Decentralization Physical Infrastructure Network ( DePIN ) Current Status and Future Prospects

Introduction

The birth of the Internet originated from the U.S. military's need to counter nuclear strikes during the Cold War. In 1969, ARPANET was created to build a decentralized and self-recovering network. However, over the past 55 years, the development of the Internet has gradually deviated from its original intention, forming a platform system centered around Web2 giants.

In recent years, the wave of Web3 has emerged, attempting to reshape the vision of a decentralized internet. The DePIN( decentralized physical infrastructure network) provides a new idea for this: to build an efficient P2P physical resource network through the financial attributes and incentive mechanisms of Web3, create a decentralized physical network infrastructure, and endow the network with programmability.

At the same time, the explosion of AI in the Web3 field has witnessed the expansion of blockchain applications from on-chain to the real world. The rise of DePIN is a manifestation of the integration of physical reality and the blockchain world.

DePIN Overview

What is DePIN?

DePIN( Decentralization Physical Infrastructure Network) is a model that combines physical infrastructure resources with blockchain technology. It coordinates global resource collaboration through blockchain technology, creating a bilateral market of "resource sharing + economic incentives."

A complete DePIN network consists of project parties, off-chain physical devices, suppliers, and demanders, with basic operating modes including:

1. Off-chain hardware devices: can be divided into customized specialized hardware, professional-grade hardware, and smart mobile devices.

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

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

4. Reward Distribution: The token rewards will be distributed to the on-chain address that has passed verification.

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

Why is DePIN needed?

Traditional centralized physical infrastructure networks have the following problems:

• Centralized control, there is a single point of failure risk
• High entry barriers limit market competition and innovation
• Low resource utilization rate, resulting in waste.
• Lack of effective incentive mechanisms

The core value of DePIN lies in:

• Resource Sharing and Digitalization
• Decentralization Governance
• On-chain settlement
• Open Innovation

Current Status of DePIN Development

• Track: Expanding from early storage and communication to fields such as computing power, data, wireless, sensors, and energy.

• Market Size: According to DePIN Ninja data, there are 1,561 projects launched, with a total market value of approximately 22 billion USD.

• Public chain selection: mainly focuses on Solana, IoTex, Peaq, etc., with Polygon and Arbitrum as latecomers.

The current DePIN projects are mainly divided into two directions: focusing on the middle layer and focusing on the demand side expansion.

DePIN Middleware

The middleware project aims to help DePIN applications launch quickly, mainly including:

• DePIN infra: such as DePHY, W3bStream, etc., providing development frameworks and solutions.

• Liquidity solutions: such as PINGPONG, Parasail, providing liquidity support for DePIN projects.

DePIN Application Layer

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

Cloud Network

• Storage: Solutions like Filecoin and Arweave provide Decentralization storage solutions.

• Computing Power: Services like Render Network, io.net, etc., provide Decentralization GPU computing power services.

Wireless Network

Including wireless network sharing projects such as 5G, WiFi, Bluetooth, LoRaWAN, etc.

Sensor

Mainly used for monitoring and capturing data related to environment, geographical location, health, etc.

Energy

Such as Starpower, Powerpod, etc., dedicated to Decentralization energy sharing and trading.

Future Trends of DePIN

• Combined with Web2 application scenarios
• Lowered hardware barriers
• Financial Development
• Mutual support with AI technology

Challenges Faced by DePIN

• The technical implementation difficulty is high.
• Market acceptance needs to be improved
• The profit model has uncertainty.
• May face regulatory pressure

DePIN Project Evaluation Factors

• Hardware: homemade vs third-party, one-time vs ongoing costs, high density vs low density, etc.
• Token Economy Design: Application of models such as BME, SFA, etc.

Summary

DePIN reshapes production relations through Web3 and token economics, releasing productive forces, and is expected to solve the problems of resource monopoly and inefficiency in traditional centralized models. However, its large-scale application still requires time and faces multiple challenges such as technology, market, and regulation. The development of DePIN needs to accumulate strength and seize opportunities.