DePIN: An Indispensable Infrastructure for Web3

Decentralized Physical Infrastructure Network (DePIN) is an innovative model for the deployment and maintenance of infrastructure. It is built in a distributed manner by individuals and businesses from around the world for public use. In return, contributors to these infrastructure nodes can receive economic compensation and token incentives. DePIN achieves a more efficient, decentralized, and fair method of infrastructure deployment by combining cryptographic technology, the internet, the Internet of Things, and blockchain.

The Importance of DePIN to Web3

Although Web3 has developed a rich application scenario on Layer1 and Layer2, such as DeFi, gaming, NFTs, social networking, and tokenization of physical assets, these applications still rely on centralized cloud services and data centers as internet infrastructure. This dependence has led to some issues:

1. A cloud platform outage may lead to data loss for Web3 projects.
2. Regulatory sanctions may limit centralized service providers from offering services for certain Web3 projects.
3. Even access to the code repository and official website may be restricted.

Therefore, DePIN has become an indispensable infrastructure for realizing a truly meaningful Web3. Although DePIN projects may not occupy a major market share and may not have performance advantages, their existence ensures the normal operation of Web3 and cryptocurrency projects, enhancing their robustness.

Advantages of DePIN

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

1. Low participation cost: Utilize the collective resources of network participants to reduce management fees and expenses.
2. Network robustness: Provide a more resilient and secure infrastructure that is less susceptible to single points of failure.
3. Open competition and innovation: Eliminating the high capital and large-scale entry barriers of traditional infrastructure networks facilitates the entry of small-scale new participants.

Characteristics and Classification of DePIN

The industrial logic of DePIN includes three key roles:

1. Device Provider: Provides physical device resources and receives token rewards.
2. DePIN Protocol: Build a distributed network and design a token incentive mechanism.
3. DePIN Network Users: Access the protocol, use the services, and make payments.

The DePIN projects can be divided into the following categories: decentralized storage, decentralized computing, CDN, VPN, WiFi, 5G networks, etc.

Most DePIN projects have three basic components:

1. Physical infrastructure: Build and maintain a distributed physical infrastructure network
2. Off-chain computing infrastructure: capturing and analyzing real-world data to calculate user contributions.
3. Blockchain and Tokens: As a tamper-proof ledger, device registry, task statistics, and scheduling platform

DePIN Project Case

Filecoin: Decentralized Storage Network

Filecoin is the world's largest distributed storage network, with over 3,800 storage providers offering more than 17M TB of storage capacity. It is committed to introducing open, publicly verifiable features into the three core pillars of the data economy: storage, computation, and content distribution.

Render Network: Decentralized GPU rendering platform

Render Network is a decentralized GPU rendering platform that connects users who need to execute rendering tasks with users who have idle GPUs, primarily serving the distributed GPU computing needs of the 3D rendering and AI industries.

Helium: Decentralized Wireless Network Protocol

Helium is an open-source protocol that incentivizes global users to collaboratively build a wireless network. It includes two main application cases: IoT networks and 5G networks. According to reports, Helium has deployed nearly 1 million hotspots in over 77,000 towns across 192 countries.

Livepeer: Decentralized live video broadcasting platform

Livepeer is a video infrastructure network for live and on-demand streaming, incentivizing nodes to contribute GPU and bandwidth to real-time video encoding and distribution services through a cryptoeconomic protocol.

Theta: Decentralized Video Streaming Network

Theta is a decentralized video streaming platform based on blockchain technology that incentivizes individual users to share excess computing power and bandwidth resources through tokens, serving as caching or relay nodes for video streams, thereby improving video stream quality and reducing video distribution costs.

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 research, the total potential market size of the DePIN industry is approximately $2.2 trillion, and it could reach about $3.5 trillion by 2028. Currently, the fully diluted valuation of all decentralized physical infrastructure projects is only $5 billion, indicating enormous growth potential.