Author: Dorian/IoTeX

DePIN: Another disruptive change brought to the world by Web3 following decentralized finance

When it comes to DePIN, most people think of mining machines, such as computing power mining, storage mining, mobile phone mining, etc. This understanding is relatively superficial. The accurate definition of DePIN is 'decentralized physical infrastructure network,' which includes energy, communication, computing power, etc., which are often monopolized by oligopolies in today's society and have massive value and profits, as well as daily products like smart wearables and consumer electronics that contribute valuable data.

High-threshold public utilities monopolize excessive profits, preventing new competitors from entering, stifling innovation, and forcing people to choose expensive services from a very small number of monopolistic service providers. Even consumer-grade smart devices are secretly collecting our sensitive and valuable data for their own profit. This unfairness is why we need DePIN.

If the emergence of BTC outlined the map of decentralized financial systems, then DePIN points to the direction that humanity's public infrastructure should take in the future.

DePIN is a revolutionary concept that aims for everyone to become a contributor to the modernization of global infrastructure and receive a fair share of the tens of trillions of dollars represented by these infrastructures.

Messari: DePIN will create 10 trillion market increments in the next 5 years

DePINscan.io

From DePIN Scan, we can see that the overall market value of the current DePIN track is about hundreds of billions, and the number of projects is not many, far less than DeFi, NFT, Gamefi, etc. This is determined by the characteristics of DePIN:

1 Complex off-chain interactions: Compared to purely on-chain projects like DeFi, DePIN projects often generate a large number of communication scenarios with off-chain data and devices, which requires projects to process complex off-chain data on-chain;

2 The threshold brought by hardware: Another important reason for the relatively small number of DePIN projects is that the processes, cycles, and costs involved in hardware development are far higher than those of purely on-chain projects;

3 Higher development difficulty: Based on the above characteristics, the development of DePIN involves the connection from off-chain to on-chain, and may even require the establishment of additional hardware development teams, making its difficulty not comparable to other Web3 projects.

Thus, we can see that the construction threshold for DePIN projects is very high, but from another perspective, the team's capability and resource capability for DePIN projects are much stronger, and the risk of rug pulls is relatively smaller, with very few forked projects. In fact, many DePIN teams have a deep Web2 background, and some are even traditional enterprises that have entered the field personally as part of their innovation strategy.

The well-known research institution Messari stated in its report that the DePIN market scale is rapidly expanding and is expected to reach tens of billions by 2025. This growth is driven by multiple factors, primarily the increasing number of Internet of Things (IoT) devices, which is expected to exceed 30 billion globally by 2025. This massive base of devices provides abundant scenarios and demands for the application of decentralized physical infrastructure. Additionally, as awareness of data security and privacy protection increases, the demand for secure data exchange and decentralized solutions among enterprises and users is also rising.

The market potential of DePIN is also attributed to its wide application in fields such as smart cities, smart logistics, and smart manufacturing. By utilizing blockchain technology, DePIN can achieve secure interconnection and efficient management between devices, reduce operating costs, and enhance transparency and trust. As more and more enterprises and developers recognize the advantages of decentralized infrastructure, the application of DePIN will continue to expand, driving innovation and development in related markets and industrial chains. Therefore, the market prospects of DePIN are widely optimistic, and it may become an important part of the intersection between the Internet of Things and blockchain in the future.

The panoramic view of the DePIN track organized by IoTeX

DePIN market development and user participation strategy

From a hundred billion current situation to a trillion future, the entire track is expected to achieve hundreds of times growth, but how will this trend be realized? What opportunities can we grasp?

First of all, DePIN is an opportunity for Web3.

DePIN, like DeFi, is an important transformation brought to us by Web3. The development of DeFi has built a new form of financial infrastructure for us, while DePIN will build a new form of public infrastructure. On one hand, Web3 needs DePIN as a truly valuable driving force to bring new momentum and market to the entire industry, bringing traditional massive resources into Web3 with new operational rules. Currently, the only new market with real potential and channels is DePIN, which is why the industry circles are optimistic about the DePIN track; on the other hand, traditional enterprises can leverage DePIN to join the wave of innovation in Web3, which is the easiest way for traditional enterprises and investment institutions to enter Web3, bringing them exciting new breakthroughs.

Secondly, DePIN is an opportunity for large funds.

This is also the most discussed topic among institutions at various industry summits. The current Crypto market is gradually awakening, and the ways that large funds and institutions are operating seem to no longer be effective, as the market is flooded with small, scattered meme and 'fast food projects'. Has the institutional path that has driven innovation and development for hundreds of years been wrong? Not really, the main reason is that the market is flooded with projects that cannot create value and cannot self-develop; the only way for such projects to be launched is to raise the price for sale.

DePIN is different; it connects Web3's decentralized system in governance, distribution, and economics, while covering real scenarios in functionality, utility, and value. It has the ability to create value and generate revenue, breaking the zero-sum game situation that plagues Web3. Interestingly, DePIN is also a path that traditional funding logic can understand, experience can comprehend, and legal processes can navigate, which other tracks do not possess.

In addition, how should ordinary users grasp the opportunities of DePIN?

In the trend of the trillion incremental market of DePIN, institutions have a more reasonable participation path, traditional institutions also have a channel to enter, how should ordinary users better seize the DePIN wave?

Strategy 1: Seize DePIN Infrastructure

From the perspective of industry maturity and infrastructure completeness, DePIN still has a certain distance to a truly usable large-scale explosion. Currently, there is a serious lack of the intermediate layer from off-chain to on-chain, which leads developers of different projects to repeatedly develop middleware for off-chain and on-chain data, behaviors, etc. Or some projects only treat blockchain as a token tool, besides the token, everything else still operates in a centralized traditional way. Therefore, IoTeX, which has been deeply involved in DePIN for seven years, has launched the DePIN modular platform strategy to address the common difficulties faced by DePIN projects and provide practical construction for DePIN innovation teams as a public facility.

So, if you are optimistic about DePIN but are unsure whether the market is mature or which project can provide long-term returns, it is better to seize the opportunity to participate in DePIN infrastructure, as it progresses with the development of the industry.

Strategy 2: Invest in physical devices

Unlike other tracks, many DePIN projects have opportunities for device mining. Compared to hoarding coins and trading, mining is more like an 'operational' investment. Under the premise of a reliable project, the returns from device investment are relatively stable, and there are hedging strategies to mitigate risks for more stable APR returns.

To reduce risks, one can also choose to invest in 'general-purpose' devices, such as GPUs, which can be switched to different projects without changing equipment. Alternatively, invest in 'practical' devices, such as routers, smart wearables, etc., which at least have the same functionality as traditional devices at a practical level, and mining profits can be considered as additional rewards.

Strategy 3: Join DePIN Innovation

Yes, if you really believe in DePIN, why not join this wave of innovation? Since DePIN accommodates a large number of traditional business scenarios, more diverse personnel needs will follow. Positions such as production manufacturing, hardware development, and product marketing that are not needed in scenarios like DeFi and NFT will be able to develop in the DePIN field.

DePIN has the richest application scenarios, from large energy systems to small smart wristbands. The innovation opportunities in the DePIN field are numerous. Talents with combined experience in Web3 and traditional industries will also be a scarce resource in the DePIN field.

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