DePIN: An Essential Infrastructure Innovation for Web3

Decentralized Physical Infrastructure Networks (DePIN) are bringing a paradigm revolution to the Web3 space. This innovative model is collaboratively built by globally dispersed individuals and enterprises, providing open services to all users. In return, contributors of infrastructure nodes can receive economic compensation and token incentives. DePIN integrates cryptographic technology, the internet, the Internet of Things, and blockchain to achieve a more efficient, decentralized, and equitable way of deploying infrastructure.

The Importance of DePIN to Web3

Although Web3 has developed a rich array of application scenarios built on Layer 1 and Layer 2, such as DeFi, gaming, NFTs, social networking, and physical assets, these applications still rely on centralized cloud services and data centers. The industry has repeatedly seen data loss in Web3 projects due to large cloud platform failures, or inability to access certain services due to regulatory restrictions. Therefore, DePIN has become an indispensable infrastructure for achieving a truly decentralized Web3.

Compared to traditional centralized physical infrastructure networks, DePIN has the following advantages:

1. Low participation cost: Utilize the collective resources of network participants to reduce management fees.
2. Network robustness: The decentralized structure provides a more resilient and secure infrastructure.
3. Open competition and innovation: Eliminate the high capital threshold of traditional networks to promote the participation of small-scale players.

Features and Classification of DePIN

The core logic of DePIN includes the following roles:

• Device Provider: Provides physical resources and earns token rewards.
• DePIN Protocol: Build a distributed network and design incentive mechanisms.
• Network users: Use DePIN services and pay fees.

DePIN projects are mainly divided into categories such as decentralized storage, computing, CDN, VPN, WiFi, and 5G networks. Most DePIN projects have three basic components:

1. Physical infrastructure: Build distributed network nodes.
2. Off-chain computing infrastructure: Capturing and analyzing real-world data.
3. Blockchain and Tokens: As ledgers, registries, and incentive mechanisms.

DePIN Project Case

Filecoin: Decentralized Storage Network

As the world's largest distributed storage network, Filecoin has over 3,800 storage providers with a total capacity exceeding 17 EB. Its vision is to bring open and verifiable characteristics to the core pillars of the data economy (storage, computing, content distribution).

Render Network: Decentralized GPU Rendering Platform

Render Network provides distributed GPU computing services for the 3D rendering and AI industry. In the first half of 2023, the platform completed over 4.6 million rendering jobs at an average cost of 20 dollars, offering a certain price advantage.

Helium: Decentralized Wireless Network Protocol

Helium incentivizes global users to collaboratively build a wireless network. Its native token HNT can be used to generate data credits, which are crucial for transmitting device data. Helium has deployed nearly 1 million hotspots in just three years, covering over 77,000 towns in 192 countries.

Livepeer: Decentralized live video broadcasting platform

Livepeer provides live and on-demand streaming services for developers and creators. Through a cryptoeconomic protocol, it incentivizes nodes to contribute GPU and bandwidth resources for real-time video encoding and distribution.

Theta: Decentralized Video Streaming Network

Theta incentivizes users to share computing power and bandwidth resources through tokens, serving as caching or relay nodes for video streams, improving video quality and reducing distribution costs. Its dual-network architecture consists of the Theta blockchain and edge network, responsible for payment, rewards, smart contract functions, as well as storage and delivery of media assets.

Summary

DePIN, as an early-stage development track, has shown a rapid growth trend in recent years. According to research predictions, the total potential market size of the DePIN industry is approximately $2.2 trillion, and it is expected to reach $3.5 trillion by 2028. Currently, the fully diluted valuation of all decentralized physical infrastructure projects is only $5 billion, indicating significant development potential.