The Rising Narrative: A Glimpse into the Present and Future of DePIN

Introduction

The Internet, as a symbol of globalization, is actually a product of the peak of the Cold War. In 1969, the U.S. military, in the era of "nuclear deterrence," hoped to establish a network that could avoid centralized single points of failure and could autonomously recover in the event of a nuclear strike. Thus, the prototype of the Internet, "ARPAnet" (, was born with the philosophy of "decentralization" and a fully distributed architecture of "end-to-end direct connections."

However, over the past 55 years, from Web1 to Web2, the rapid expansion of the golden age of the internet has instead spawned a "terminal connecting to servers" centralized architecture that contradicts the original intention in the wave of commercialization and globalization. In the fragmented platform system, Web2 giants dominate the territory, holding absolute decision-making power in the online world and possessing significant influence and value distribution rights.

In recent years, the Web3 wave, which advocates for decentralization and de-platforming, has been gaining momentum. Simply applying decentralization is insufficient to address fundamental contradictions; issues such as efficiency bottlenecks and security risks still exist. The fundamental solution lies in fundamentally transforming the underlying technology stack of the internet to disrupt the efficiency and security problems caused by the excessive centralization of Web2.

In this context, DePIN may offer a new perspective worth paying attention to: 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 endow the network with programmable capabilities, helping to realize the upgrade of "DePIN+" and construct a new internet architecture.

At the same time, the explosion of AI in Web3 not only injects new vitality into it but also proves that blockchain applications are expanding from on-chain activities to the real world, such as RWA, AI, and DePIN. The rise of DePIN means that the boundaries between physical reality and the ever-expanding blockchain world are gradually blurring. Next, let's explore the current state and future of DePIN together.

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DePIN Overview: Definition and Significance

) What is DePIN?

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 creates a "resource sharing + economic incentive" bilateral market by combining hardware and blockchain. This community-driven model is more flexible than traditional single-point resource management and also has greater scalability and robustness.

Typically, a complete DePIN network consists of project parties, off-chain physical devices, suppliers, and demanders, with a basic operating mode that includes five steps:

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

• Customized dedicated hardware: For example, Helium requires users to purchase third-party manufactured Helium hardware hotspots to provide signals for nearby IoT devices to earn mining rewards; Hivemapper encourages users to contribute to the mapping network through dedicated dash cams.

• Professional-grade hardware: Idle computers equipped with GPU and CPU chips can participate in computing power/data supply simply by downloading a browser plugin. For example, with Heurist, idle GPU device owners only need to download the miner program and set up a node to earn rewards by sharing computing power. The access threshold for devices on io.net is clearly defined as the NVIDIA GeForce RTX 3050.

• Smart mobile devices: lightweight mobile devices such as smartphones, smartwatches, wristbands, and even rings can join the DePIN network in two ways: by running node programs to become the control end of DePIN hardware; or by directly providing sensor data or computational resources. For example, Silencio uses the built-in microphone of smartphones to create a dynamic map of global noise pollution; Acurast utilizes idle smartphone storage space to build a decentralized cloud.

2. Proof: Data generated by physical devices needs to be uploaded to the blockchain through off-chain infrastructure, recorded on a tamper-proof blockchain ledger, providing stakeholders with transparent and auditable infrastructure operation records, proving that they have worked as required to obtain incentives. This verification method is called Proof of Physical Work ) PoPW (.

3. Identity Verification: After data validation, it is necessary to verify the on-chain account address of the device owner, typically using public and private keys for identity verification. The private key is used to generate and sign the physical work proof, while the public key is used to verify the proof or as the identity identifier for the hardware device )Device ID(.

4. Reward Distribution: After verifying the data, the token rewards obtained from off-chain physical devices will be distributed to the corresponding on-chain addresses, involving the token economics of DePIN. Token economics, as the economic foundation of the data value network, is key to whether the DePIN project can operate well.

• BME: Token burn mechanism, where users on the demand side destroy tokens after purchasing services, with the level of deflation determined by demand; the stronger the demand, the higher the value of the tokens.

• SFA: Requires supply-side users to stake tokens to become qualified miners; the supply determines the degree of deflation, meaning the more miners providing services, the higher the token value.

5. Demand Matching: On the DePIN market platform, both buyers and sellers can purchase, sell, and lease, completing resource exchange and matching; at the same time, it provides real-time market data, including asset prices, historical performance, and energy production data, which helps ensure fair pricing and is typically managed by the decentralized autonomous organization )DAO(, allowing stakeholders to participate in the decision-making process.

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) Why is DePIN needed?

Take a simple example. Noise pollution is a common phenomenon in urban life, and quantifying noise pollution data not only has commercial value for real estate developers, hotels, restaurants, and other businesses, but also has reference significance for urban planning and academic research. But would you be willing to let a private company install microphones all over the city? Or imagine the initial costs of doing so, how far could its coverage expand? How fast is the expansion rate?

If users voluntarily form a noise detection network, everything becomes much simpler. For example, Silencio deploys noise pollution sensors on users' phones through its application, allowing mobile users to establish a global measurement network by providing accurate and hyper-local noise pollution data, while earning token rewards. At the same time, the platform profits by selling noise pollution data.

This is one of the meanings of DePIN. In traditional physical infrastructure networks like communication networks, cloud services, energy networks, etc., due to the huge capital investment and operational maintenance costs, the market is often dominated by large companies or giants. This centralized industrial characteristic has brought about several major dilemmas and challenges:

• Centralized Control: Controlled by centralized institutions, with a risk of single point failure, vulnerable to attacks, and low transparency, users have no control over data and operations.

• High entry barriers: New entrants must overcome substantial capital investments and complex regulatory hurdles, which limit market competition and innovation.

• Resource waste: Due to centralized management, there are occurrences of idle or wasted resources, resulting in low resource utilization.

• Insufficient incentive mechanism: There is a lack of effective incentive mechanisms, resulting in low enthusiasm among users to participate and contribute network resources.

The core values of DePIN can be summarized in the following four points:

• Resource Sharing and Digitalization: Transforming idle physical resources ### such as storage, communication, and computing power ( into tradable digital assets in a decentralized manner;

• Decentralized Governance: Based on open protocols and cryptoeconomic models, users contribute capital, assets, and labor towards a common goal, and are incentivized in a transparent and fair manner;

• On-chain settlement: Blockchain becomes the single source of a shared ledger for all market participants, reducing costs;

• Innovation: In an open, permissionless global system, the speed of experimentation is an order of magnitude higher than centralized infrastructure.

Current Development Status of DePIN

) track

As an early-developed field in blockchain, DePIN has a long history, with the first batch of projects, such as the decentralized network Helium, and decentralized storage solutions like Storj and Sia, basically focusing on storage and communication technologies.

With the continuous development of the Internet and the Internet of Things, the demand for infrastructure and innovation is increasing. The DePIN project mainly expands into computing power, data collection and sharing, wireless, sensors, energy, etc. However, looking at the top 10 projects by market capitalization in the DePIN field, most of them belong to the storage and computing power sectors.

AI is the keyword for DePIN in this cycle. Due to the natural suitability of DePIN for the decentralized sharing needs of AI data and computing power, a batch of AI DePIN projects has emerged, dedicated to integrating resources such as computing, storage, networking, and energy on a global scale, providing underlying infrastructure support for the training, inference, and deployment of AI models.

( market size

According to data from DePIN Ninja, the number of launched DePIN projects has reached 1,561, with a total market value of approximately $22 billion; regarding the total potential market size of the DePIN sector, Messari predicts that by 2028, the DePIN market size may exceed $35 trillion, and it could contribute an additional $10 trillion to the global GDP over the next decade, reaching $100 trillion ten years later.

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L1/L2

Due to high throughput and low gas fees, current DePIN projects are mainly concentrated on deploying on the Solana public chain, as well as DePIN-specific chains like IoTex and Peaq. At the same time, Polygon and Arbitrum are gradually becoming rising stars.

As the hardware supply chain has become very mature, project parties do not need to invest a lot of research and development effort. Therefore, based on the focus direction, current DePIN projects are divided into two routes: one focuses on the middle layer of DePIN; the other focuses on expanding the demand side of DePIN.

DePIN Middle Layer

DePIN-related IoT devices face technical challenges and liquidity pressures when integrating into the blockchain on a large scale, such as hardware design and production, how off-chain data can be reliably transmitted and processed on-chain, and tokenomics design. Consequently, the DePIN track has derived middleware that connects devices and the DePIN network, involving the connection and bidirectional service components, aimed at helping project parties quickly launch DePIN application projects by providing development frameworks, developer tools, overall solutions, and more.

It includes not only developer-friendly tools and one-stop services like DePHY and Swan; it also has the re-staking protocol Parasail specifically serving DePIN, aimed at enhancing the liquidity and value utilization of the native tokens in the DePIN network.

( DePIN infra

• DePHY: Aims to provide open-source hardware solutions, SDKs, and tools for DePIN projects, and reduce the manufacturing and network messaging costs of bridging hardware products to the blockchain through 500ms-level off-chain network nodes running in sync with the blockchain.

• W3bStream: Off-chain Computing Protocol W3bstream allows IoTeX DePIN projects to easily generate logic based on smart device data, triggering blockchain operations. Some well-known IoTeX-based DePIN projects include Envirobloq, Drop Wireless, and HealthBlocks.

Currently, as the number of DePIN projects providing frameworks and solutions increases, DePIN application layer projects built on its infra are also gradually emerging, such as EnviroBLOQ based on IoTeX's Pebble, Dimo and Drife based on W3bstream, and Starpower and Apus Network based on DePHY.

) Liquidity Plan

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

• Parasail is a re-staking protocol specifically designed for DePIN services, activating mature networks.