The rising narrative, peering into the present and future of DePIN

Introduction

Today, the Internet, which is a symbol of globalization, is actually a product of the peak of the Cold War.

In 1969, the US military, in the era of nuclear deterrence, hoped to have a network that could avoid centralized single point of failure and recover autonomously in the event of a nuclear strike. Therefore, the prototype of the Internet, ARPAnet, was born with the original intention of decentralization, adopting a fully distributed architecture of ‘terminal-to-terminal’ direct connection.

Over the past 55 years, from Web1 to Web2, with the rapid expansion of the Internet golden age, it has instead given rise to a centralized architecture of ‘terminal-link servers’ in the wave of commercialization and globalization, which is increasingly contrary to the original intention - In the platform system of segmenting blocks, Web2 giants dominate and control the absolute discretion, as well as the distribution of influence and value.

Therefore, in recent years, the wave of Web3, which advocates decentralization and de-platforming, has been thriving. Purely applying decentralization alone cannot solve the fundamental contradictions, and issues such as efficiency bottlenecks and security risks still exist. How to thoroughly transform the underlying technology stack of the Internet and overturn the efficiency and security problems caused by the excessive centralization of Web2 is the key to resolving the current dilemma.

In this context, DePIN may offer an interesting new solution: 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 enable the network to have programmability, helping to achieve the elevation of “DePIN+” and build a completely different species from traditional Internet architecture.

At the same time, AI is on fire in Web3, injecting new vitality into it, and witnessing a fact that blockchain applications are gradually expanding from on-chain activities to the real world, such as RWA, AI, DePIN.

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

Part.1, DePIN Overview: What & Why

What is DePIN?

The concept of DePIN has been talked about for a long time, but it is still necessary to reiterate from the perspective of sorting. Here, we will focus on the basic operation mode of DePIN. In terms of definition, DePIN (Decentralized Physical Infrastructure Network) is 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 links hardware and blockchain to create a ‘resource sharing + economic incentive’ bilateral market, **this community-driven model is more flexible and scalable than traditional single-point resource management, and more robust.

Generally speaking, a complete DePIN network consists of project parties, off-chain physical devices, suppliers, and demanders, and the basic operation mode is divided into five steps:

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

• Customized Dedicated Hardware: For example, Helium requires users to purchase Helium hotspots from third-party manufacturers to provide hotspot signals for nearby IoT devices and obtain mining rewards; Hivemapper encourages users to contribute to the map network through its dedicated dashcam (HiveMapper Dashcam).
• Professional-grade hardware: Equipped with GPU, CPU chips, idle computers, simply download the browser plug-in to start providing computing power/data. For example, Heurist, for owners of idle GPU devices, simply download its mining program and set up mining nodes to start obtaining mining rewards by sharing their computing power. In the participation method of io.net, it is explicitly stated that the initial threshold for device networking is NVIDIA GeForce RTX 3050.
• Smart mobile devices: These include smartphones, smartwatches, fitness trackers, and even smart rings. They can join the DePIN network in two ways: by running node programs and becoming the control terminal for DePIN hardware, or by directly providing sensor data or computational resources. For example, Silencio utilizes the built-in microphones of people’s smartphones to create dynamic maps of noise pollution around the world, while Acurast utilizes the storage space of old phones to create a decentralized cloud that anyone can contribute to.

2. Proof: The data generated by physical devices needs to be uploaded to the tamper-proof blockchain ledger through off-chain infrastructure, providing transparent and auditable infrastructure operation records for stakeholders to prove that they have made certain efforts to obtain incentives. This verification method is called Proof of Physical Work (PoPW).

3. Identity Verification: After the data is verified, it is necessary to check the on-chain account address of the device owner. Generally, public and private keys are used for identity verification. The private key is used to generate and sign the physical work proof, while the public key is used by the outside world to verify the proof or serve 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 corresponding on-chain address, which involves the token economics of DePIN. As the economic foundation of the data value network, the token economics is the key to the successful operation of the DePIN project.

• BME: Token burning mechanism, the tokens will be destroyed by users on the demand side after purchasing the service, and the degree of deflation is determined by the demand; that is to say, the higher the demand, the higher the value of the token.
• SFA: Requires users on the supply side to pledge tokens to become qualified miners. The supply determines the degree of deflation, that is, the more miners providing services, the higher the value of the tokens.

5. Demand Matching: A DePIN marketplace platform where buyers and sellers can purchase, sell, and lease, completing the exchange and matching of resources. At the same time, the DePIN marketplace 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.

Image source: FMG

Why do we need DePIN?

For example, noise pollution is a common phenomenon in urban life. The quantification of noise pollution data is not only of commercial value to real estate developers, hotels, restaurants, etc., but also has reference significance for urban planning and academic research. Would you be willing to let a private company install microphones everywhere in your city? Or imagine the upfront cost of doing so, how far could its coverage expand? How fast could the expansion speed be?

And if this is a user-initiated noise detection network, all of this is much simpler. For example, Silencio, through its application downloaded on users’ mobile phones, deploys noise pollution sensors, and mobile users establish a global measurement network by providing accurate, super-local noise pollution data, and obtain token rewards. At the same time, the platform profits from selling noise pollution data.

This is one of the meanings of DePIN. In traditional physical infrastructure networks such as communication networks, cloud services, and energy networks, the market is often dominated by large or giant companies due to the huge capital investment and operating costs. The centralization of the industry brings several major dilemmas and challenges:

• Centralized Control: Controlled by centralized institutions, there is a risk of single point of failure, vulnerability to attacks, and low transparency. Users do not have control over data and operations.
• High entry barriers: New entrants need to overcome high capital investment and complex regulatory barriers, which restrict market competition and innovation.
• Waste of resources: Due to centralized management, there is a phenomenon of idle or wasted resources, with low resource utilization.
• Lack of incentive mechanism: There is a lack of effective incentive mechanism, and users’ enthusiasm to participate and contribute network resources is not high.

The core value of DePIN can be summarized in 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 cryptographic economic models, users contribute capital, assets, and labor to the same goal and are incentivized with transparency and fairness;
• On-chain Settlement: The blockchain reduces costs by becoming the single source of shared ledger for all market participants;
• Innovation: In the open, permissionless global DeFi system, the speed of experimentation is an order of magnitude higher than that of centralized infrastructure.

DePIN Development Status

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

Image source: Messari

However, with the continuous development of the Internet and the Internet of Things, there are increasing requirements and innovation needs for infrastructure. The DePIN project mainly expands to areas such as computing power, data collection and sharing, wireless, sensors, and energy, etc. However, looking at the top 10 projects in terms of market value in the DePIN field, most of them belong to the storage and computing power field.

AI is the key term for DePIN in this cycle. Due to DePIN’s natural suitability for decentralized sharing of AI data and computing power, a batch of AI DePIN projects have emerged, dedicated to integrating global resources such as computing, storage, network, and energy to provide underlying infrastructure support for AI model training, inference, and deployment.

Image source: CoinMarketCap

Market Size: According to DePIN Ninja’s data, the number of DePIN projects currently launched has reached 1561, with a total market value of approximately 22 billion US dollars. Messari has made predictions for the total potential market size of the DePIN sector: by 2028, the DePIN market size may exceed 35 trillion US dollars and may contribute an additional 10 trillion US dollars to global GDP in the next ten years (reaching 100 trillion US dollars in ten years).

L1/L2: Due to high throughput and low gas fees, the current DePIN projects are mainly deployed on the Solana public chain, as well as dedicated chains like IoTex and Peaq. Meanwhile, Polygon and Arbitrum are gradually emerging as newcomers.

Image source: Cryptoresearch

Since the hardware supply chain is already very mature, the project team does not need to invest a lot of R&D effort, so 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 Middleware

The DePIN-related IoT devices need to be massively connected to the blockchain, 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 economic design. Therefore, the DePIN track has spawned middleware that connects devices and the DePIN network, involving parts of connection and bidirectional services, aiming to help project parties quickly launch DePIN application projects and provide them with development frameworks, developer tools, overall solutions, and more.

It not only includes developer-friendly tools and one-stop services like DePHY and Swan, but also a re-staking protocol Parasail specifically designed for DePIN, aiming to enhance the native token liquidity and value utilization of the DePIN network.

DePIN infra

• DePHY: Aiming 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 through 500 ms-level off-chain network nodes running synchronously with the blockchain.
• W 3 bStream : The off-chain computing protocol W 3 bstream allows the IoTeX DePIN project to easily generate logic based on smart device data and trigger blockchain operations. Some well-known IoTeX-based DePIN projects include Envirobloq, Drop Wireless, and HealthBlocks.

Currently, with the increasing number of DePIN projects that provide frameworks and solutions, application layer projects based on its infra are also gradually emerging, such as IoTeX’s Pebble’s EnviroBLOQ, W3bstream’s Dimo and Drife, DePHY’s Starpower, Apus Network, and so on.

Liquidity Solution

• PINGPONG is a DePIN liquidity and service aggregator that optimizes and maximizes mining revenue from multiple networks through innovative tools and solutions.
• Parasail is a re-staking protocol dedicated to DePIN, which provides economic guarantees for the DePIN service by activating idle assets in a mature network (such as staked or re-staked tokens), helping DePIN attract more users and service providers.

Using Parasail as a detailed example, currently Parasail mainly provides repledging services on the Filecoin chain, and will open up repledging on chains such as Iotex, Arbitrum, and Ethereum in the future. Taking FIL as an example, Parasail works as follows:

• Staking FIL Tokenization: Storage providers can stake FIL and mint pFIL tokens at a 1:1 ratio.
• Open Market for pFIL: Storage providers can sell pFIL for liquidity, while token holders can buy pFIL to receive FIL mining rewards.
• Risk Recovery and Reward Allocation: When the staked FIL is released or miners receive block rewards, the Repl protocol recovers FIL and repurchases pFIL through auctions, with excess income being used for reward allocation.

Part.3, DePIN application layer

The application layer occupies the majority of the DePIN track count. Based on public research reports and the DePIN browser project, this article is mainly divided into four major sectors: cloud network (storage, computing), wireless network (5G, WiFi, Bluetooth, LoRaWAN), sensors (environmental, geographical, health), and energy.

Cloud Network

DePIN’s domain in the cloud network includes decentralized storage and computing.

▼ Storage

Decentralized storage is a key component of the DePIN ecosystem, aimed at addressing the high cost, privacy risks, and lack of anti-censorship capabilities of traditional centralized storage.

• As one of the most well-known DePIN projects, Filecoin, based on IPFS technology (IPFS itself is already a widely recognized distributed file system), uses storage proof mechanism to ensure data integrity and authenticity. Miners contribute storage space to receive FIL rewards, and users pay for storing data on demand. This model not only reduces storage costs, but also activates a large number of idle hard disk resources worldwide;
• Arweave provides a permanent storage solution, where users only need to pay once, which is very suitable for data that needs to be kept for a long time, such as historical archives, NFT metadata, or blockchain transaction records;

Overall, compared to traditional cloud storage, decentralized storage clearly has a greater advantage in terms of censorship resistance and transparency. However, storage speed and initial access thresholds may still need to be optimized.

▼ Hashrate

As the core productive resource of the current AI wave, computing power is undergoing a revolution. DePIN, a decentralized computing power project, is not a direct replacement for the existing centralized cloud computing services dominated by cloud giants, but rather a complementary solution. Cloud giants with massive computing resources are responsible for heavy and urgent demands such as large-scale model training and high-performance computing, while the decentralized cloud computing market caters to more diverse and cost-effective demands, including small and medium-sized model computations, fine-tuning of large models, and deployment of inferences.

Actually, it provides a more inclusive dynamic balance between cost-effectiveness and computing power quality supply-demand curve, which is more in line with the economic logic of market optimization of resource allocation. Render Network, Akash Network and other veteran decentralized computing projects, as well as this year’s latest DeAI fusion narrative giant io.net, represent this trend.

• Render Network: Provides decentralized GPU rendering services, which can provide flexible and cost-effective computing power support for applications that require real-time calculations, such as virtual reality, 3D rendering, and industrial automation, especially in the fields of metaverse and real-time interaction;
• io.net: Going further than just being a matching platform for computing resources, it also achieves efficient collaboration of distributed GPUs through a complete set of product architecture.
• 「IO Cloud」：Supports users to create GPU clusters according to their needs, for tasks such as AI model training;
• ‘IO Worker’: Provides management tools for computing power providers, including temperature monitoring, computing power utilization analysis, etc;
• ‘IO Explorer’: Provides visualized network statistics and reward data, making it convenient for users to track the dynamic flow of computing power resources;
• PinGo is an AI and DePIN project on the TON network, which aims to solve the problem of fragmented and idle computing power resources and provide a computational basis for building AI models. PinGo was originally owned by Cpin Web2 company and has nearly 100,000 devices. In the future, these devices will be integrated into its own DePIN network.

However, decentralizing computing power to mobilize idle computing power is not easy. Stability is the key for large-scale model training, and the cost of interruption is too high. Due to the complexity of computing power delivery technology, the bilateral scheduling model, like Uber and Airbnb, fails here. In addition, Nvidia’s CUDA software environment and NVLINK multi-card communication result in extremely high replacement costs. NVLINK requires the graphics cards to be concentrated in the same data center due to its limitations on physical distance between the cards.

In this context, the business model of decentralized computing power supply is difficult to achieve and has become a mere narrative. Many computing power projects are forced to abandon the training market and turn to serve the inference market. However, in the absence of a large-scale outbreak of applications, the demand for inference is insufficient. Large enterprises meet the demand for inference through self-construction, which appears more stable and cost-effective.

Wireless Network

Dewi (Decentralized Wireless) is a crucial part of the DePIN track, which allows many independent entities or individuals to collaborate and establish token-incentivized wireless infrastructure, providing services for the Internet of Things and mobile communication. The shared wireless networks include:

• Hive 5G: Provides high download speeds and low latency, such as Pollen Mobile, which utilizes decentralized base stations to build a distributed 5G network, with the goal of reducing mobile communication costs and improving coverage;
• WiFi : Provides network connection in specific areas, such as Wicrypt, where users can purchase dedicated devices to contribute WiFi and earn tokens; Metablox (now renamed Roam) is similar to a ‘Web3 version of a universal key’ that allows users to share their self-built global public WiFi network through it; Wifi Dabba mainly cooperates with local priority TV operators in India.
• Low Power Wide Area Network (LoRaWAN): To facilitate IoT communication, the DePIN project Helium is a typical representative, providing low-cost, high-coverage communication services for IoT devices through LoRaWAN routers, replacing the centralized service model of traditional telecom networks. Users are rewarded with HNT by running the router, making this model particularly suitable for scenarios requiring large-scale device coverage such as agricultural IoT, logistics tracking, and environmental monitoring.
• Bluetooth: Implement short-range data transmission.

This network model is suitable for smart cities, agricultural IoT, and other scenarios. However, the advantage of decentralized communication lies in the low-cost substitution of traditional telecommunications infrastructure, but the deployment efficiency and maintenance of physical devices cannot be ignored. Dewi needs to leverage the power of traditional operators’ networks to expand the market, metaphorically like DePIN is a supplement to traditional operators or provide them with corresponding data.

Sensor

Sensor networks are another niche area for DePIN, essentially consisting of interconnected devices, each designed to monitor and collect specific data in its environment, mainly through monitoring and capturing data on the environment, geographic location, health, etc.

• Environment: An obvious use case is weather forecasting, and WiHi wants to be a unified platform that connects all these entities, simplifies data sharing, improves prediction accuracy, and enhances climate monitoring. Any entity that operates a weather sensor can apply to contribute data to WiHi.
• Geography: For example, HiveMapper collects the latest high-resolution data (4K street-level images) by installing in-car cameras with holders (such as taxi drivers and couriers), and maps image drawing collects contributions from its data to obtain token rewards. Demand parties can purchase existing maps or reward new area data for emergencies. Currently, data for insurance assessment and timely access to external conditions of houses, latest road conditions and construction area information for autonomous vehicle developers, and real-world assets (RWA) all have real commercial value.

Energy

The traditional energy market faces the following problems: mismatch between supply and demand in the area energy network, lack of transparent and tradable energy market, large untapped clean energy market, slow and costly expansion of energy network. Through the decentralization of energy networks, DePIN allows users to directly utilize their surplus energy production. This approach not only encourages more prudent energy consumption, but also reduces reliance on traditional energy suppliers. The DePIN method of energy networks can provide a more democratic, efficient, and favorable model for energy production and consumption.

• Starpower: By creating decentralized virtual power plants (VPPs), connecting small power supply networks with the demand side, reducing energy transmission, and improving energy utilization efficiency.
• Powerpod : By creating a decentralized community charging station network, Powerpod is changing the way electric vehicles (EVs) are charged.
• Arkreen : By incentivizing providers to provide the capacity of solar installations and similar data, including pathways for Renewable Energy Certificate (REC) issuers and green computing operators to provide access to data, build applications, and services.

Part 4, How to view the future of DePIN?

DePIN trend

▼ Combined with web2 application scenarios

The potential of DePIN lies not only in its underlying decentralized technology advantages, but also in its extensive application scenarios in the web2 industry. These scenarios span multiple areas such as the Internet of Things (IoT), smart cities, energy sharing, edge computing, etc. Each of these areas represents an important role of DePIN in promoting the convergence of the physical world and the digital network.

You can imagine a future living scenario. On a morning in 2030, Alice activates Helium to provide communication support for pedestrians and devices nearby. While driving to work, she opens DIMO to record her vehicle device data and continuously contributes the latest map data to Hivemapper. Then, she arrives at the office, which is a solar energy company. Alice skillfully installs Arkreen collection devices for various solar energy components, making it convenient for users to record their carbon footprint.

Image source: Waterdrip Capital

▼ Lower Hardware Threshold

Prior to this, the main business of DePIN devices included computing power, storage, and bandwidth. The devices were usually fixed in a certain location. Currently, DePIN is transitioning from professional-grade devices to consumer-level products on the hardware side, such as mobile phones (Solana Mobile Saga), watches (WatchX), AI smart rings (CUDIS), electronic cigarettes (Puffpaw), and so on. The devices are small, flexible, and can be carried with you, or even worn.

As the most popular hardware device, the reduction of hardware threshold is expected to promote further expansion of user base: on the one hand, the sensors and computing modules of encrypted phones are natural acquisition terminals, which can be used as DePIN devices to participate in the DePIN economy, reduce the sales threshold and increase usage frequency; on the other hand, the encrypted application market built into encrypted phones is an excellent user entry point for dAPPs, with a wide variety of markets and extensive application scope, yet to be further explored, presenting a blue ocean with enormous potential.

▼ Financialization

The tokenization of physical hardware also opens up the imaginative space for DePIN to create on-chain finance:

• Staking liquidity pools, increasing sources of income, such as the HONEY-JitoSOL liquidity vault incentive program launched by Hivemapper, further enhancing the incentive effect.
• DePIN hardware asset securitization on-chain, issuing products similar to traditional financial Reits model;
• Based on the tokenization of data assets, data-supported financial products can be created, such as using DIMO’s car data for on-chain car loans.

▼ DePIN and AI mutual support

The features of DePIN are also naturally applicable to the development of AI.

First of all, DePIN can serve AI in multiple aspects such as computing power, models, and data, to unleash capabilities that AI originally does not possess in a decentralized manner. AI is essentially an intelligent system trained on massive data, and the rich edge data collected by IoT devices in DePIN provides extensive training and application scenarios for AI. Currently, many AIPIN projects capture data through hardware sensors and then use AI to optimize data processing capabilities, achieving end-to-end process automation at the application level, unlocking the potential of industry-specific scenarios.

Meanwhile, the addition of AI also makes DePIN smarter and more sustainable. AI can enhance device 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 DePIN’s economic incentive model through algorithms.

DePIN Towards Scalable Constraints

Although the DePIN concept is attractive, the complexity of technology implementation, market acceptance, regulatory policies, and other aspects significantly increases the difficulty of its large-scale landing:

• From storage to computing, from communication to energy, each DePIN solution requires the integration of different types of physical hardware and decentralized protocols, which places extremely high demands on hardware manufacturers, network developers and participating nodes.
• In addition, the degree of market acceptance of the DePIN model is still unclear. In practical applications, how to convince enterprises or individuals to switch to DePIN’s network infrastructure and pay high initial costs is still an unsolved problem;
• The uncertainty of the profit model also limits the attractiveness of DePIN. Many current projects rely on token-based economic incentives to provide resources. However, the long-term sustainability of this model depends on the market’s recognition of the value of tokens and the rate of actual demand growth. The problem is that most projects have outdated narratives and insufficient product experience, making it difficult to compete with Web2. If they solely rely on token incentives to attract users, they may fall into a “death spiral” once the incentive model collapses. The stability of the economic system is crucial due to its reliance on both hardware sales revenue and token models. 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 result in user loss or even network paralysis.
• Due to the involvement of storage, computing, and communication in DePIN, its potential influence may trigger national or regional legal and policy interventions, such as the use of decentralized storage networks for storing sensitive or illegal content, which may lead regulatory authorities in certain countries to exert pressure on the entire network, requiring stricter content review mechanisms (previously, there have been cases of storing politically sensitive information through decentralized storage projects);

Overall, from the complexity of the technology to the acceptance in the market, and the uncertainty of regulation, each step is crucial to determine whether it can truly become the new benchmark for infrastructure. How to break through this pattern and make users truly feel the economy and unique value of DePIN is the competitive pressure it must face.

Part 5, Factors to Consider for a DePIN Potential Project

▼ Hardware

• Self-made VS Third-party: Currently, most DePIN projects use third-party hardware production. The advantage is that it guarantees professionalism, but the concern is that its expansion may be affected by its third-party supply chain. In contrast, projects with strong hardware supply chain capabilities can achieve rapid business growth in the first curve stage through device sales and agency models.
• One-time Cost vs. Ongoing Cost: Some DePIN networks have one-time costs, such as Helium. After purchasing their hardware devices and setting up hotspots, users do not need to do much additional work to provide passive coverage to the network. Others require ongoing user participation. If contributors pay a one-time cost (time or money) at the beginning instead of continuous costs, the expansion of DePIN networks will be easier. 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 consideration for the DePIN project, such as XNET building a carrier-grade CBRS wireless network. Their network radios need to be installed by professionals from local ISPs, which makes it difficult to achieve high density deployment. However, due to their more professional equipment, their network still has expansion potential. High density networks require more contributors to reach the threshold scale. Conversely, low density networks can leverage more complex hardware and/or professional contributors.
• Scarcity VS Common: For example, XNET is building an enterprise-grade CBRS wireless network. Their network radios need to be installed by professionals from local ISPs, which is difficult to install and not conducive to dense deployment. However, due to the more professional equipment and scarcer resources, their network still has expansion potential.

▼ Tokenomics Design

Token economics, as the economic foundation of the data value network, is the key to the successful operation of the DePIN project. Currently, the two mainstream approaches 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 perfects the token economy, such as:

• Use points as a pre-mining commitment to miners, and exchange them at a certain ratio after the token is issued, or adopt a points+token economic model.
• Endowing tokens with governance functions allows holders to participate in major network decisions, such as network upgrades, fee structures, or reallocation of funds.
• The staking mechanism incentivizes users to lock tokens and maintain token price stability;
• The project party can also use part of the income to purchase tokens and join the liquidity pool with other major cryptocurrencies or stablecoins, ensuring that the token has sufficient liquidity and facilitating user transactions without significantly affecting the price.

These mechanisms help ensure the long-term alignment of interests between users on both the supply and demand sides and project parties, thereby achieving the long-term success of the project.

Summary

Focusing on a macro perspective, we will find that Web3, as a value network, has the huge potential to reshape production relations and unleash productivity. The core logic of DePIN is to build a distributed bilateral market by adopting the ‘Web3+token economy’ infrastructure. From this perspective, whether it is storage, computing power, data, or communication networks, it is possible to rejuvenate with new vitality through DePIN’s new model.

By integrating idle global resources (such as storage, computing power, communication equipment, etc.), it solves the problems of resource monopoly and inefficient distribution in traditional centralized models. This model effectively connects global hardware resources with user needs, reducing the cost of resource acquisition and improving the resilience and risk resistance of infrastructure, laying the foundation for the popularization and application of decentralized networks.

However, although DePIN has shown great potential for development, it still faces challenges in technical maturity, service stability, market acceptance, and regulatory environment. Today, the performance of blockchain, the richness and maturity of token economic models, and market cycles have prepared for the outbreak of DePIN, but the lack of a large-scale application still lacks opportunities. “Bend down and wait for the right time, do not contend with fate,” DePIN relies on the flywheel effect, needs broad vision and appropriate actions, and will never become a silent narrative.

Reference

State of depin 2023

FMG Deep Research Report: 5 Opportunities from Bottom to Top in the DePIN Track

Archaeology DePIN, looking for the ‘orthodoxy’ of the track

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