DePIN: The Indispensable Infrastructure of Web3

Decentralized Physical Infrastructure Network (DePIN) is an innovative model for the deployment and maintenance of infrastructure. It is built in a decentralized manner by individuals and organizations from around the world for public use. In return, contributors of these physical infrastructure nodes can receive economic compensation and token incentives. DePIN achieves a more efficient, decentralized, and equitable infrastructure deployment method by combining cryptographic technology, the internet, the Internet of Things, and blockchain.

The Importance of DePIN for Web3

Although Web3 has developed application scenarios such as DeFi, gaming, NFTs, social networking, and physical assets on top of Layer 1 and Layer 2, these applications still rely on centralized cloud services and internet infrastructure like data centers. This dependence leads to some potential risks, such as data loss, service interruptions, and access restrictions.

Therefore, DePIN has become an essential infrastructure for achieving a true Web3. Although DePIN projects may not dominate market share and may not have advantages in performance, their existence can enhance the robustness of Web3 and crypto projects, ensuring their normal operation under various circumstances.

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

1. Low participation cost: Leverage the collective resources of network participants to reduce management fees and expenses.
2. Network Robustness: Provide more resilient and secure infrastructure to reduce the risk of single points of failure.
3. Open competition and innovation: Eliminate the high capital and large-scale entry barriers of traditional infrastructure networks to promote the emergence of small-scale new participants.

Characteristics and Classification of DePIN

The operation model of DePIN includes three main roles:

1. Device Provider: Provides physical device resources (such as GPU, CPU, memory, storage space, bandwidth, WiFi hotspots, etc.) and receives token rewards.
2. DePIN Protocol: Build a distributed network, design a token incentive mechanism, and provide services for network users.
3. Network Users: Access the DePIN protocol, use the services, and pay fees, which are usually more cost-effective than centralized infrastructure.

The DePIN project is mainly divided into the following categories: decentralized storage, decentralized computing, CDN, VPN, WiFi, and 5G networks, etc.

Most DePIN projects have three basic components:

1. Physical infrastructure: Build and maintain a distributed network of physical devices.
2. Off-chain computing infrastructure: used to capture and analyze real-world data, calculating user contributions.
3. Blockchain and Tokens: As tamper-proof ledgers, device registries, and incentive mechanisms.

DePIN Project Case

decentralized storage network

A certain global largest distributed storage network has over 3,800 storage providers, contributing more than 17M TB of storage capacity. The network is dedicated to bringing open and publicly verifiable features to the three core pillars of the data economy (storage, computing, content distribution).

Decentralized GPU Rendering Platform

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. In the first half of 2023, the platform completed over 4.6 million frames of rendering jobs, with an average cost of 20 dollars, which offers a certain price advantage compared to many centralized platforms.

Decentralized Wireless Network Protocol

This is an open-source protocol that incentivizes global users to collaboratively build wireless networks. The protocol supports multiple subnetworks, including IoT and mobile networks. It has been reported that the network deployed nearly 1 million hotspots in just three years, covering over 77,000 towns in 192 countries. Its 5G network is also rapidly growing, having deployed over 8,000 5G Radios in less than a year.

decentralized live video broadcasting platform

A network that provides video infrastructure for live and on-demand streaming. It incentivizes nodes to contribute GPU and bandwidth through an economic protocol, providing developers with creative freedom and creators with platform autonomy.

decentralized video streaming network

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 stream quality and reducing distribution costs.

Summary

DePIN is a track that has been developing since the early days of the industry and has seen rapid growth in recent years. According to a research institution, the total potential market size of the DePIN industry is approximately $2.2 trillion, and it may reach about $3.5 trillion by 2028. Currently, the fully diluted valuation of all decentralized physical infrastructure projects in the crypto industry is only $5 billion, indicating a huge growth potential.