DePIN: The Key Infrastructure of Web3

Decentralized Physical Infrastructure Network (DePIN) is an innovative model for the deployment and maintenance of physical infrastructure. It is built collaboratively by globally distributed individuals and businesses and is open for use by everyone. Participants can receive corresponding economic compensation and token incentives by contributing physical infrastructure nodes. DePIN utilizes technologies such as cryptography, the internet, the Internet of Things, and blockchain to achieve a more efficient, decentralized, and fair method of infrastructure deployment.

The Importance of DePIN to Web3

Although Web3 has developed applications such as DeFi, gaming, NFTs, social networking, and physical assets on the foundation of Layer 1 and Layer 2, these applications still rely on centralized cloud services and data centers as internet infrastructure. There have been incidents in the industry where the failure of large cloud platforms led to the loss of data for Web3 projects, as well as cases where regulatory sanctions prevented certain Web3 projects from using centralized services.

Therefore, DePIN has become an indispensable infrastructure for realizing true Web3. Although DePIN projects may not occupy a significant market share and may not necessarily have performance advantages, their existence can ensure the normal operation of Web3 and cryptocurrency projects, enhancing their robustness.

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

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

Characteristics and Classification of DePIN

The industrial logic of DePIN includes the following key roles:

• Device providers: Provide physical device resources (such as GPU, CPU, memory, storage space, etc.) and receive token rewards.
• DePIN Protocol: Build a distributed network, design token incentives for device providers, and allow network users to pay.
• Network users: Access the DePIN protocol, use the services and pay, usually more cost-effective than centralized infrastructure.

The DePIN project is mainly divided into categories such as decentralized storage, computing, CDN, VPN, WiFi, and 5G networks.

Most DePIN projects have three basic components:

1. Physical Infrastructure: A distributed network of physical devices built and maintained in the real world.
2. Off-chain computing infrastructure: middleware used to capture, analyze real-world data, and calculate user contributions.
3. Blockchain and Tokens: Blockchain serves as a tamper-proof ledger, a device registry, and a task scheduling platform; tokens are used to incentivize network contributors, serve as a currency for service pricing, and sometimes act as staking assets.

DePIN Project Case

decentralized storage network

A well-known decentralized storage network is the largest distributed storage system in the world, with over 3,800 storage providers and a total storage capacity exceeding 17M TB. The network is committed to bringing open and verifiable features to the three core pillars of the data economy (storage, computing, content distribution). Recently, the network also launched virtual machine functionality, with more than 1,100 smart contracts deployed and over 80,000 wallet addresses interacting with these dApps.

Decentralized GPU Rendering Platform

A decentralized GPU rendering platform 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

An open-source protocol incentivizes global users to collaboratively build wireless networks. This protocol uses a native cryptocurrency that can be converted into data credits for transmitting device data. Based on this protocol, application cases such as IoT and 5G networks have been established. According to reports, this network has deployed nearly one million hotspots in over 77,000 towns across 192 countries in just three years. Its 5G network is also rapidly growing, with over 8,000 5G base stations deployed in less than a year, and approximately 100,000 devices connected to the network.

decentralized live video broadcasting platform

A decentralized live video broadcasting platform offers innovation and autonomy to developers and creators. The platform incentivizes nodes to contribute GPU and bandwidth through a cryptoeconomic protocol, participating in real-time video encoding and distribution services.

decentralized video streaming network

A decentralized video streaming platform based on blockchain technology 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. The network consists of two subsystems: blockchain and edge network, responsible for payments, rewards, smart contract functions, and the storage and delivery of media assets.

Summary

DePIN, as an early-stage development track, has seen significant expansion in the past two years. According to a certain research institution, the total potential market size of the DePIN industry is approximately $2.2 trillion, and it could reach $3.5 trillion by 2028. Currently, the fully diluted valuation of all decentralized physical infrastructure projects is only $5 billion, indicating tremendous growth potential.