DePINs (decentralized physical infrastructure networks) are everywhere, or, at least, to those of us reading CoinDesk in July 2024, they are.
As someone who has been involved in this vertical since its inception in 2019, I realize that I’m probably more of an early adopter and fanatic about DePIN than most, but when I sat down to write this post and took a quick inventory of the DePINs I participate in on a daily basis, even I was surprised by the number and variety of projects out there right now.
First, I wear a Cudis ring on my finger, which provides me with health data and pays me credits for future airdrops, and I have Helium and XNET WiFi hotspots at home, which provide wireless connectivity for my devices (and other people’s devices) and pay me tokens when used.
Helium Mobile (which is my only mobile carrier, by the way) has an app on my phone that pays me in cryptocurrency to opt-in to sharing location information, which is used to better triangulate data usage and network demand.
I have the Grass browser extension running on my computer, which allows AI labs and web crawlers to view the internet through my residential IP and earn me airdrop points.
Finally, I have a DIMO device in my car, which provides me with real-time data about my vehicle, makes this anonymized data available to third-party developers, and (again) pays me in tokens.
If you think this list is exhaustive, you are thinking too small, today the DePIN industry has more than 1300 projects and its growth is accelerating in the bull market.
While the popularity of the DePIN model is exciting, what’s more interesting to me is how exactly the next generation of DePINs are building their networks… and how they differ from their predecessors.
Here are the ways I’ve seen this generation of DePIN improve after five years of learning and iteration.
Everything is demand-oriented
The most common, but fair, criticism of the first wave of DePINs, such as Helium’s IoT network, is that they did a good job of building supply, but not enough demand.
This generation of DePINs are securing demand early, in many cases before the TGE, and they are also building supply in a more targeted and measured way, letting demand dictate in which country or world they incentivize supply-side builds.
For example, Spexi, a drone aerial imagery DePIN company, signed seven-figure demand contracts before the TGE and paid six-figure cash to drone operators, who salivated over the simple, gamified opportunity to make money with their existing drone assets.
Lowering the barrier to entry for contributors
During this cycle, we saw the rise of DePINs, which use general-purpose hardware rather than custom hardware that already exists on their supply side. Another way to accelerate supply-side growth is to leverage everyday activities that people are already doing.
Natix is an example of both of these strategies, using smartphones in cars as dashcams to capture street-level imagery. The company hopes to leverage a behavior that already happens on a daily basis (driving), rather than trying to incentivize new behavior with tokens (a more “expensive” proposition from a token incentive perspective).
The contrasting example here is a wireless DePIN like Helium, which wants to incentivize contributors to get on rooftops and install CBRS receivers, which is a new customer acquisition behavior.
Tend to guess
Incentives make the world go round, and DePIN has always known that, but in this cycle, we’ve seen things get even more intense.
The emergence of points as a mechanism to record contributors’ contributions prior to the TGE has been a huge success and provides this generation of DePINs with more flexibility and time to collect data before finalizing their token economics.
Referral programs are a game changer where contributors may receive a fixed amount of points or tokens or even a percentage of their referrer’s points or tokens in perpetuity, Grass is the best example of a successful points program driven by referral incentives.
Staying centralized longer
No project, idea or concept can be realized without a dedicated person or team to make decisions, iterate and drive quickly. Creativity is most fragile (but also most flexible) in the early stages.
In this cycle, we all hope to see DePIN quickly find product-market fit (PMF), effectively expand supply and demand, and generate revenue on the chain. Before some early signs of PMF appear, we don’t care much about decentralization. Only effective things are worth decentralizing.
Take 3DOS, for example, a DePIN for the manufacturing industry whose founders created a popular 3D printer operating system that allows devices to be networked and have their print jobs automated and remotely controlled.
He sees huge growth in the Web2 world, with NASA, Google, and 40% of US universities as his clients, and he sees 3D printers as a shared resource and is creating a global manufacturing network where businesses can submit a job, find a printer in the area closest to the end customer (reducing shipping costs and time), and then contract with the printer owner or shop to fulfill the contract.
3D printer owners can monetize their existing assets, businesses can save money and time on printing goods, and everyone benefits.
I mention 3DOS because it’s an exciting use case, but also because it’s early in its lifecycle and John Dogru (founder) is taking full, centralized control of the idea, software, network, demand side, etc., as he should.
Without him in charge at this early stage, nothing would get done, and there would be nothing worth decentralizing anyway!
DePIN (as an industry) is still in its infancy, but there has been enough time to learn lessons from the first generation of DePIN and improve upon them.
This generation of DePIN prioritizes demand in the early stages, expands the supply side faster by lowering entry barriers and points, and maintains centralization longer to speed up shipments.
New DePINs are being launched at an astonishing rate, and there will be more iterations and learnings in the future. DePIN remains one of the most influential ideas in the crypto industry and a powerful positive force in the real world.
I look forward to the success of the DePIN 2.0 team and to writing an update article for the DePIN 3.0 team in just a few years!
🔍 Project Spotlight - EMC
EMC (Edge Matrix Computing) is the world's leading AI computing power DePIN. It has established computing power networks and AI + Web3 communities in more than 30 countries and regions around the world. EMC is the first in the world to propose a new concept of "DeAI" and aims to become the "OpenAI" in the decentralized Web3 field.
DeAI provides a more open, transparent and democratic solution, including decentralized AI models, data, applications, computing power, etc. There are already many AI products on the EMC network, including EMC Hub, JarvisBot, OmniMuse, etc.
The birth of EMC stems from the supply and demand contradiction caused by the rapid development of AI technology and the shortage of GPU computing resources. In this era, computing resources are as important to the development of AI as oil is to the industrial revolution. However, we have seen that high-performance GPU computing power is almost divided up by a few giant companies, and ordinary entrepreneurs cannot access cost-effective and stable computing power. What EMC does is to provide distributed high-performance AI computing power DePIN to AI developers and enthusiasts around the world.
For more information about EMC, read:
AI × DePIN Project EMC Completes Millions of Dollars in First Round of Financing, Swiss Bochsler Group and Others Participate
Exploring the future of EMC: RWA + DePIN, GPU + AI DApps
#Depin赛道 #AI幣 #RWA赛道 #EMC #DEAI🤖🤖🤖
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