DePIN: The Rise of Decentralized Physical Infrastructure Networks

DePIN (Decentralized Physical Infrastructure Network) is leading a paradigm revolution in infrastructure deployment and maintenance. This innovative model is built in a distributed manner by individuals and enterprises from around the globe, open for use by everyone. In return, contributors of these physical infrastructure nodes can receive economic compensation and token incentives. DePIN achieves a more efficient, decentralized, and fair method of infrastructure deployment by combining cryptography, the internet, the Internet of Things, and blockchain technology.

DePIN: Key Infrastructure of Web3

Despite the fact that Web3 has developed a variety of application scenarios such as DeFi, gaming, NFTs, social networking, and physical assets based on Layer1 and Layer2, these Web3 applications still rely on centralized cloud services and data centers as internet infrastructure. This dependence leads to a series of potential risks, such as data loss, service interruptions, and access restrictions. Therefore, the emergence of DePIN is crucial for achieving true Web3.

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

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

Characteristics and Classification of DePIN

The industrial logic of DePIN includes three key roles:

1. Device Provider: Provides physical device resources (such as GPU, CPU, memory, storage space, etc.) and receives token rewards.
2. DePIN Protocol: Build a decentralized network, design token incentives for device providers, and allow network users to pay.
3. DePIN Network Users: Access the DePIN protocol, use services and pay, usually more cost-effective than centralized physical infrastructure.

DePIN projects can generally be divided into categories such as decentralized storage, computing, CDN, VPN, WiFi, and 5G networks. Most DePIN projects have three basic components: physical infrastructure, off-chain computing infrastructure, and blockchain and token systems.

DePIN Project Case

Filecoin: Decentralization storage network

Filecoin is the world's largest decentralized storage network, with over 3,800 storage providers contributing more than 17M TB of storage capacity. The Filecoin Virtual Machine launched this year has seen over 1,100 smart contracts deployed, with more than 80,000 wallet addresses interacting with these FVM-driven dApps.

Render Network: Decentralization GPU rendering platform

Render Network is a decentralized GPU rendering platform for distributed GPU computing in the 3D rendering and AI industries. In the first half of 2023, the platform completed over 4.6 million rendering jobs, with an average cost of $20, which offers a certain price advantage compared to many centralized platforms.

Helium: Decentralization wireless network protocol

Helium is an open-source protocol that incentivizes users worldwide to collaboratively build a wireless network. Based on the Helium protocol, demonstration cases such as LongFi (IoT network) and Helium Mobile (5G network) have been constructed. It is reported that the Helium network has deployed nearly 1 million hotspots, 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 to 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 to share excess computing power and bandwidth resources through tokens, serving as cache or relay nodes for video streams, improving video quality and reducing distribution costs.

Industry Outlook

The DePIN industry has been gradually developing since its early stages, 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 is expected to reach around $3.5 trillion by 2028. Currently, the FDV (Fully Diluted Valuation) of all decentralized physical infrastructure projects is only $5 billion, indicating enormous growth potential.