Unveiling DePIN: The Rise and Future of Decentralized Physical Infrastructure

Introduction

The Internet, as a symbol of globalization, actually originated from a product of the Cold War period. In 1969, during the era of nuclear deterrence, the U.S. military hoped to establish a decentralized network that could autonomously recover after a nuclear strike, which led to the birth of the Internet prototype "ARPANET".

However, over the past 55 years, from Web1 to Web2, the internet has gradually formed a centralized architecture in the wave of commercialization. Web2 giants monopolize the discourse and value distribution in the online world. In recent years, the Web3 wave has emerged, aiming to reshape the original intention of decentralization in the internet.

In this context, DePIN( Decentralization Physical Infrastructure Network) provides a new solution: by leveraging the financial attributes and incentive mechanisms of Web3, it builds an efficient P2P physical resource network, creates decentralized network infrastructure, and endows it with programmable capabilities.

The rise of DePIN marks the expansion of blockchain applications from on-chain to the real world. This article will delve into the current status and future development of DePIN.

Overview of DePIN: Definition and Value

Definition of DePIN

DePIN( Decentralization Physical Infrastructure Network) is a model that combines physical infrastructure resources with blockchain technology. It coordinates global resource collaboration through distributed ledgers, token incentives, and smart contracts.

In short, DePIN creates a "resource sharing + economic incentive" bilateral market by combining hardware with blockchain. This community-driven model is more flexible than traditional centralized management, with stronger scale effects and robustness.

Basic Operating Model of DePIN

1. Off-chain hardware devices: including dedicated hardware, professional-grade hardware, and smart mobile devices

2. Proof: Prove through physical work that the data generated by the (PoPW) verification device.

3. Identity verification: Verify the on-chain address of the device owner.

4. Reward Distribution: Distribute token rewards to the addresses that have passed verification.

5. Demand Matching: Completing resource exchange and matching on the DePIN market platform.

The value of DePIN

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

• Resource Sharing and Digitization: Converting idle physical resources into tradable digital assets

• Decentralization governance: Based on open protocols and cryptoeconomic models, achieving fair and transparent incentives

• On-chain settlement: Reduce costs through blockchain

• Innovation: In open and permissionless systems, the speed of experimentation is faster.

Current Status of DePIN Development

Main Track

The DePIN project mainly focuses on fields such as storage, computing power, data collection and sharing, wireless networks, sensors, and energy. Among these, storage and computing power rank at the top in terms of market value.

AI is the keyword for this round of DePIN, giving rise to a batch of AI DePIN projects that provide infrastructure support for AI model training and deployment.

Market Size

Currently, there are 1561 DePIN projects online, with a total market value of approximately 22 billion USD. Messari predicts that by 2028, the DePIN market size may exceed 3.5 trillion USD.

Public Chain Distribution

The DePIN project is mainly deployed on public chains such as Solana, IoTex, Peaq, etc. Polygon and Arbitrum are also gradually becoming emerging choices.

Development Direction

The current DePIN projects are mainly divided into two directions:

1. Focus on the intermediate layer of DePIN
2. Focus on the expansion of the DePIN demand side.

DePIN Middle Layer

The DePIN middleware aims to connect devices and the DePIN network, providing developers with frameworks, tools, and overall solutions. It mainly includes:

DePIN Infrastructure

• DePHY: Provides open-source hardware solutions, SDKs, and tools

• W3bStream: Allows IoTeX DePIN projects to generate logic based on smart device data to trigger blockchain operations.

Liquidity Program

• PINGPONG: DePIN Liquidity and Service Aggregator

• Parasail: A re-staking protocol specifically for DePIN

DePIN Application Layer

The DePIN application layer is mainly divided into four major sectors:

Cloud Network

• Storage: such as Filecoin, Arweave, etc.

• Computing power: such as Render Network, io.net, PinGo, etc.

Wireless Network

• Hive 5G: like Pollen Mobile

• WiFi: such as Wicrypt, Metablox

• LoRaWAN: like Helium

• Bluetooth

sensor

• Environment: such as WiHi

• Geography: such as HiveMapper

Energy

• Starpower: Create a Decentralized Virtual Power Plant

• Powerpod: Create a Decentralization community charging station network

• Arkreen: Building a Renewable Energy Data Network

Future Trends of DePIN

1. Integration with Web2 application scenarios: expanding into fields such as the Internet of Things, smart cities, and energy sharing.

2. Lowering hardware thresholds: Transitioning to consumer-grade products, such as smartphones, watches, rings, etc.

3. Financialization: Tokenization of hardware assets, development of on-chain financial products

4. Integration with AI: DePIN provides data and computing power for AI, and AI optimizes the DePIN network.

Challenges Facing DePIN

1. The technical implementation is complex, requiring high standards for hardware and developers.

2. The market acceptance needs to be improved.

3. Uncertainty of Profit Model

4. Regulatory Policy Risk

Key Factors for Evaluating DePIN Projects

1. Hardware Strategy: In-house vs Third-party, One-time vs Ongoing Costs, High Density vs Low Density, etc.

2. Token Economics Design: BME vs SFA, Staking Mechanism, Governance Functions, etc.

Summary

DePIN is reshaping resource allocation models through Web3 and token economics, showing great potential. However, it still faces challenges such as technology, market, and regulation. DePIN needs time to accumulate and opportunities to explode, and its future development is worth looking forward to.