The Rising Narrative: Exploring the Current State and Future of DePIN

Introduction

The internet, as a symbol of globalization, actually originated during the peak of the Cold War. In 1969, the U.S. military created a decentralized network prototype called "ARPANET" to counter potential nuclear strikes. However, over the past 55 years, the development of the internet from Web1 to Web2 has formed a centralized architecture, which is contrary to its original intention. The giants of Web2 control the discourse and value distribution in the online world.

In recent years, the wave of Web3 has risen, upholding the banner of decentralization and de-platformization. However, merely achieving decentralization at the application layer is insufficient to address fundamental issues; the key lies in thoroughly transforming the underlying technology stack.

In this context, DePIN provides a 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 endow the network with programmable capabilities, achieving an upgrade of "DePIN+" and constructing a new internet architecture.

At the same time, the explosion of AI in the Web3 field has witnessed the trend of blockchain applications expanding from on-chain to the real world, such as RWA, AI, and DePIN. The narrative of DePIN signifies that the boundaries between physical reality and the blockchain world are gradually blurring. Next, let us explore the current status and future of DePIN together.

Overview of DePIN: Definition and Significance

What is DePIN?

DePIN(Decentralized Physical Infrastructure Network, the 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 linking hardware with blockchain. This community-driven model is more flexible than traditional single-point resource management and has stronger scalability effects and robustness.

A complete DePIN network typically consists of project parties, off-chain physical devices, suppliers, and demanders, with the basic operation model divided into the following steps:

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

• Customized dedicated hardware
• Professional-grade hardware
• Smart Mobile Devices

2. Proof: Data generated by physical devices needs to be uploaded to the blockchain through off-chain infrastructure, recorded on an immutable blockchain ledger, providing stakeholders with transparent and auditable infrastructure operation records. This verification method is called Physical Proof of Work ( PoPW ).

3. Identity Verification: After the data has been verified, it is necessary to check the on-chain account address of the device owner. Typically, public and private keys are used for identity verification, with the private key being used to generate and sign physical work proofs, while the public key is used to verify the proof or serve as an identity tag for the hardware device.

4. Reward Distribution: After verifying the data, the token rewards obtained from off-chain physical devices will be sent to the on-chain address. This involves the token economics of DePIN, which mainly has two models:

• BME: Token burning mechanism, demand determines the degree of deflation
• SFA: Requires the supplier to pledge tokens, which determines the degree of deflation.

5. Demand Matching: The DePIN market platform provides resource exchange and matching between supply and demand parties, and offers real-time market data to ensure fair pricing. Typically managed by a DAO, it allows stakeholders to participate in decision-making.

Why is DePIN needed?

The significance of DePIN lies in addressing the following dilemmas faced by traditional physical infrastructure networks:

• Centralized control: Vulnerable to attacks, low transparency, users have no control.
• High entry barriers: restrict market competition and innovation
• Resource Waste: Low Resource Utilization Rate
• Insufficient incentive mechanism: low user participation

The core value of DePIN can be summarized as:

• Resource sharing and digitization: converting idle physical resources into tradable digital assets
• Decentralized Governance: Based on open protocols and cryptoeconomic models, transparent and fair incentives.
• On-chain settlement: reduce fees
• Innovation: An open, permissionless global system with high experimentation speed.

Current Status of DePIN Development

• Track: Expanding from early storage and communication to areas such as computing power, data, wireless, sensors, and energy. AI has become the new keyword.

• Market Size: There are 1561 projects that have been launched, with a total market value of approximately 22 billion USD. It is expected that the market size may exceed 35 trillion USD by 2028.

• Public chain distribution: Mainly concentrated on public chains like Solana, IoTex, Peaq, with Polygon and Arbitrum emerging later.

• Development direction: first, focus on the DePIN middle layer; second, focus on expanding the demand side.

DePIN Middleware

The DePIN middleware aims to connect devices and the DePIN network, providing project parties with tools and services for quickly launching DePIN applications, mainly including:

DePIN infrastructure

• DePHY: Provides open-source hardware solutions, SDKs, and tools
• W3bStream: IoTeX's off-chain computing protocol, supporting the generation of logic based on smart device data.

Liquidity Plan

• PINGPONG: DePIN Liquidity and Service Aggregator
• Parasail: A re-staking protocol specifically designed for DePIN services.

DePIN Application Layer

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

Cloud Network

1. Storage

• Filecoin: Decentralized storage based on IPFS technology
• Arweave: provides permanent storage solutions

2. Computing Power

• Render Network: Provides decentralized GPU rendering services
• io.net: Not only a computing power resource matching platform, but also provides a complete set of distributed GPU collaborative architecture.
• PinGo: AI and DePIN projects on the TON network, addressing the issue of idle computing power resources.

Wireless Network

• 5G: Like Pollen Mobile, building a distributed 5G network
• WiFi: such as Wicrypt, Metablox(Roam), Wifi Dabba, etc.
• LoRaWAN: like Helium, provides low-cost communication services for IoT devices
• Bluetooth: Enables short-range data transmission

sensor

• Environment: Such as WiHi, providing a weather forecast data sharing platform
• Geography: Like HiveMapper, it collects high-resolution map data through onboard cameras.

Energy

• Starpower: Create a decentralized virtual power plant (VPP)
• Powerpod: Create a decentralized community charging station network
• Arkreen: Building a Renewable Energy Data Sharing Platform

Future Trends of DePIN

• Combined with Web2 application scenarios: expanded to fields such as the Internet of Things, smart cities, energy sharing, etc.
• Lower hardware barriers: Transition to consumer-level products such as smartphones, watches, rings, etc.
• Financialization: securitization of hardware assets, tokenization of data assets, etc.
• Mutual support with AI: DePIN provides computing power, data, and other resources for AI, while AI optimizes the efficiency of the DePIN network.

Challenges Facing DePIN

• Technical Complexity: Requires integration of different types of hardware and protocols
• Unclear market acceptance: how to persuade users to switch to the DePIN network
• Uncertain profit model: Can the token economy be sustainable in the long term?
• Regulatory policy risk: may face legal and policy interventions

Evaluation Factors for DePIN Projects

1. Hardware

• Self-made vs Third-party
• One-time vs Ongoing Costs
• High Density vs Low Density
• Scarce vs Common

2. Token Economic Design

• BME vs SFA
• Token Empowerment: Governance, Staking, Liquidity, and other mechanisms

Summary

DePIN reshapes production relations through Web3 and token economy, unleashing productivity, integrating global idle resources, and improving resource allocation efficiency. Despite facing challenges such as technology, market, and regulation, DePIN is expected to achieve large-scale application in the future, becoming a key force in reshaping internet infrastructure as blockchain performance improves and token economic models mature.