The Rising Narrative: A Glimpse into the Present and Future of DePIN

Introduction

The Internet, as a symbol of globalization, is actually a product of the peak period of the Cold War. In 1969, the U.S. military aimed to establish a network that could avoid centralized single points of failure and autonomously recover in response to potential nuclear strikes. Thus, the prototype of the Internet, "ARPAnet" (, was born. It adopted a decentralized, fully distributed architecture, enabling direct connections between terminals.

However, 55 years have passed, from Web1 to Web2, and while the internet has been rapidly developing, it has gradually formed a centralized architecture of "terminal connecting to server" amidst the waves of commercialization and globalization, which is contrary to its original intention. The Web2 giants have carved out their own territories in their respective platform ecosystems, controlling the discourse and value distribution in the online world.

In recent years, the Web3 wave, centered around the concepts of decentralization and de-platforming, has been on the rise. However, achieving decentralization solely at the application level is not enough; it is also necessary to fundamentally overhaul the underlying technology stack of the internet to disrupt the efficiency and security issues brought about by the overly centralized Web2 model.

In this context, DePIN may offer a new approach worth paying attention to: by combining the financial attributes and incentive mechanisms of Web3, DePIN can build an efficient P2P physical resource network, create a "decentralized physical network infrastructure", and provide programmable capabilities to the network, achieving an upgrade of "DePIN+" and constructing a brand new internet architecture.

At the same time, the explosion of AI in the Web3 field has not only injected new vitality into it but also witnessed the trend of blockchain applications expanding from on-chain activities to the real world, such as RWA, AI, DePIN, etc. The narrative of DePIN means that the boundaries between physical reality and the ever-expanding blockchain world are gradually blurring. Next, let’s explore the current status and future development of DePIN together.

![The Rising Narrative: A Glimpse into the Present and Future of DePIN])https://img-cdn.gateio.im/webp-social/moments-961ca77024666f97d2c6a383495dfe71.webp(

Part.1 Overview of DePIN: What & Why

) What is DePIN?

The concept of DePIN has been widely discussed, but it is still necessary to rearticulate it from an organizing perspective, focusing on the basic operating model of DePIN. By definition, 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 connecting hardware with blockchain. This community-driven model is more flexible than traditional point-based resource management and has greater scalability and robustness.

Generally speaking, a complete DePIN network consists of project parties, off-chain physical devices, suppliers, and demanders, and the basic operating mode can be divided into five steps:

1. Off-chain hardware devices: usually provided or required by the project party, mainly divided into:

• Customized dedicated hardware: For example, a certain network requires users to purchase third-party manufactured dedicated hardware hotspots to provide signals for nearby IoT devices and earn mining rewards; a certain project encourages users to contribute to the mapping network through its dedicated dashcam.

• Professional-grade hardware: Idle computers equipped with GPU and CPU chips can start participating in computing power/data supply simply by downloading a browser plugin. For example, in a certain project, all owners of idle GPU devices only need to download its mining program and set up a mining node to start earning mining rewards through shared computing power. A certain network has specified that the minimum requirement for connecting devices is the Nvidia GeForce RTX 3050.

• Smart mobile devices: represented by lightweight mobile devices such as smartphones, smartwatches, wristbands, and even rings, joining the DePIN network in two ways: running node programs to become the control end of DePIN hardware; directly providing sensor data or computing resources. For example, a project uses the built-in microphone of people's smartphones to map dynamic noise pollution around the world; another project leverages the storage space of old phones to build a decentralized cloud that anyone can contribute to.

2. Proof: Data generated by physical devices needs to be uploaded to the on-chain through off-chain infrastructure, recorded on a tamper-proof blockchain ledger, providing stakeholders with transparent and auditable infrastructure operation records, to prove that they have made certain efforts as required to obtain incentives. This verification method is called Physical Work Proof)PoPW(.

3. Identity Verification: After the data is verified, the on-chain account address of the device owner needs to be checked, typically using public and private keys for identity verification. The private key is used to generate and sign physical work proofs, while the public key is used externally to verify the proof or serves as the identity tag for the hardware device )Device ID(.

4. Reward Distribution: After verifying the data, the token rewards obtained from off-chain physical devices will be sent to the on-chain address, which involves the token economics of DePIN. Token economics, as the economic foundation of the data value network, is the key to whether the DePIN project can operate successfully.

• BME: Token burn mechanism, users on the demand side will burn tokens after purchasing services, and the degree of deflation is determined by demand; in other words, the stronger the demand, the higher the value of the tokens.

• SFA: Requires supply-side users to stake tokens to become qualified miners. The supply determines the degree of deflation, meaning the more miners providing services, the higher the value of the tokens.

5. Demand Matching: A DePIN market platform where both buyers and sellers can purchase, sell, and lease to complete the exchange and matching of resources; at the same time, the DePIN market provides real-time market data, including asset prices, historical performance, and energy production data, which helps ensure fair pricing and is typically managed by the decentralized autonomous organization )DAO(, allowing stakeholders to participate in the decision-making process.

![The Rising Narrative: A Glimpse into the Present and Future of DePIN])https://img-cdn.gateio.im/webp-social/moments-ada04ecc5a29b145ca35f9cb316776ba.webp(

) Why do we need DePIN?

Let me give you a simple example. Noise pollution is a common phenomenon in urban life. Quantifying noise pollution data is not only commercially valuable for real estate developers, hotels, restaurants, and other businesses, but it also has reference significance for urban planning and academic research. But would you allow a private company to install microphones all over your city? Or imagine the initial costs of doing so, how far can its coverage expand? How fast can it expand?

If this is a user-initiated noise detection network, everything becomes much simpler. For example, a certain project deploys noise pollution sensors through the download of its application on users' mobile phones. Mobile users establish a global measurement network by providing accurate, hyper-local noise pollution data and receive token rewards in return. Meanwhile, the platform profits by selling noise pollution data.

This is one of the meanings of DePIN. In traditional physical infrastructure networks like communication networks, cloud services, and energy networks ###, due to the enormous capital investment and operating maintenance costs, the market is often dominated by large companies or giants. This centralized industrial characteristic brings several major dilemmas and challenges:

• Centralized Control: Controlled by centralized institutions, there is a risk of single point of failure, it is vulnerable to attacks, and transparency is low, users have no control over data and operations.

• High entry barriers: New entrants need to overcome significant capital investments and complex regulatory thresholds, which limit market competition and innovation.

• Resource waste: Due to centralized management, there is a phenomenon of resource idleness or waste, leading to low resource utilization.

• Insufficient incentive mechanism: There is a lack of effective incentive mechanisms, resulting in low enthusiasm among users to participate and contribute network resources.

The core value of DePIN can be summarized in the following four points:

• Resource Sharing and Digitalization: Transforming idle physical resources ( such as storage, communication, and computing power ) into tradable digital assets in a decentralized manner;

• Decentralized Governance: Based on open protocols and cryptoeconomic models, users contribute capital, assets, and labor towards a common goal, and are rewarded with transparent and fair incentives.

• On-chain settlement: Blockchain reduces costs by becoming a single source of a shared ledger for all market participants.

• Innovation: In an open, permissionless global ecosystem, the speed of experimentation is an order of magnitude higher than that of centralized infrastructure.

( Current Status of DePIN Development

Track: As an early field in blockchain development, DePIN has a longer development time. The first batch of projects established, such as the decentralized network Helium and decentralized storage solutions like Storj and Sia, have primarily focused on storage and communication technologies.

However, with the continuous development of the Internet and the Internet of Things, the requirements for infrastructure and the demand for innovation are increasing. The DePIN projects mainly expand into areas such as computing power, data collection and sharing, wireless, sensors, energy, and so on. However, looking at the top 10 projects by market capitalization in the DePIN field, most of them belong to the storage and computing power sector.

AI is the keyword for DePIN in this cycle. Due to the natural suitability of DePIN for the decentralized sharing needs of AI data and computing power, a number of AI DePIN projects have emerged, aiming to integrate resources such as computing, storage, networking, and energy on a global scale, providing underlying infrastructure support for the training, inference, and deployment of AI models.

Market Size: According to data from a certain platform, the number of DePIN projects that are currently online has reached 1,561, with a total market value of approximately $22 billion; regarding the total potential market size of the DePIN sector, a certain institution made a forecast: by 2028, the DePIN market size could exceed $3.5 trillion, and it may contribute an additional $10 trillion to the global GDP over the next decade, reaching $100 trillion ) in ten years.

L1/L2: Due to high throughput and low gas fees, current DePIN projects are mainly concentrated on deploying on the Solana public chain, as well as DePIN-specific chains like IoTex and Peaq. Meanwhile, Polygon and Arbitrum are gradually becoming rising stars.

As the hardware supply chain has become very mature, project parties do not need to invest a lot of research and development effort. Therefore, according to the focus direction, the current DePIN projects are divided into two directions: one focuses on the middleware of DePIN; the other focuses on the expansion of the demand side of DePIN.

![The Rising Narrative: A Glimpse into the Present and Future of DePIN]###https://img-cdn.gateio.im/webp-social/moments-001b93fa6c8423f59599d22bbfba2fb7.webp(

Part.2 DePIN Middle Layer

DePIN-related IoT devices need to be massively integrated into the blockchain, which presents technical challenges and liquidity pressures, such as hardware design and production, how to achieve trustworthy transmission and data processing of off-chain data on-chain, and tokenomics design. As a result, the DePIN track has derived middleware that connects devices and the DePIN network, involving aspects of connectivity and bidirectional services, aimed at helping project parties quickly launch DePIN application projects, providing them with development frameworks, developer tools, overall solutions, and more.

It not only includes developer-friendly tools and one-stop services like DePHY and Swan; it also has the re-staking protocol Parasail specifically serving DePIN, aimed at enhancing the liquidity and value utilization of the native tokens of the DePIN network.

) DePIN infra

• DePHY: Aims to provide open-source hardware solutions, SDKs, and tools for DePIN projects, and reduce the manufacturing and network messaging costs of hardware products bridging blockchain through off-chain network nodes running at 500ms level synchronized with the blockchain.

• W3bStream: The off-chain computing protocol W3bstream allows IoTeX DePIN projects to easily generate logic based on smart device data and trigger blockchain operations. Some well-known IoTeX-based DePIN projects include Envirobloq, Drop Wireless, and HealthBlocks.

Currently, with the increase in DePIN projects that provide frameworks and solutions, DePIN application layer projects based on their infrastructure are also gradually emerging, such as EnviroBLOQ based on IoTeX's Pebble, Dimo and Drife based on W3bstream, and Starpower and Apus Network based on DePHY, among others.

( liquidity plan

• PINGPONG is a DePIN liquidity and service aggregator that optimizes and maximizes multiple networks through innovative tools and solutions.