DePIN: A New Paradigm for Decentralized Physical Infrastructure

Decentralized Physical Infrastructure Networks (DePIN) is an innovative model for the deployment and maintenance of infrastructure. It is built in a distributed manner by individuals and businesses from around the world, open to all users. In return, contributors of these physical infrastructure nodes can receive economic compensation and token incentives. DePIN achieves a more efficient, decentralized, and equitable method of infrastructure deployment through the combination of cryptography, the internet, the Internet of Things, and blockchain.

The Importance of DePIN for Web3

Although Web3 has developed application scenarios such as DeFi, games, NFTs, social networking, and physical assets on the basis of Layer 1 and Layer 2, it still relies on centralized cloud services and data centers as internet infrastructure. This reliance has led to some issues, such as data loss due to outages of large cloud platforms or certain projects being unable to obtain services due to regulatory restrictions. Therefore, DePIN has become an indispensable infrastructure for achieving a truly meaningful 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 fees and expenses are reduced.
2. Network Robustness: Provide more resilient and secure infrastructure that is less susceptible to single points of failure.
3. Open competition and innovation: Eliminating high capital and large-scale entry barriers of traditional infrastructure networks is conducive to the participation of small-scale new entrants.

Characteristics and Classification of DePIN

The industrial logic of DePIN mainly includes the following roles:

• Device Provider: Provides physical device resources and earns token rewards.
• DePIN Protocol: Build a distributed network, design a token incentive mechanism, and provide services for network users.
• Network users: Access the DePIN protocol, use the services, and make payments.

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

Most DePIN projects consist of three basic components:

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

DePIN Project Case

Filecoin: Decentralization storage network

Filecoin is the world's largest distributed storage network, with over 3,800 storage providers and a total storage capacity exceeding 17M TB. It aims to bring open, publicly verifiable features to 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 jobs with users who have idle GPUs, primarily serving the distributed GPU computing needs of the 3D rendering and AI industries.

Decentralization wireless network protocol

An open-source protocol incentivizes global users to collaboratively build wireless networks. The native cryptocurrency of this protocol can be used to generate data points, which are crucial for transmitting device data, and it has a stable dollar value. Based on this protocol, long-range IoT networks and 5G network demonstration cases have been built.

Decentralization live video broadcasting platform

A network platform that provides video infrastructure for live and on-demand streaming. It incentivizes nodes to contribute GPU and bandwidth in real-time video encoding and distribution services through a cryptoeconomic protocol, offering developers creative freedom and providing creators with platform autonomy.

Decentralization video streaming network

A decentralized video streaming platform based on blockchain technology that incentivizes individual users with tokens to share excess computing power and bandwidth resources, serving as cache or relay nodes for video streams, improving video quality and reducing distribution costs.

Summary

DePIN, as a track that has been developing since the early stages of the industry, has seen significant expansion in recent years. According to research institutions, the total potential market size of the DePIN industry is estimated to be around $2.2 trillion, and it could reach approximately $3.5 trillion by 2028. In contrast, the fully diluted valuation of all decentralized physical infrastructure projects currently stands at only $5 billion, highlighting the enormous growth potential.