DePIN: The Indispensable Decentralized Physical Infrastructure of Web3

Decentralized Physical Infrastructure Networks (DePIN) are an innovative model for the deployment and maintenance of infrastructure. They are built in a distributed manner by individuals and businesses from around the world, open for everyone to use. In return, contributors of these physical infrastructure nodes can receive economic compensation and cryptocurrency incentives. DePIN utilizes cryptographic technology, the internet, the Internet of Things, and blockchain technology to achieve a more efficient, decentralized, and equitable method of infrastructure deployment.

DePIN is the key infrastructure for realizing true Web3

Although Web3 has developed application scenarios such as DeFi, gaming, NFTs, social networking, and RWA on Layer1 and Layer2, these applications still rely on centralized cloud services and data centers as internet infrastructure. There have been incidents in the industry where data loss of Web3 projects was caused by large cloud platforms going down, as well as situations where centralized service providers could not provide services for certain Web3 projects due to regulatory sanctions.

Therefore, DePIN is crucial for achieving true Web3. Although DePIN projects may not dominate market share and may not have performance advantages, their existence may ensure the normal operation of Web3 and crypto projects one day in the future, enhancing their robustness.

Compared to traditional centralized physical infrastructure networks, DePIN has the following advantages:

1. Low participation cost: By leveraging the collective resources of network participants, management costs and expenses are reduced.
2. Network Robustness: Provide a more resilient and secure infrastructure that is less susceptible to single points of failure.
3. Open competition and innovation: Eliminating the high capital and large-scale entry barriers of traditional infrastructure networks facilitates the emergence of small-scale new participants.

Features and Classification of DePIN

The industrial logic of DePIN is simple and clear, mainly including the following key roles:

• Device providers: Provide physical device resources (such as GPU, CPU, memory, storage space, RAM, bandwidth, Wifi hotspots, etc.) to earn cryptocurrency rewards.
• DePIN Protocol: Build a distributed network, design incentive mechanisms for device providers, and allow network users to pay.
• Network users: Access the DePIN protocol, use services and pay, enjoying more favorable prices compared to centralized infrastructure.

DePIN projects can be roughly divided into the following categories: Decentralization storage, Decentralization computing, CDN, VPN, WiFi, 5G networks, etc.

Most DePIN projects have three basic components:

1. Physical infrastructure: Build and maintain in the real world to create a decentralized network.
2. Off-chain computing infrastructure: used to capture and analyze real-world data, calculate user contributions.
3. Blockchain and cryptocurrency: serving as a tamper-proof ledger, device registry, task statistics and scheduling platform, while also providing incentive mechanisms.

DePIN Project Cases

Filecoin: Decentralization storage network

Filecoin is the world's largest distributed storage network, with over 3,800 storage providers offering more than 17 million TB of storage capacity. It is committed to bringing the open, publicly verifiable characteristics into the three core pillars of the data economy: storage, computation, and content distribution.

Render Network: Decentralization GPU rendering platform

Render Network is a decentralized GPU rendering platform that connects users in need of rendering services with users who have idle GPUs, primarily serving the distributed GPU computing needs of the 3D rendering and AI industries.

Helium: Decentralization wireless network protocol

Helium is an open-source protocol that incentivizes global users to collaboratively build a wireless network. HNT is the native cryptocurrency of the Helium Network, used to generate data credits, which are crucial for transmitting device data. Helium has deployed nearly 1 million hotspots in just three years, covering over 77,000 towns in 192 countries.

Livepeer: Decentralization live video broadcasting platform

Livepeer is a video infrastructure network for live and on-demand streaming that incentivizes nodes to contribute GPU and bandwidth for real-time video encoding and distribution services through a cryptoeconomic protocol.

Theta: Decentralization video streaming network

Theta is a decentralized video streaming platform based on blockchain technology that incentivizes individual users through cryptocurrency to share excess computing power and bandwidth resources, acting as cache or relay nodes for video streams, thereby improving video stream quality and reducing video distribution costs.

Summary

DePIN is a track that has been gradually developing since the early days of the industry, with significant expansion in the past two years. According to research, the total potential market size of the DePIN industry is approximately $2.2 trillion, and it could reach about $3.5 trillion by 2028. Currently, the fully diluted valuation of all decentralized physical infrastructure projects is only $5 billion, indicating tremendous growth potential.