are divided into two directions: one focuses on the middle layer of DePIN; the other focuses on the expansion of the demand side of DePIN.

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Part.2 DePIN Intermediate Layer

IoT devices related to DePIN need to be integrated into the blockchain on a large scale, facing 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 economy design. As a result, the DePIN track has derived middleware that connects devices and the DePIN network, involving aspects of connectivity and bidirectional services, aimed at helping project parties quickly initiate DePIN application projects, providing them with development frameworks, developer tools, overall solutions, and so on.

It not only includes developer-friendly tools and one-stop services like DePHY and Swan; it also features the re-staking protocol Parasail, which is specifically designed for DePIN, aiming to enhance 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 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, as more DePIN projects that provide frameworks and solutions emerge, DePIN application layer projects built on their infrastructure are also beginning to gradually emerge, such as base.