Narratives on the rise: A peek into DePIN’s present and future

introduction

The Internet, now a symbol of globalization, is actually a product of the peak of the Cold War.

In 1969, the U.S. military, which was in the era of "nuclear deterrence", hoped to have a network that could avoid centralized single points of failure and recover autonomously in the event of a sudden nuclear attack. Therefore, the prototype of the Internet, "ARPAnet", Adhering to the original intention of "decentralization", a fully distributed architecture with "terminals directly connected to terminals" came into being.

In the past 55 years, from Web1 to Web2, along with the rapid expansion of the golden age of the Internet, the wave of commercialization and globalization has given rise to the many-to-one centralized architecture of "terminal link servers", which increasingly runs counter to the original intention - Article In the block-divided platform system, Web2 giants are kings of the land, control the absolute discretion in the online world, and have pivotal influence and value distribution power.

Therefore, in recent years, the Web3 wave that advocates decentralization and de-platform narratives has only just begun. Simply applying decentralization is difficult to solve the fundamental contradictions. Problems such as efficiency bottlenecks and security risks still exist. How to completely transform the underlying technology stack of the Internet? Subverting the efficiency and security problems caused by the current over-centralization of Web2 is the only way to stop the problem.

In this context, DePIN may provide a new solution worthy of attention: by combining the financial attributes and incentive mechanisms of Web3, DePIN can build an efficient P2P physical resource network, create a "decentralized physical network infrastructure", and It makes the network programmable and helps realize the dimensionality of "DePIN+" to build a new species that is completely different from the traditional Internet architecture.

At the same time, the popularity of AI in Web3, in addition to injecting new vitality into it, has also witnessed the fact that blockchain applications are gradually expanding from on-chain activities to the real world, such as RWA, AI, and DePIN.

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

Part.1 DePIN Overview: What & Why

What is DePIN?

The concept of DePIN is already a cliché, but it still needs to be re-elaborated from a combing point of view. Here we focus on the basic operating mode of DePIN. By definition, DePIN (Decentralized Physical Infrastructure Network) is a model that combines physical infrastructure resources with blockchain technology to coordinate global transactions through distributed ledgers, Token incentives and smart contracts. Internal resource collaboration.

In short, DePIN creates a two-sided market of "resource sharing + economic incentives" by linking hardware and blockchain . This community-driven model is more flexible and efficient than traditional single-point resource management. With scale effect and robustness.

Generally speaking, a complete DePIN network consists of the project side, off-chain physical equipment, supply side and demand side. The basic operation mode is divided into five steps:

1. Off-chain hardware equipment: usually provided or required by the project party, mainly divided into:

• Customized dedicated hardware: For example, Helium requires users to purchase Helium hardware hotspots (Hotspots) manufactured by third-party manufacturers to provide hotspot signals for nearby IoT devices to obtain mining rewards; Hivemapper uses its dedicated driving recorder (HiveMapper Dashcam) Users are encouraged to contribute to the map network.

• Professional-grade hardware: An idle computer equipped with a GPU or CPU chip can start participating in the supply of computing power/data by simply downloading a browser plug-in. For example, Heurist, for owners of idle GPU equipment, they only need to download their miner program and set up a miner node, and then they can start to obtain mining rewards by sharing their computing power. In the participation method of io.net, it is clear that the equipment and The starting threshold for the Internet is NVIDIA GeForce RTX 3050.

• Smart mobile devices: embodied in lightweight mobile devices such as smartphones, smart watches, bracelets and even finger rings, they join the DePIN network in two ways: running node programs and becoming the control end of DePIN hardware; directly providing sensor data or computing resources . For example, Silencio uses the built-in microphones of people’s smartphones to create dynamic maps of noise pollution around the world; Acurast uses the storage space of old mobile phones to build a decentralized cloud that anyone can contribute to.

2. Proof : The data generated by physical equipment needs to be uploaded to the chain through the off-chain infrastructure and recorded on the tamper-proof blockchain ledger, providing stakeholders with transparent and auditable infrastructure operation records to prove their Having put in a certain amount of work as required to obtain incentives, this verification method is called physical proof of work (PoPW).

3. Identity verification: After the data is verified, the on-chain account address of the device owner needs to be verified. Public and private keys are generally used for identity verification. The private key is used to generate and sign physical proof of work, while the public key is used by the outside world. Used for verification proof or as an identity tag (Device ID) of a hardware device.

4. Reward issuance: After checking the data, the token rewards obtained by the off-chain physical equipment 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 the smooth operation of the DePIN project.

• BME: Token burning mechanism. Users on the demand side will destroy the tokens after purchasing services. The degree of deflation is determined by demand; that is to say, the stronger the demand, the higher the value of the token.

• SFA : Users on the supply side are required to pledge tokens to become qualified miners. The supply determines the degree of deflation, that is, the more miners provide services, the higher the value of the tokens.

5. Demand matching: A DePIN market platform where supply and demand parties purchase, sell, and lease resources to complete 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. Helps ensure fair pricing and is typically managed by a decentralized autonomous organization (DAO), allowing stakeholders to participate in the decision-making process.

 _Source: FMG_

Why do we need DePIN?

Give a simple example. Noise pollution is a particularly common phenomenon in urban life. The quantification of noise pollution data not only has commercial value for real estate developers, hotels, restaurants and other enterprises, but also has reference significance for urban planning and academic research, but you will be happy Let a private company install microphones throughout your city? Or imagine the upfront cost of doing this, how far could it extend coverage? How fast is it expanding?

And if this is a noise detection network spontaneously formed by users, everything will be much simpler. Silencio, for example, deploys noise pollution sensors through the download of its app on users’ mobile phones. Mobile users build a global measurement network by providing accurate, hyper-local noise pollution data and receive token rewards for doing so. , the platform makes money by selling noise pollution data.

This is part of what DePIN is about. In traditional physical infrastructure networks (such as communication networks, cloud services, energy networks, etc.), due to huge capital investment and operation and maintenance costs, the market is often dominated by large companies or giant companies. This centralized industry characteristic brings The following major difficulties and challenges have been identified:

• Centralized control: controlled by a centralized organization, there is a risk of single point of failure, vulnerable to attacks, and low transparency. Users have no control over data and operations.

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

• Resource waste: Due to centralized management, resources are idle or wasted, and resource utilization is low.

• Insufficient incentive mechanism: There is a lack of effective incentive mechanism, and users are not very motivated to participate in and contribute network resources.

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

• Resource sharing and digitization: transform idle physical resources (such as storage, communication, computing power) into tradable digital assets in a decentralized manner;

• Decentralized governance: Based on open protocols and encrypted economic models, users contribute capital, assets and labor to the same goal and are incentivized by transparency and fairness;

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

• Innovation: In an open, permissionless global elixir system, experimentation is an order of magnitude faster than on centralized infrastructure.

DePIN development status

Track: As an earlier field of blockchain development, DePIN has been developing for a long time. The first batch of projects established, such as the decentralized network Helium, and decentralized storage Storj and Sia, basically focus on storage and communication technologies. aspect.

 _Source: Messari_

However, with the continuous development of the Internet and the Internet of Things, there are more and more infrastructure requirements and innovation needs. DePIN's projects have mainly expanded to computing power, data collection and sharing, wireless, sensors, energy, etc. However, from Judging from the current top 10 projects in the DePIN field by market value, most of them belong to the storage and computing fields.

AI is the keyword of DePIN in this cycle. Since DePIN is naturally suitable for the decentralized sharing of AI data and computing power, a number of AI DePIN projects have emerged, dedicated to integrating computing, storage, and networks around the world. and energy and other resources to provide underlying infrastructure support for the training, inference, and deployment of AI models.

 _Source: CoinMarketCap_

Market size: According to data from DePIN Ninja, the number of DePIN projects currently online has reached 1,561, with a total market value of approximately US$22 billion; Messari predicts the total potential market size of the DePIN sector: By 2028, the DePIN market size may Breaking through 3.5 trillion US dollars, it may also add 10 trillion US dollars to global GDP in the next ten years (100 trillion US dollars after ten years).

L1/L2: Due to high throughput and low gas fees, current DePIN projects are mainly deployed on the Solana public chain, as well as DePIN private chains like IoTex and Peaq. At the same time, Polygon and Arbitrum have gradually become rising stars.

![Narratives on the rise: A peek into DePIN’s present and future](https://cdn-img.panewslab.com/panews/images/SYncmW9I29.png)


 Image source: Cryptoresearch

Since the hardware supply chain is very mature, the project side does not need to invest a lot of R&D energy. Therefore, according to the focus, the current DePIN project is divided into two directions. One is focused on the middle layer of DePIN; the other is focused on the expansion of the demand side of DePIN. .

Part.2 DePIN middle layer

For DePIN-related IoT devices to be connected to the blockchain on a large scale, there are technical difficulties and liquidity pressures , such as hardware design and production, how to realize off-chain data, and how to achieve trusted transmission and data processing on the chain. , Token economic design. As a result, the DePIN track has derived middleware that connects devices and DePIN networks, involving connections and two-way services. It aims to help project parties quickly start DePIN application projects and provide them with development frameworks, developer tools, and overall Solutions and more.

It not only includes developer-friendly tools and one-stop services like DePHY and Swan; there is also Parasail, a re-pledge protocol that specifically serves DePIN, aiming to enhance the liquidity and value utilization of the native tokens of the DePIN network.

DePIN infra

• DePHY: Aims to provide open source hardware solutions, SDKs and tools for the DePIN project, and reduce the manufacturing and network messaging costs of hardware products bridging the blockchain by synchronizing 500ms-level off-chain network nodes running on the blockchain.

• W3bStream: The off-chain computing protocol W3bstream allows the IoTeX DePIN project to easily generate logic based on smart device data to trigger blockchain operations. Some well-known IoTeX-based DePIN projects are Envirobloq, Drop Wireless and HealthBlocks.

At present, as the number of DePIN projects that provide frameworks and solutions increases, DePIN application layer projects based on its infra are also gradually emerging, such as Pebble's EnviroBLOQ based on IoTeX, Dimo ​​and Drife based on W3bstream, and Starpower and Apus Network based on DePHY etc.

Liquidity plan

• PINGPONG is a DePIN liquidity and service aggregator that optimizes and maximizes mining revenue across multiple networks through innovative tools and solutions.

• Parasail is a re-pledge protocol specifically designed to serve DePIN. By activating idle assets (such as pledged or re-pledged tokens) in mature networks, it provides economic guarantee for DePIN services and helps the DePIN project attract more users and service providers.

Take Parasail as a detailed example. Currently, Parasail mainly provides re-pledge services on the Filecoin chain. In the future, it will open up re-pledge services on the Iotex, Arbitrum, and Ethereum chains. The following uses FIL as an example of how Parasail works:

• Staking FIL for Tokenization : Storage Providers can stake FIL and mint pFIL tokens at a 1:1 ratio.

• Open market for pFIL: Storage providers can sell pFIL to obtain liquidity, and token holders can purchase pFIL to obtain FIL mining rewards.

• Risk recovery and reward distribution: When the pledged FIL is released or the miner receives the block reward, the Repl protocol recycles the FIL and repurchases pFIL through the auction, and the excess proceeds are distributed as rewards.

Part.3 DePIN application layer

The DePIN application layer occupies the majority of the number of DePIN tracks. This article is based on the public research report data and the DePIN browser project summary, which is mainly divided into cloud network (storage, computing), wireless network (5G, WiFi, Bluetooth, LoRaWAN), Four major sectors: sensors (environment, geography, health) and energy.

cloud network

DePIN's fields on cloud networks include decentralized storage and computing.

▎Storage

Decentralized storage is a key part of the DePIN ecosystem, aiming to solve the problems of traditional centralized storage such as high cost, privacy risks and insufficient censorship resistance:

• As one of the most well-known DePIN projects, Filecoin is based on IPFS technology (IPFS itself is already a widely recognized distributed file system) and uses a storage proof mechanism to ensure data integrity and authenticity. Miners obtain FIL by contributing storage space As a bonus, users pay as they go to store their data. This model not only reduces storage costs, but also activates a large number of idle hard disk resources around the world;

• Arweave provides a permanent storage solution where users only need to pay once, which is ideal for data that needs to be preserved for a long time, such as historical archives, NFT metadata or blockchain transaction records;

Overall, decentralized storage is clearly superior in censorship resistance and transparency compared to traditional cloud storage, but storage speed and initial entry barriers may still be issues that need to be optimized.

▎Computing power

Computing power is the core productivity resource of this wave of AI. DePIN projects such as decentralized computing power are a misplaced complement to the existing computing power service pattern (CePIN) dominated by centralized cloud giants, rather than a direct replacement: that is, Cloud service giants with massive computing power resources are responsible for "urgent and dangerous needs" such as large model training and high-performance computing; the decentralized cloud computing power market is responsible for more diversified "small and medium-sized model calculations, large model fine-tuning, inference deployment, etc." Flexible and low-cost needs”.

In fact, it is to provide a more inclusive dynamic balance supply and demand curve between cost-effectiveness and computing power quality, which is also more in line with the economic logic of optimal resource allocation in the market. Represented by established decentralized computing projects such as Render Network and Akash Network, as well as this year’s latest DeAI fusion narrative giant io.net:

• Render Network : Provides decentralized GPU rendering services, which can provide flexible and low-cost computing power support for applications that require real-time computing (such as virtual reality, 3D rendering and industrial automation), especially in the metaverse and real-time interaction fields. value;

• io.net: Going one step further, it is not only a matching platform for computing resources, but also achieves efficient collaboration of distributed GPUs through a complete set of product architecture:

• IO Cloud: supports users to create GPU clusters according to needs for complex tasks such as AI model training;

• IO Worker: Provides management tools for computing power suppliers, including temperature control monitoring, computing power utilization analysis, etc.;

• IO Explorer: Provides visualization of network statistics and reward data to facilitate users to track the dynamic flow of computing resources;

• PinGo is an AI and DePIN project on the TON network. Its purpose is to solve the problem of fragmentation and idleness of idle computing resources and provide a computing power basis for building AI models. PinGo, originally a Cpin Web2 company, has nearly 100,000 devices that will be integrated into its own DePIN network in the future.

However, it is not easy to decentralize computing power to revitalize idle computing power. What is most needed for large model training is stability. If it is interrupted, the sunk cost will be too high. Because the technical details of computing power delivery are complex, bilateral scheduling models like Uber and Airbnb fail here. In addition, NVIDIA's CUDA software environment and NVLINK multi-card communication make replacement costs extremely high. NVLINK's physical distance restrictions on graphics cards require graphics cards to focus on the same data. center.

In this context, the business model of decentralized computing power supply is difficult to realize and has been reduced to a simple narrative. Many computing power projects have been forced to abandon the training market and instead serve the inference market. However, when applications have not exploded on a large scale, the demand for reasoning is insufficient. Large enterprises can meet their reasoning needs through self-construction, which is more stable and cost-effective.

wireless network

Dewi (decentralized wireless) is a particularly important part of the DePIN track. It provides services for the Internet of Things and mobile communications by allowing many independent entities or individuals to collaborate to establish a wireless infrastructure based on Token incentives. Sharable wireless networks include:

• Cellular 5G: Provides high download speeds and low latency, such as Pollen Mobile, which uses decentralized base stations to build a distributed 5G network with the goal of reducing mobile communication costs and improving coverage;

• WiFi: Provides network connections in specific areas, such as Wicrypt. Users can purchase dedicated equipment to contribute WiFi and earn tokens; Metablox (now renamed Roam) is similar to the "Web3 version of master key" through which users can share their own The global public WiFi network; Wifi Dabba, mainly cooperates with local priority TV operators in India.

• Low Power Wide Area Network (LoRaWAN): Provides convenience for Internet of Things communications. Head DePIN project Helium is a typical representative. Through LoRaWAN routers, it provides low-cost, high-coverage communication services for Internet of Things devices, thus replacing the centralization of traditional telecommunications networks. service model. Users receive HNT rewards by running routers. This model is particularly suitable for scenarios that require large-scale equipment coverage, such as agricultural Internet of Things, logistics tracking, and environmental monitoring.

• Bluetooth: realizes short-distance data transmission.

This network model is suitable for scenarios such as smart cities and agricultural Internet of Things. However, the advantage of decentralized communication lies in its low-cost replacement of traditional telecommunications infrastructure. However, deployment efficiency and maintenance of physical equipment are still challenges that cannot be ignored. Dewi needs to use the network power of traditional operators to expand the market, such as DePIN, which complements traditional operators or provides them with corresponding data.

sensor

Sensor networks are another niche area of ​​​​DePIN and basically consist of interconnected devices, each designed to monitor and collect specific data in their environment, mainly through the monitoring of environmental, geolocation, health, etc. and capture:

• Environment: An obvious use case is weather forecasting, and WiHi hopes to become a unified platform that connects all these entities, simplifying data sharing, increasing forecast accuracy, and improving climate monitoring. Any entity operating weather sensors can apply to contribute data to WiHi.

• Geography: HiveMapper, for example, collects the latest high-resolution data (4K street-level images) through on-board cameras installed by holders (such as taxi drivers and couriers), and contributes its data to the collection of map images to obtain token rewards. Demand By purchasing existing maps or offering new area data for emergencies, it is now possible for insurance assessments to obtain timely data on the exterior condition of homes, for autonomous vehicle developers to obtain the latest road conditions and construction zone information, and for real-world assets (RWA). Have real business value.

energy

Traditional energy markets face the following problems: mismatch between supply and demand in regional energy networks, lack of transparent and tradable energy markets, huge untapped clean energy markets, and slow and costly expansion of energy networks. And by decentralizing the energy network, DePIN enables users to utilize their excess energy production in a direct manner. This approach not only encourages more prudent energy consumption but also reduces reliance on traditional energy suppliers. The DePIN approach to energy networks can provide a more democratic, efficient and beneficial model for energy production and consumption.

• Starpower: By creating a decentralized virtual power plant (VPP), it connects the small power supply network with the demand side, reducing energy transmission and improving energy utilization efficiency.

• Powerpod: Transforming electric vehicle (EV) charging by creating a decentralized network of community charging stations.

• Arkreen: Build applications and services by incentivizing providers to provide capacity and other similar data on solar installations, including Renewable Energy Certification (REC) issuers and green computing operators providing access to the data.

Part.4 What do you think of the future of DePIN?

DePIN Trends

▎Integrated with web2 application scenarios

The potential of DePIN lies not only in its underlying decentralized technology advantages, but also in a wide range of web2 industry application scenarios, which span multiple fields such as the Internet of Things (IoT), smart cities, energy sharing, and edge computing. Each of these fields Represents DePIN's important role in promoting the integration of the physical world and digital networks.

One can imagine a life scenario in the future. One morning in 2030, while Alice was going to work, Helium was started to provide communication support for nearby pedestrians and devices. On the way to work, she opened DIMO to record her own vehicle equipment data, and continued to contribute the latest map data to Hivemapper. Then she arrived at the office, which is a solar energy company. Alice skillfully installed Arkreen collection equipment for each solar module for the convenience of users. Keep track of your carbon footprint.

 _Source: Waterdrip Capital_

▎Hardware threshold lowered

Previously, the main business of DePIN equipment included computing power, storage and bandwidth, and the equipment was usually fixed at a certain location. Currently, DePIN is showing a transition from professional-level equipment to consumer-level products on the hardware side, such as mobile phones (Solana Mobile Saga), watches (WatchX ), AI smart ring (CUDIS), electronic cigarette (Puffpaw), etc. The devices are small and flexible and can be carried around or even worn.

As the most popular hardware device, the lowering of the hardware threshold is expected to promote the further expansion of the user layer: on the one hand , the sensors and computing modules of encrypted mobile phones are natural recruitment ends, and can participate in the DePIN economy as DePIN devices, lowering the sales threshold and increasing the frequency of use; On the other hand, the encrypted application market built into encrypted mobile phones is an excellent user entrance for dAPP. This type of market has a wide variety of types and a wide range of applications. It needs to be further explored and is a blue ocean with huge potential.

▎Financialization ​

The tokenization of physical hardware has also opened up the imagination space of on-chain finance for DePIN:

• Pledge liquidity pools to increase sources of income, such as the HONEY-JitoSOL Liquidity Vault Incentive Plan launched by Hivemapper, which further improves the incentive effect.

• DePIN hardware asset securitization is put on the chain, and traditional financial products similar to the Reits model are issued;

• Based on the tokenization of data assets, financial products supported by data can be created. For example, DIMO's car data can be used for on-chain car loans.

▎ DePIN and AI feed each other

The characteristics of DePIN are also naturally suitable for the development of AI.

First of all, DePIN can serve AI at multiple levels such as computing power, models, and data, releasing capabilities that AI does not originally have in a decentralized manner. AI is essentially an intelligent system based on massive data training. The rich end-side data collected by IoT devices in DePIN provides a wide range of training and application scenarios for AI. Currently, many AIPIN projects capture data through hardware sensors and reuse it. AI optimizes data processing capabilities, realizes end-to-end process automation at the application level, and unleashes the potential of industry segmentation scenarios.

At the same time, the addition of AI also makes DePIN more intelligent and sustainable. AI can improve equipment efficiency and optimize network resource allocation through deep learning and prediction. It can also help audit smart contracts, provide personalized services, and even dynamically adjust the economic incentive model of the DePIN project through algorithms.

DePIN’s constraints to scale

Although the DePIN concept is attractive, the complexity of technology implementation, market acceptance, regulatory policies, etc. has significantly increased the difficulty of its implementation on a large scale:

• From storage to computing power, from communications to energy, each DePIN solution needs to integrate different types of physical hardware and decentralized protocols, which places extremely high demands on hardware manufacturers, network developers and participating nodes;

• In addition, the market 's acceptance of the DePIN model is still unclear . In practical applications, how to convince companies or individuals to switch to DePIN's network infrastructure and pay the high initial cost is still an unsolved problem;

• The uncertainty of the profit model also limits the appeal of DePIN. Currently, many projects rely on the token economy to motivate participants to provide resources. However, whether this model can maintain long-term sustainability depends on the market's recognition of the token value. and the growth rate of actual demand; the problem is that the narratives of most projects are slightly outdated, the product experience is insufficient, and it is often difficult to compete with Web2. If you rely solely on Token incentives to attract users, you may fall into a "death spiral" once the incentive model collapses. The stability of the economic system is crucial due to its reliance on hardware sales revenue and the dual flywheel of the token model. If the token value fluctuates too much, or the cost of hardware deployment and maintenance is too high, the economic incentives of the entire system will be difficult to maintain, which may lead to user loss or even network paralysis.

• At the same time, because DePIN involves key areas such as storage, computing, and communications, its potential influence may trigger national or regional legal and policy intervention . For example, decentralized storage networks may be used to store sensitive or illegal content, which may lead to certain The country’s regulatory authorities are putting pressure on the entire network to adopt stricter content review mechanisms (someone has previously stored politically sensitive information through decentralized storage projects);

In general, from technical complexity to market acceptance to regulatory uncertainty, every step is related to whether it can truly become a new benchmark for infrastructure. How to break through this pattern and let users truly feel the economics and unique value of DePIN is the competitive pressure it must face.

Part.5 Factors to consider for a potential DePIN project

▎Hardware

• Homemade vs. third-party: Currently, most of the DePIN project-specific hardware is produced by third-party hardware. The advantage is that it can ensure its professionalism, but the hidden worry is that its expansion may be affected by its third-party supply chain. In comparison, projects with strong hardware supply chain capabilities can use equipment sales and agent models to achieve first-line success. The stage of the curve achieves rapid business growth.

• One-time vs. ongoing costs: Some DePIN networks have one-time costs, such as Helium. After purchasing its hardware equipment to set up a hotspot, it provides passive coverage to the network without requiring users to do much extra work; some require continuous coverage. of user participation. The DePIN network will scale more easily if contributors pay a one-time cost (time or money) at the beginning, rather than an ongoing cost; passive networks are easier to set up and therefore easier to scale.

• High Density VS Low Density: The density of hardware coverage also needs to be taken into account in DePIN projects, such as XNET, which is building a carrier-grade CBRS wireless network. Their network radios need to be installed by local ISP professionals, which is difficult to install and is not conducive to dense deployment. However, because their equipment is more professional, their network still has potential for expansion. High-density networks require more contributors to reach threshold size. Conversely, less dense networks can leverage more sophisticated hardware and/or specialized contributors.

• Rare VS Common: For example, XNET is building a carrier-grade CBRS wireless network. Their network radios need to be installed by professionals from local ISPs. The difficulty of installation is not conducive to dense deployment. However, because the equipment is more professional and resources are scarce, their network still has potential for expansion.

▎The design of token economy

Token economics, as the economic foundation of the data value network, is the key to the smooth operation of the DePIN project. The two currently mainstream ones are BME (burn and mint equilibrium) and SFA (stake for access). BME and SFA constitute the basic core framework of the DePIN project, and the empowerment of tokens completes the token economy, such as:

• Use points as a pre-mining commitment to miners, and redeem them at a certain ratio after the tokens are issued, or adopt an economic model of points + tokens.

• Give the token governance functions, allowing holders to participate in major network decisions, such as network upgrades, fee structures, or reallocation of the treasury.

• The pledge mechanism encourages users to lock tokens and maintain the stability of token prices;

• Project parties can also use part of their income to purchase tokens and pair them with other major cryptocurrencies or stablecoins to join the liquidity pool to ensure that the tokens have sufficient liquidity so that users can trade without significantly affecting the price.

These mechanisms help ensure that the interests of users on both the supply and demand ends are aligned with the interests of the project parties in the long term, thereby achieving the long-term success of the project.

Summarize

Looking at the macro perspective, we will find that Web3, as a value network, has great potential to reshape production relations and release productivity. The core logic of DePIN is to build a distributed two-sided market by adopting the infrastructure of "Web3+ Token Economy". From this perspective, whether it is storage, computing power, data or communication networks, it is possible to take on new life with the help of DePIN's new model.

By integrating global idle resources (such as storage, computing power, communication equipment, etc.), we solve the problems of resource monopoly and low allocation efficiency under the traditional centralized model. This model effectively connects global hardware resources with user needs, not only reduces the cost of resource acquisition, but also improves the flexibility and risk resistance of the infrastructure, laying the foundation for the popularization and application of decentralized networks.

However, although DePIN has shown great development potential, it still faces challenges in terms of technology maturity, service stability, market acceptance and regulatory environment. Today, blockchain performance, token economic models are increasingly rich and mature, and market cycles are all ready for the explosion of DePIN, but large-scale applications still lack opportunities. "Stand by your side and wait for the right time, don't compete with fate." DePIN relies on the flywheel effect, which requires extensive observation and acceptance, accumulation and accumulation, and it will never become a silent narrative.

Reference:

State of depin 2023

https://DePIN.ninja/leader-board

https://DePINhub.io/rankings/investors

FMG in-depth research report: 5 opportunities in the DePIN track from bottom to top

Archaeological DePIN, looking for the "legitimacy" of the track

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