Article reprinted from: Coinspire
introduction
The Internet, which is now a symbol of globalization, is actually a product of the peak of the Cold War.
In 1969, the U.S. military, which was in the era of "nuclear deterrence", hoped to have a network that could avoid centralized single point failures and recover autonomously when suddenly hit by a nuclear attack. Therefore, the prototype of the Internet, "ARPAnet", adhered to the original intention of "decentralization" and came into being in the form of a fully distributed architecture of "terminals directly connecting terminals".
However, in the past 55 years, from Web1 to Web2, along with the rapid expansion of the Internet’s golden age, the wave of commercialization and globalization has given rise to a many-to-one centralized architecture of “terminal link servers”, which is increasingly contrary to the original intention. In the fragmented platform system, Web2 giants have become the kings, controlling the absolute discretion of the online world and possessing significant influence and value distribution power.
Therefore, in recent years, the Web3 wave that upholds the narrative of decentralization and de-platforming has only just begun to gain momentum. Simple application decentralization is difficult to solve fundamental contradictions, and problems such as efficiency bottlenecks and security risks still exist. How to thoroughly transform the underlying Internet technology stack and subvert the efficiency and security problems caused by the current overly centralized Web2 is the only way to stop the problem.
In this context, DePIN may provide a new solution worthy of attention: 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 make the network programmable, helping to achieve the dimensionality of "DePIN+" to build a new species that is completely different from the traditional Internet architecture.
At the same time, the popularity of AI in Web3, in addition to injecting new vitality into it, also witnessed the fact that blockchain applications are gradually expanding from on-chain activities to the real world, such as RWA, AI, and DePIN.
The narrative of DePIN also means that the gap between physical reality and the ever-expanding blockchain world is gradually blurring. Next, let’s take a look at the present and future of DePIN.
Part 1 Overview of DePIN: What & Why
What is DePIN?
The concept of DePIN is old news, but it is necessary to restate it from the perspective of sorting out. Here we will focus on the basic operation mode of DePIN. By definition, DePIN (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 two-sided market of "resource sharing + economic incentives" by linking hardware and blockchain. This community-driven model is more flexible, more scalable and more robust than traditional single-point resource management.
Generally speaking, a complete DePIN network consists of project parties, off-chain physical devices, suppliers and demanders. The basic operation mode is divided into five steps:
1. Off-chain hardware equipment: usually provided or required by the project party, mainly divided into:
Customized dedicated hardware: For example, Helium requires users to purchase Helium hardware hotspots manufactured by third-party manufacturers to provide hotspot signals for nearby IoT devices to obtain mining rewards; Hivemapper encourages users to contribute to the map network through its dedicated driving recorder (HiveMapper Dashcam).
Professional-level hardware: Idle computers equipped with GPU and CPU chips can start participating in the supply of computing power/data by simply downloading browser plug-ins. For example, Heurist, for owners of idle GPU devices, they only need to download its miner program and set up a miner node to start sharing their computing power to get mining rewards. In the participation method of io.net, it is clearly stated that the starting threshold for equipment connection to the grid is Nvidia GeForce RTX 3050.
Smart mobile devices: lightweight mobile devices such as smartphones, smart watches, bracelets, and even finger rings can join the DePIN network in two ways: running node programs to become the control end of DePIN hardware; directly providing sensor data or computing resources. For example, Silencio uses the built-in microphones of people's smartphones to draw dynamic maps of noise pollution around the world; Acurast uses the storage space of old mobile phones to build a decentralized cloud that anyone can contribute to.
2. Proof: The data generated by physical devices needs to be uploaded to the chain through the off-chain infrastructure and recorded in the tamper-proof blockchain ledger, providing stakeholders with transparent and auditable infrastructure operation records to prove that they have done a certain amount of work as required to obtain incentives. This verification method is called physical proof of work (PoPW).
3. Identity verification: After the data is verified, the on-chain account address of the device owner needs to be checked. Generally, public and private keys are used for identity verification. The private key is used to generate and sign physical proof of work, while the public key is used by the outside world to verify the proof or as an identity tag (Device ID) of the hardware device.
4. Reward distribution: After verifying the data, the token rewards obtained by the physical device off-chain are sent to the address on the chain, which involves the token economics of DePIN. As the economic foundation of the data value network, token economics is the key to whether the DePIN project can run well.
BME: Token burning mechanism. Users on the demand side will destroy the tokens after purchasing services, so the degree of deflation is determined by demand; that is to say, the greater the demand, the higher the value of the token.
SFA: Users on the supply side are required to stake tokens to become qualified miners. The supply determines the degree of deflation, that is, the more miners providing services, the higher the value of the token.
5. Demand matching: A DePIN market platform where supply and demand parties buy, sell, and lease to complete the exchange and matching of resources; at the same time, the DePIN market provides real-time market data, including asset prices, historical performance, and energy production data, which helps ensure fair pricing and is usually managed by a decentralized autonomous organization (DAO), allowing stakeholders to participate in the decision-making process.
Image source: FMG
Why do we need DePIN?
Let's take a simple example. Noise pollution is a particularly common phenomenon in urban life. The quantification of noise pollution data is not only of commercial value to real estate developers, hotels, restaurants and other companies, but also of reference significance to urban planning and academic research. But would you be happy to let a private company install microphones throughout your city? Or imagine the upfront cost of doing so, how far can its coverage be extended, and how fast can it expand?
If this is a user-organized noise detection network, it will be much simpler. For example, Silencio deploys noise pollution sensors through the download of its application on the user's mobile phone. Mobile users provide accurate and ultra-local noise pollution data to build a global measurement network and receive token rewards. At the same time, the platform makes a profit by selling noise pollution data.
This is one of the meanings of DePIN. In traditional physical infrastructure networks (such as communication networks, cloud services, energy networks, etc.), due to huge capital investment and operation and maintenance costs, the market is often dominated by large companies or giant companies. This centralized industry characteristic brings the following difficulties and challenges:
Centralized control: Controlled by a centralized organization, there is a risk of single point failure, vulnerability to attacks, and low transparency, and users have no control over data and operations.
High entry barriers: New entrants need to overcome high capital investment and complex regulatory barriers, which limits market competition and innovation.
Waste of resources: Due to centralized management, resources are idle or wasted, and resource utilization is low.
Insufficient incentive mechanism: There is a lack of effective incentive mechanism, and users are not very motivated to participate in and contribute network resources.
The core values of DePIN can be summarized into the following four points:
Resource sharing and digitization: transforming idle physical resources (such as storage, communication, and computing power) into tradable digital assets in a decentralized manner;
Decentralized governance: Based on open protocols and crypto-economic models, users contribute capital, assets, and labor to the same goal and are incentivized transparently and fairly;
On-chain settlement: Blockchain reduces fees by becoming the single source of truth for all market participants’ shared ledger;
Innovation: In an open, permissionless global holy medicine system, the speed of experimentation is an order of magnitude higher than centralized infrastructure.
DePIN Development Status
Track: As an early development field of blockchain, DePIN has a long development time. The earliest projects, such as the decentralized network Helium, and the decentralized storage Storj and Sia, basically focus on storage and communication technologies.
Image source: Messari
However, with the continuous development of the Internet and the Internet of Things, the requirements for infrastructure and innovation are increasing. DePIN's projects have mainly expanded to computing power, data collection and sharing, wireless, sensors, energy, etc. However, judging from the top 10 projects in the DePIN field by market value, most of them belong to the storage and computing power fields.
AI is the keyword of DePIN in this cycle. Since DePIN is naturally suitable for the decentralized sharing needs of AI data and computing power, a number of AI DePIN projects have emerged, dedicated to integrating global computing, storage, network, energy and other resources to provide underlying infrastructure support for the training, reasoning and deployment of AI models.
Image source: CoinMarketCap
Market size: According to DePIN Ninja data, the number of DePIN projects currently online has reached 1,561, with a total market value of approximately US$22 billion; Messari predicts the total potential market size of the DePIN sector: by 2028, the DePIN market size may exceed US$3.5 trillion, and may add US$10 trillion to global GDP in the next decade (US$100 trillion in ten years).
L1/L2: Due to high throughput and low gas fees, current DePIN projects are mainly deployed on the Solana public chain, as well as DePIN-specific chains such as IoTex and Peaq. At the same time, Polygon and Arbitrum are gradually becoming rising stars.
Image source: Cryptoresearch
Since the hardware supply chain is already very mature, the project party does not need to invest a lot of research and development efforts, so according to the focus, the current DePIN project is divided into two directions, one is focusing on the middle layer of DePIN; the other is focusing on the expansion of the DePIN demand side.
Part.2 DePIN middle layer
DePIN-related IoT devices need to be connected to the blockchain on a large scale, which poses technical difficulties and liquidity pressures, such as hardware design and production, how to achieve reliable transmission and data processing of off-chain data on the chain, and token economic design. As a result, the DePIN track has derived middleware that connects devices and the DePIN network, involving connection and two-way services, aiming to help project parties quickly launch DePIN application projects and provide them with development frameworks, developer tools, overall solutions, etc.
It not only includes developer-friendly tools and one-stop services like DePHY and Swan; there is also Parasail, a re-staking protocol specifically for DePIN, which aims to enhance the liquidity and value utilization of the native tokens of the DePIN network.
DePIN below
DePHY: Aims to provide open source hardware solutions, SDKs and tools for the DePIN project, and reduce the manufacturing and network messaging costs of hardware products bridging blockchains by synchronizing 500ms-level off-chain network nodes running on blockchains.
W3bStream: The off-chain computing protocol W3bstream allows IoTeX DePIN projects to easily generate logic based on smart device data to trigger blockchain operations. Some well-known IoTeX-based DePIN projects include Envirobloq, Drop Wireless, and HealthBlocks.
At present, with the increasing number of DePIN projects providing frameworks and solutions, DePIN application layer projects built based on their infra are also beginning to emerge gradually, such as Pebble's EnviroBLOQ based on IoTeX, Dimo and Drife based on W3bstream, Starpower and Apus Network based on DePHY, and so on.
Liquidity Solutions
PINGPONG is a DePIN liquidity and service aggregator that optimizes and maximizes mining returns across multiple networks through innovative tools and solutions.
Parasail is a re-pledge protocol specifically for DePIN services. By activating idle assets in mature networks (such as pledged or re-pledged tokens), it provides economic guarantees for DePIN services and helps the DePIN project attract more users and service providers.
Taking Parasail as a detailed example, Parasail currently mainly provides re-staking services on the Filecoin chain, and will open re-staking services on chains such as Iotex, Arbitrum, and Ethereum in the future. The following uses FIL as an example to show how Parasail works:
Staking FIL tokenization: Storage providers can stake FIL and mint pFIL tokens at a 1:1 ratio.
Open market for pFIL: Storage providers can sell pFIL to gain liquidity, and token holders can buy pFIL to gain FIL mining rewards.
Risk recovery and reward distribution: When the staked FIL is released or the miner receives a block reward, the Repl protocol recovers FIL and repurchases pFIL through auction, and the excess proceeds are distributed as rewards.
Part.3 DePIN Application Layer
The DePIN application layer accounts for the majority of the DePIN tracks. This article is based on public research reports and DePIN browser project summaries, and is mainly divided into four major sectors: cloud network (storage, computing), wireless network (5G, WiFi, Bluetooth, LoRaWAN), sensors (environment, geography, health), and energy.
Cloud Network
DePIN's areas of focus on cloud networks include decentralized storage and computing.
Storage
Decentralized storage is a key part of the DePIN ecosystem, aiming to solve the problems of high cost, privacy risks and lack of censorship resistance of traditional centralized storage:
As one of the most well-known DePIN projects, Filecoin is based on IPFS technology (IPFS itself is already a widely recognized distributed file system), using a storage proof mechanism to ensure data integrity and authenticity. Miners get FIL rewards by contributing storage space, and users pay on demand to store data. This model not only reduces storage costs, but also activates a large number of idle hard disk resources around the world;
Arweave provides a permanent storage solution where users only need to pay once, making it ideal for data that needs to be preserved for a long time, such as historical archives, NFT metadata, or blockchain transaction records.
In general, decentralized storage is clearly more censorship-resistant and transparent than traditional cloud storage, but storage speed and initial entry barriers may still be issues that need to be optimized.
▎Computing power
Computing power is the core productivity resource of this round of AI wave. DePIN projects such as decentralized computing power are a dislocated supplement to the existing computing power service landscape (CePIN) dominated by centralized cloud giants, rather than a direct replacement: that is, cloud service giants with massive computing power resources are responsible for "urgent, difficult and dangerous needs" such as large model training and high-performance computing; the decentralized cloud computing power market is responsible for more diversified "flexible and low-cost needs" such as small and medium-sized model calculations, large model fine-tuning, and inference deployment.
In fact, it is to provide a more inclusive dynamic balance supply and demand curve between cost-effectiveness and computing power quality, which is more in line with the economic logic of optimizing resource allocation in the market. Represented by old decentralized computing projects such as Render Network and Akash Network, as well as this year's latest DeAI fusion narrative giant io.net:
Render Network: Provides decentralized GPU rendering services, which can provide flexible and low-cost computing power support for applications that require real-time computing (such as virtual reality, 3D rendering, and industrial automation), especially in the field of metaverse and real-time interaction.
io.net: Going a step further, it is not only a computing resource matching platform, but also realizes efficient coordination of distributed GPUs through a complete set of product architectures:
IO Cloud: supports users to create GPU clusters based on demand for complex tasks such as AI model training;
IO Worker: Provides management tools for computing power suppliers, including temperature control monitoring, computing power utilization analysis, etc.
IO Explorer: Provides visualization of network statistics and reward data, making it easier for users to track the dynamic flow of computing resources;
PinGo is an AI and DePIN project on the TON network. Its purpose is to solve the problem of fragmentation and idleness of idle computing resources and provide a computing power foundation for building AI models. PinGo was originally a Cpin Web2 company with nearly 100,000 devices, which will be integrated into its own DePIN network in the future.
However, it is not easy to decentralize computing power to activate idle computing power. What is most needed for large model training is stability. If it is interrupted, the sunk cost is too high. Because the technical details of computing power delivery are complicated, the bilateral scheduling model similar to Uber and Airbnb fails here. In addition, NVIDIA's CUDA software environment and NVLINK multi-card communication make the replacement cost extremely high. NVLINK's restrictions on the physical distance of graphics cards require that graphics cards be concentrated in the same data center.
In this context, the business model of decentralized computing power supply is difficult to achieve and has become a mere narrative. Many computing power projects are forced to abandon the training market and turn to the inference market. However, in the absence of large-scale application explosion, the demand for inference is insufficient. Large enterprises meet the inference demand by building their own systems, which is more stable and cost-effective.
Wireless network
Dewi (decentralized wireless) is a particularly important part of the DePIN track. It provides services for the Internet of Things and mobile communications by allowing many independent entities or individuals to collaborate to build a wireless infrastructure based on token incentives. The shareable wireless networks include:
Cellular 5G: Provides high download speeds and low latency, such as Pollen Mobile, which uses decentralized base stations to build a distributed 5G network with the goal of reducing mobile communication costs and improving coverage;
WiFi: Provides network connections in specific areas, such as Wicrypt. Users can purchase its dedicated equipment to contribute WiFi and earn tokens; Metablox (now renamed Roam) is similar to the "Web3 version of the master key", through which users can share their self-built global public WiFi network; Wifi Dabba, mainly cooperates with local preferred TV operators in India.
Low-power wide area network (LoRaWAN): Provides convenience for IoT communications. The leading DePIN project Helium is a typical example. Through LoRaWAN routers, it provides low-cost, high-coverage communication services for IoT devices, thereby replacing the centralized service model of traditional telecommunications networks. Users receive HNT rewards by running routers. This model is particularly suitable for scenarios that require large-scale device coverage, such as agricultural IoT, logistics tracking, and environmental monitoring.
Bluetooth: enables short-distance data transmission.
This network model is suitable for scenarios such as smart cities and agricultural IoT. However, the advantage of decentralized communications is that it is a low-cost alternative to traditional telecommunications infrastructure, but deployment efficiency and maintenance of physical equipment are still challenges that cannot be ignored. Dewi needs to rely on the network power of traditional operators to expand the market, such as DePIN supplementing traditional operators or providing them with corresponding data.
sensor
Sensor networks are another niche area for DePIN, which basically consist of interconnected devices, each designed to monitor and collect specific data in its environment, mainly through monitoring and capturing data such as environment, geolocation, health, etc.:
Environment: An obvious use case is weather forecasting, and WiHi hopes to be a unified platform that connects all these entities, simplifying data sharing, improving forecast accuracy, and improving climate monitoring. Any entity that operates a weather sensor can apply to contribute data to WiHi.
Geography: For example, HiveMapper collects the latest high-resolution data (4K street-level images) through the car cameras installed by the holders (such as taxi drivers and couriers), and contributes their data to map image drawing and collection to obtain token rewards. The demand side purchases existing maps or rewards new regional data in emergencies. At present, it has real commercial value for insurance assessment to obtain data on the external conditions of houses in a timely manner, autonomous driving vehicle developers to obtain the latest road conditions and construction zone information, and real world assets (RWA).
energy
Traditional energy markets face the following problems: mismatched supply and demand in regional energy networks, lack of transparent and tradable energy markets, large untapped clean energy markets, slow and costly expansion of energy networks. By decentralizing energy networks, DePIN enables users to utilize their excess energy production in a direct way. This approach not only encourages more prudent energy consumption, but also reduces dependence on traditional energy suppliers. The DePIN approach to energy networks can provide a more democratic, efficient, and beneficial model for energy production and consumption.
Starpower: By creating a decentralized virtual power plant (VPP), it connects small power supply networks with the demand side, reduces energy transmission and improves energy efficiency.
Powerpod: Changing the way electric vehicles (EVs) are charged by creating a decentralized network of community charging stations.
Arkreen: Building applications and services by incentivizing providers to provide solar installation capacity and other similar data, including Renewable Energy Certificate (REC) issuers and green computing operators, by providing access to the data.
Part.4 How do you view the future of DePIN?
DePIN Trends
▎Combined with web2 application scenarios
The potential of DePIN lies not only in its underlying decentralized technology advantages, but also in a wide range of web2 industry application scenarios, which span multiple fields such as the Internet of Things (IoT), smart cities, energy sharing, edge computing, etc. Each field represents DePIN’s important role in promoting the integration of the physical world and digital networks.
We can imagine a life scenario in the future. One morning in 2030, Alice starts Helium on her way to work to provide communication support for nearby pedestrians and devices. On the way to work, she turns on DIMO to record her vehicle equipment data and continuously contributes the latest map data to Hivemapper. Then she arrives at the office, which is a solar energy company. Alice skillfully installs Arkreen data collection equipment for each solar panel to facilitate users to record their carbon footprint.
Image source: Waterdrip Capital
▎Hardware threshold is lowered
Previously, the main business of DePIN devices included computing power, storage and bandwidth, and the devices were usually fixed in a certain location. At present, DePIN presents a transition from professional-level devices to consumer-level products on the hardware side, such as mobile phones (Solana Mobile Saga), watches (WatchX), AI smart rings (CUDIS), e-cigarettes (Puffpaw), etc. The devices are small and flexible and can be carried around or even worn.
As the most popular hardware device, the lowering of hardware thresholds is expected to promote the further expansion of the user base: on the one hand, the sensors and computing modules of encrypted mobile phones are natural fundraising terminals, and can participate in the DePIN economy as DePIN devices, lowering the sales threshold and increasing the frequency of use; on the other hand, the encrypted application market built into encrypted mobile phones is an excellent user entrance for dAPP. This type of market has many types and a wide range of applications, which has yet to be further explored and is a blue ocean with huge potential.
Financialization
The tokenization of physical hardware also opens up new possibilities for on-chain finance for DePIN:
Staking liquidity pools to increase income sources, such as the HONEY-JitoSOL liquidity treasury incentive plan launched by Hivemapper, further improves the incentive effect.
DePIN hardware assets are securitized on the blockchain, issuing products similar to the traditional financial Reits model;
Based on the tokenization of data assets, data-backed financial products can be created. For example, DIMO’s car data can be used for on-chain car loans.
▎DePIN and AI feed each other
The characteristics of DePIN are also naturally applicable to the development of AI.
First of all, DePIN can serve AI at multiple levels such as computing power, models, and data, and release capabilities that AI does not originally have in a decentralized way. AI is essentially an intelligent system trained based on massive data. The rich end-side data collected by IoT devices in DePIN just provides a wide range of training and application scenarios for AI. Currently, many AIPIN projects capture data through hardware sensors, and then use AI to optimize data processing capabilities, realize end-to-end process automation at the application level, and release the potential of industry segmentation scenarios.
At the same time, the addition of AI also makes DePIN smarter and more sustainable. AI can improve equipment efficiency and optimize network resource allocation through deep learning and prediction. It can also help audit smart contracts, provide personalized services, and even dynamically adjust the economic incentive model of the DePIN project through algorithms.
DePIN's constraints on scale
Although the DePIN concept is attractive, the complexity of technical implementation, market acceptance, regulatory policies, etc. has significantly increased the difficulty of its implementation on a large scale:
From storage to computing power, from communications to energy, each DePIN solution requires the integration of different types of physical hardware and decentralized protocols, which places extremely high demands on hardware manufacturers, network developers, and participating nodes;
In addition, the market's acceptance of the DePIN model is still unclear. In practical applications, how to convince enterprises or individuals to switch to DePIN's network infrastructure and pay the high initial costs remains an unsolved problem;
The uncertainty of the profit model also limits the appeal of DePIN. Currently, many projects rely on the token economy to incentivize participants to provide resources, but whether this model can maintain long-term sustainability depends on the market's recognition of the value of the token and the growth rate of actual demand; the problem is that the narratives of most projects are slightly outdated, the product experience is insufficient, and it is often difficult to compare with Web2. If you rely solely on token incentives to attract users, you may fall into a "death spiral" once the incentive model collapses. Because it relies on the dual flywheel of hardware sales revenue and token models, the stability of the economic system is crucial. If the token value fluctuates too much, or the hardware deployment and maintenance costs are too high, the economic incentives of the entire system will be difficult to maintain, which may lead to user loss or even network paralysis.
At the same time, because DePIN involves key areas such as storage, computing, and communications, its potential influence may trigger national or regional legal and policy interventions. For example, decentralized storage networks may be used to store sensitive or illegal content, which will cause regulators in some countries to put pressure on the entire network and require it to adopt a stricter content review mechanism (some people have previously stored politically sensitive information through decentralized storage projects);
In general, from the complexity of technology to market acceptance and regulatory uncertainty, each step is related to whether it can truly become a new benchmark for infrastructure. How to break through this pattern and let users truly feel the economic and unique value of DePIN is the competitive pressure it must face.
Part.5 Factors to consider for a potential DePIN project
Hardware
Homemade vs. third-party: Currently, most of the dedicated hardware for DePIN projects is produced by third-party hardware. The advantage is that it can guarantee its professionalism, but the hidden concern is that its expansion may be affected by its third-party supply chain. In contrast, projects with strong hardware supply chain capabilities can achieve rapid business growth in the first curve stage through equipment sales and agency models.
One-time vs. ongoing costs: Some DePIN networks are one-time costs, such as Helium, which provides passive coverage to the network without requiring much additional work from the user after purchasing the hardware device to set up the hotspot; some require ongoing user participation. DePIN networks are easier to expand if contributors pay a one-time cost (time or money) at the beginning, rather than an ongoing cost; passive networks are easier to set up and therefore easier to expand.
High density vs. low density: The density of hardware coverage also needs to be factored into DePIN projects, such as XNET, which is building a carrier-grade CBRS wireless network. Their network radios need to be installed by professionals from local ISPs, which is difficult to install and not conducive to density, but because their equipment is more professional, their network still has the potential to expand. High-density networks require more contributors to reach a threshold scale. In contrast, lower-density networks can utilize more complex hardware and/or professional contributors.
Scarce VS Common: For example, XNET is building a carrier-grade CBRS wireless network. Their network radios need to be installed by professionals from the local ISP, which is difficult to install and not conducive to density deployment, but because the equipment is more professional and resources are more scarce, their network still has the potential for expansion.
Token Economic Design
Token economics, as the economic foundation of the data value network, is the key to whether the DePIN project can run smoothly. The two mainstream ones are BME (burn and mint equilibrium) and SFA (stake for access). BME and SFA constitute the basic core framework of the DePIN project, and the empowerment of tokens improves the token economy, such as:
Use points as a pre-mining commitment to miners, and redeem tokens at a certain ratio after issuance, or adopt an economic model of points + tokens.
Giving tokens governance capabilities allows holders to participate in major network decisions, such as network upgrades, fee structures, or treasury reallocations.
The staking mechanism encourages users to lock up tokens and maintain the stability of token prices;
Project parties can also use part of their revenue to purchase tokens and pair them with other major cryptocurrencies or stablecoins to join liquidity pools to ensure that the tokens have sufficient liquidity and facilitate transactions by users without significantly affecting prices.
These mechanisms help ensure that the interests of users on both the supply and demand sides are aligned with the interests of the project owners in the long term, thereby achieving the long-term success of the project.
Summarize
From a macro perspective, we will find that Web3, as a value network, has great potential to reshape production relations and unleash productivity. The core logic of DePIN is to build a distributed bilateral market by adopting the infrastructure of "Web3+token economy". From this perspective, whether it is storage, computing power, data or communication networks, it is possible to rejuvenate with the help of DePIN's new model.
By integrating idle global resources (such as storage, computing power, communication equipment, etc.), the problem of resource monopoly and inefficient allocation in the traditional centralized model is solved. This model effectively connects global hardware resources with user needs, which not only reduces the cost of resource acquisition, but also improves the elasticity and risk resistance of infrastructure, laying the foundation for the popularization and application of decentralized networks.
However, although DePIN has shown great development potential, it still faces challenges in terms of technology maturity, service stability, market acceptance and regulatory environment. Today, blockchain performance, increasingly rich and mature token economic models, and market cycles are all ready for the outbreak of DePIN, but large-scale applications still lack opportunities. "Humble yourself and wait for the right time, and don't fight with fate." DePIN relies on the flywheel effect, which requires broad observation and selective selection, accumulation and release, and will never become a silent narrative.
Reference：
State of depin 2023
https://DePIN.ninja/leader-board
https://DePINhub.io/rankings/investors
FMG in-depth research report: 5 opportunities in the DePIN track from bottom to top
Archaeological DePIN, looking for the "orthodoxy" of the track
*All content on the Coinspire platform is for reference only and does not constitute an offer or recommendation of any investment strategy. Any personal decision made based on the content of this article is the responsibility of the investor, and Coinspire is not responsible for any gains or losses arising therefrom. Investment is risky, so make decisions carefully!