Decentralization Infrastructure Network DePIN: Current Status and Future Outlook

Introduction

The development of the Internet illustrates the shift from the idea of Decentralization to centralized practices. Originally born during the Cold War, the Internet aimed to create a distributed, resilient communication network. However, with the growth of commercialization, the Internet gradually formed a platform-centric centralized architecture, which is contrary to its original design intent.

In recent years, the Web3 wave has reintroduced the concepts of Decentralization and De-platforming, attempting to change the existing internet architecture. Against this backdrop, the Decentralized Physical Infrastructure Network ( DePIN ) has emerged, combining the financial attributes and incentive mechanisms of Web3 to construct an efficient P2P physical resource network, providing new ideas for the reconstruction of internet infrastructure.

The rise of DePIN also marks the expansion of blockchain applications from purely on-chain activities to the real world. Let us take a look at the current state of DePIN and look forward to its future development prospects.

1. Overview of DePIN

What is DePIN?

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 "resource sharing + economic incentive" bilateral market by combining hardware with blockchain. This community-driven model is more flexible than traditional point-based resource management, with greater scalability and robustness.

A complete DePIN network usually consists of the following components:

1. Off-chain physical devices: can be dedicated hardware, professional-grade equipment, or smart mobile devices.

2. Proof mechanism: Verify the workload of the device through physical work proof ( PoPW ).

3. Identity verification: Use public and private keys to verify the identity of the device owner.

4. Reward Distribution: Token rewards will be distributed to device owners based on their contribution.

5. Demand Matching: Build a market platform for transactions between supply and demand parties.

Why is DePIN needed?

Traditional physical infrastructure networks have the following issues:

• Centralized control, with a risk of single point of failure
• High market entry barriers restrict innovation
• Low resource utilization, resulting in waste
• Lack of effective user participation incentive mechanisms

The core value of DePIN lies in:

• Resource Sharing and Digitalization
• Decentralization Governance
• On-chain settlement
• Fast innovation speed

Current Status of DePIN Development

Currently, DePIN projects are mainly focused on storage, computing power, wireless networks, sensors, energy, and other fields.

According to the data, the number of launched DePIN projects has exceeded 1,500, with a total market value of approximately $22 billion. It is expected that by 2028, the DePIN market size could exceed $35 trillion.

From the perspective of public chain distribution, DePIN projects are mainly deployed on public chains such as Solana, IoTex, Polygon, and Arbitrum.

Current DePIN projects are mainly divided into two categories: one focuses on intermediate layer infrastructure, and the other focuses on demand-side application expansion.

2. DePIN Middle Layer

The DePIN intermediary layer mainly includes two types of projects:

DePIN Infrastructure

• DePHY: Provides open-source hardware solutions, SDKs, and tools for DePIN projects.
• W3bStream: Allows the IoTeX DePIN project to generate logic based on smart device data.

Liquidity Program

• PINGPONG: DePIN Liquidity and Service Aggregator
• Parasail: A re-staking protocol specifically serving DePIN

3. DePIN Application Layer

DePIN application layer projects are mainly divided into four categories:

Cloud Network

Including Decentralization storage and computing:

• Storage: Filecoin, Arweave, etc.
• Computing power: Render Network, io.net, PinGo, etc.

Wireless Network

including 5G, WiFi, Bluetooth, LoRaWAN, etc:

• 5G:Pollen Mobile
• WiFi: Wicrypt, Roam
• LoRaWAN:Helium

sensor

Mainly used for monitoring data such as environment, geographical location, and health:

• Environment: WiHi
• Geography: HiveMapper

Energy

Including applications such as energy sharing and charging:

• Starpower: Decentralization Virtual Power Plant
• Powerpod: Decentralization Charging Station Network
• Arkreen: Renewable Energy Data Services

4. Future Development Trends of DePIN

deeply integrated with Web2 application scenarios

DePIN is expected to be widely applied in areas such as the Internet of Things, smart cities, and energy sharing.

Hardware threshold lowered

Transition from professional-grade equipment to consumer-grade products, such as smartphones, watches, rings, etc.

Financialization

Including innovative solutions such as staking liquidity pools, asset securitization, and data asset financial products.

Deep integration with AI technology

DePIN provides computing power, data, and other resources for AI, while AI helps optimize the DePIN network.

faces challenges

• High complexity of technical implementation
• Market acceptance needs to be improved
• The profit model is uncertain.
• Regulatory Risk

5. Key Factors for Evaluating DePIN Projects

Hardware

• Self-made vs Third-party
• One-time vs Ongoing Costs
• High Density vs Low Density
• Scarce vs Common Resources

Token Economics Design

• BME vs SFA model
• Token Empowerment Mechanism
• Liquidity Management

Summary

DePIN reshapes the resource allocation model through Web3 and token economics, showcasing the tremendous potential to reconstruct internet infrastructure. It integrates idle resources globally, improves resource utilization efficiency, and enhances the resilience of infrastructure.

Despite the numerous challenges DePIN faces in technology, market, and regulation, it has established the foundational conditions for large-scale applications with the improvement of blockchain performance and the refinement of token economic models. In the future, DePIN is expected to become an important force in driving the transformation of internet infrastructure.