Original author: Coin98 Insights
Original title: What surprises will Depin bring us in this bull market?
Compiled by: Luke, Mars Finance
DePIN is attracting capital inflows
Since its rise at the end of 2022, DePIN (Decentralized Physical Infrastructure Network) has gradually been accepted by the community. DePIN utilizes blockchain technology as an intermediary to connect resource suppliers with customers. This field is developing rapidly.
Many investment funds choose to invest in DePIN projects, among which Filecoin and Helium are the most prominent, successfully raising hundreds of millions of dollars.
DePIN has gained attention for the following advantages:
Easy to participate: Users can easily join.
Decentralized: Not under third-party control, thereby reducing costs for service providers and customers.
Optimize returns: Achieve maximum returns through project reward mechanisms (incentives).
For this reason, there are high hopes for DePIN to attract capital inflows and its potential to compete with traditional markets in the future.
However, is DePIN strong enough to achieve these goals?
Next, we will explore the current landscape of DePIN and whether it can truly bring about breakthroughs or merely be 'adding unnecessary details'.
Current development direction of DePIN
The basic model of the DePIN project is similar to projects in other cryptocurrency markets, covering both product and economic aspects.
Product level
Many needs in modern society have been met by traditional enterprises or intermediaries (such as Grab, Amazon, Uber, etc.). Therefore, to achieve groundbreaking DePIN projects, a large number of new user demands must be addressed, which is very difficult.
Economic aspect
In the past, almost all DePIN projects mimicked traditional product models and attracted users through economic incentives. Using tokens as incentives did indeed attract a large number of users in the short term. However, this model is often unsustainable: when user returns are lower than investment costs, the project's various metrics will decline significantly.
For example, in the early stages of the Helium project, users were allowed to recoup their costs in a short time by installing devices, attracting a large number of users. However, as the number of participants increased and project income could not keep up, later users needed to wait thousands of days to recover costs.
Currently, some innovative DePIN projects are emerging, characterized by:
1. Focus on new market demands
With the rapid development of fields such as cryptocurrency and artificial intelligence, new demands continue to emerge. These fields have less competition, providing opportunities for DePIN projects.
For example:
Projects like Io.net and Render Network provide a market for entities with idle GPU and CPU resources (such as servers, data centers, etc.) to rent them out to demand parties. Against the backdrop of rapid development in AI, blockchain, and graphics processing industries, the demand for computing resources is very high. Such projects are expected to attract significant value.
Currently, the resources provided by the Io.net platform include:
200,953 GPUs and 53,607 CPUs are currently being rented;
934,975 GPUs and 118,200 CPUs are awaiting verification.
GPU rental prices range from $0.1 to $1 per hour, significantly lower than traditional service providers like Amazon.
For Render Network:
Currently, 34,458,085 rendering frames have been completed;
Active nodes have reached 5,600. Render Network requires service providers to participate only after being whitelisted.
Despite lower prices, projects like Io.net and Render Network's competitive advantage lies not just in pricing. These platforms form competitiveness by integrating multiple resources, but due to lack of stability, large clients (such as those needing long-term high computing power support) still tend to choose traditional solutions that follow standardized processes.
Currently, the success of Io.net and Render Network largely relies on token incentive mechanisms. Whether it can attract users through the product itself still needs time to verify.
2. Build a more sustainable economic model
A more sustainable economic model helps projects better control risks, avoid oversupply, and effectively create new demands to attract capital inflows.
In terms of economic design, multiple projects have attempted different strategies, each with its own advantages and disadvantages.
Classification of DePIN projects and choices of ecosystems
Two key factors of DePIN projects are tokens and network ecosystems. Choosing the right blockchain ecosystem is crucial for optimizing user experience.
Current mainstream ecosystems
Initially, most DePIN projects were built on Ethereum, as Ethereum, being an ecosystem that supports smart contracts, attracted the most value. However, over time, Solana has become a new popular choice for DePIN projects due to its advantages of fast speed and low cost. For example, Helium transitioned from other blockchains to Solana. Additionally, emerging DePIN projects have started to appear in other ecosystems.
Currently, many DePIN projects operate on multiple ecosystems simultaneously, due to reasons including:
Projects integrate their products across multiple networks (e.g., The Graph).
Certain projects combine traditional products with tokenization, where these tokens are issued on different networks.
Main application areas of DePIN
DePIN is a broad field that covers various application scenarios. Currently popular areas include:
Computing: Provide a computing power market for clients in need.
Mobility: For example, Hivemapper records videos through moving cars to provide data for creating 3D street maps.
Storage: Provide a storage environment for clients in need.
In addition, DePIN is also applied in fields such as environment, energy, and the Internet of Things (IoT).
Due to the diversity of application scenarios, it is challenging to evaluate the overall effectiveness of DePIN projects with a unified standard. Even within the same field (such as computing), there may be different sub-directions. For instance, Io.net provides general-purpose GPUs, while Render Network focuses on graphics processing.
Expectations for the future of DePIN
With the rapid development of the technology field, more innovative DePIN projects may emerge in the future to meet new demands. For example:
Address the demands in the AI field;
Meet the computing needs of blockchain;
Connect global intelligent resources, breaking geographical and process limitations of traditional markets. For example, Certik once proposed a concept for a security service market, allowing freelance security experts to earn income by auditing projects.
Although these DePIN projects may not be perfect compared to traditional giants, their ease of use and token incentives may attract specific user groups.
In the future, with the diversified development of DePIN projects, this field will welcome more innovations. These projects can attract not only cryptocurrency users but also non-cryptocurrency users to participate.
Summary
Current DePIN is no longer just old projects that incorporate token elements, but truly groundbreaking solutions that meet new demands. With the emergence of more innovative models, DePIN will present diversified development in the future. This not only injects fresh blood into the cryptocurrency market but also brings new challenges for investors.
