DePIN: The Key Infrastructure for Web3 Development

Decentralized Physical Infrastructure Networks (DePIN) are an innovative mode of infrastructure deployment and maintenance. It is constructed collaboratively by globally distributed individuals and enterprises for the use of all. Participants can receive corresponding economic compensation and token incentives by contributing physical infrastructure nodes. DePIN combines cryptographic technology, the internet, the Internet of Things, and blockchain to achieve a more efficient, decentralized, and equitable mode of infrastructure deployment.

The Importance of DePIN to Web3

Despite the rich application scenarios that Web3 has developed on Layer 1 and Layer 2, such as DeFi, gaming, NFTs, social, and physical assets, these applications still rely on centralized cloud services and data centers as internet infrastructure. This reliance has led to some issues, such as data loss caused by cloud platform failures or certain Web3 projects being unable to access services due to regulatory restrictions. Therefore, DePIN has become an indispensable infrastructure for achieving a true Web3.

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

1. Low participation threshold: By leveraging the collective resources of network participants, management costs are reduced.
2. Strong network stability: A decentralized network provides a more resilient and secure infrastructure, less susceptible to single points of failure.
3. Promote open competition and innovation: DePIN eliminates the high capital and large-scale entry barriers of traditional infrastructure networks, facilitating the entry of small-scale new participants.

Characteristics and Classification of DePIN

The operational logic of DePIN includes three key roles:

1. Device Providers: Provide physical device resources and earn token rewards.
2. DePIN Protocol: Build a distributed network, design a token incentive mechanism, and provide services for network users.
3. Network users: Access the DePIN protocol, use the service and pay.

DePIN projects are mainly divided into the following categories: decentralized storage, decentralized computing, CDN, VPN, WiFi, and 5G networks.

Most DePIN projects consist of three basic components:

1. Physical infrastructure: Build and maintain a distributed physical infrastructure network.
2. Off-chain computation infrastructure: used to capture and analyze real-world data, calculating user contributions.
3. Blockchain and Tokens: Serving as a tamper-proof ledger, device registry, and task scheduling platform, while tokens are used for incentives and service pricing.

DePIN Project Case

Decentralized Storage Network

A well-known project is the world's largest distributed storage network, with over 3,800 storage providers, offering more than 17M TB of storage capacity. The project aims to introduce open and verifiable features into the three core pillars of the data economy: storage, computing, and content distribution.

Decentralized GPU Rendering Platform

A decentralized GPU rendering platform will match users needing rendering jobs with users who have idle GPUs, for distributed GPU computing in the 3D rendering and AI industries. In the first half of 2023, the platform completed over 4.6 million frames of rendering jobs at an average cost of $20, which offers a certain price advantage over centralized platforms.

Decentralized Wireless Network Protocol

An open-source protocol incentivizes global users to collaboratively build wireless networks. The native cryptocurrency of this protocol can be used to generate data credits, which are crucial for transmitting device data. Based on this protocol, applications such as IoT networks and 5G networks have been developed. It is reported that the project has deployed nearly 1 million hotspots in over 77,000 towns across 192 countries.

decentralized live video broadcasting platform

A video infrastructure network for live and on-demand streaming, designed to provide developers with innovative freedom and creators with platform autonomy. The project incentivizes nodes to contribute GPU and bandwidth in real-time video encoding and distribution services through a cryptoeconomic protocol.

Decentralized Video Streaming Network

A decentralized video streaming platform based on blockchain technology incentivizes individual users to share surplus computing power and bandwidth resources through tokens, serving as cache or relay nodes for video streams, thereby improving video quality and reducing distribution costs. The platform consists of two complementary subsystems: blockchain and edge networks, which are responsible for payment, rewards, smart contract functions, as well as the storage and delivery of media assets.

Summary

DePIN is a track that has been developing since the early days of the industry and has seen significant expansion in recent years. According to a certain research institution, the total potential market size of the DePIN industry is approximately $2.2 trillion, and it could reach around $3.5 trillion by 2028. In contrast, the fully diluted valuation of all decentralized physical infrastructure projects currently stands at only $5 billion, indicating immense growth potential.