The one who is best at telling stories and concepts is the currency circle. All kinds of activities come one after another. Inscriptions are finished, runes are made. Before the runes take off, DePIN (decentralized physical infrastructure network) starts to be speculated again. In fact, DePIN's popularity has been on the rise in the past year, but it is a bit impersonal and difficult for people to understand. DePIN's core promise is to bring the principles of blockchain applications into the world of physical "things" and infrastructure, in short the "Internet of Things pro max" whether it's WiFi, security cameras or computing servers.
DePIN covers many projects. From the familiar decentralized storage networks such as Arweave and Fil, to decentralized WiFi connections such as Helium, to community software applications such as Hivemapper, all of them are called "DePIN." Messari divides DePIN into 4 main areas: dePIN, centralized server, wireless, sensor and energy network.
In the original Messari report, there were many similarities between the projects, including collective ownership, distributed infrastructure costs, and growing economies of scale as more users enter the ecosystem. We conclude with Messari’s DePIN Flywheel, explaining how this can be facilitated through token incentives.
The DePIN flywheel above was originally conceived to simply consist of "physical infrastructure" networks such as Fil and Helium, with users providing resources to the network and being rewarded with tokens in return, which then allowed the network to have more capacity to attract more users.
But, this flywheel is not limited to hardware infrastructure. There are similar arguments for data infrastructure. This includes projects centered on consumer data collection and coordination, using blockchain and tokens as common interfaces to coordinate a new data-based economy. Examples of this include consumer-facing applications, such as the Sensor Network Project and Decentralized Uber, which Messari pointed to, as well as potential enterprise-facing blockchain use cases in supply chain or logistics management.
So, one possible way to conceptualize DePIN as a trend might be to fuse the decentralized hardware layer with the new community-owned data economy, ultimately achieving long-term stable operation of the flywheel. I found a few based on the existing models that you can take a look at. If there are more innovative ones later, I will add them.
Helium is one of the oldest and most well-known DePIN projects, primarily a company that expands broadband infrastructure by letting users deploy LoRa gateways in a decentralized manner. In 2017, the network decided to seize the development momentum of cryptocurrency and began to provide cryptocurrency payments through its own L1 blockchain network. It became a monk halfway, but it was in place. At the time, it was one of the few able to connect cryptocurrency and infrastructure. company of.
After so many years of development, Helium has not only become one of the typical representatives of DePIN, but also a model in the encryption industry. I've seen a lot of people online refer to it as a "people's network" and one can clearly see how tokens can be used to incentivize socially beneficial behavior. However, over time, both the Helium network and protocol have encountered liquidity and adoption issues, and the network has been facing a steady decline in weekly revenue. More people are starting to feel that the use cases for the network are overhyped and that incentives are unsustainable.
In April this year, Helium completed the transition from its own L1 blockchain to applications on Solana, in the hope of enhancing user reach and liquidity and leveraging Solana's high transaction throughput to scale.
At this time, Helium began to highlight some key opportunities and risks in the DePIN field. The token is very effective in launching actions for real world use cases, but maintaining sufficient justification and interest levels over an extended period of time is quite difficult, and as L1 and L2 gradually integrate, it will be difficult to justify running a standalone chain rather than leveraging another The arguments for scalability, infrastructure, and liquidity of the chain for wider adoption are sound.
Hivemapper is another well-known DePIN project on the Solana network that aims to create a decentralized “Google Map”. Essentially, users of the project install dash cams in their cars and share live footage with Hivemapper in return for HONEY tokens. The company then uses all this distributed data to build decentralized maps with application API interfaces
Hivemapper’s key advantage over Google Maps is that, as a decentralized, token-incentivized network, it can complete the token mapping process in a cheaper and faster way. In turn, Hivemapper is able to provide a cheaper API as a way to "break" the Google Maps monopoly. Hivemapper emphasizes the core "flywheel" principle of DePIN, which is that we use tokens to perform distributed, decentralized Task. In the Messari report, Messari describes Hivemapper as a prime example of a "sensor network." One might say at the time that this did not fully reflect the true innovation of Hivemapper. But in reality, Hivemapper’s core competency lies in the decentralized data it collects — and then monetizes that data infrastructure by providing API access.
We can imagine that if these data are not generated by the "sensor network", but are generated through other activities, such as browsers, payment codes in shopping malls, and various carriers used in daily life, or by users and artificial intelligence Intelligent interaction generation, the same overall model may also hold. DePIN uses token incentives to generate massive data in a decentralized manner. I have summarized before that traffic brings people and people bring money. Now we need to add a piece of data in front of traffic.
The growth of the DePIN trend also has downstream implications for decentralized governance. Because it has become common practice for many foundations to launch a DAO coordinated by token-based voting after issuing a token, many well-known DePIN projects have DAO governance on their roadmaps. For example, many well-known DAOs now, such as Uniswap, Comp and MakerDAO, essentially only deal with digital or financialized assets. However, as the DePIN project matures and gradually transfers governance to DAO, there will be re-considerations of DAO. The need for DAO to coordinate the purchase, use and maintenance of physical equipment (servers, sensors, hard drives) will continue to increase.
So, DePIN may become a trend that expands the governance tasks of DAOs from digital assets to physical assets, ultimately creating tasks that may require DAOs to operate and behave more like traditional companies. In the long run, this may be a turning point, marking the implementation of "web3" in the "real world".