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Introducing DePIN: A Top Line Overview

January 12, 2024

In conclusion

WTF is DePIN?!

Is this just another ponzi acronym that has come to light in the past few months? Or is it something really worth paying attention to? I tend to think the latter, and the numbers agree!

When your normie mates laugh at you for spending all your time staring into a screen to find the next 1000x gem in an ecosystem full of pointless, useless tokens, you can simply tell them that DePIN is the real deal. 

Decentralized Physical Infrastructure Networks, or DePIN, turn the tides on those who think crypto has no real-world use cases, and these use cases are plenty.

Everything from mapping protocols to GPU rendering, AI data training, rideshare platforms, mobile and internet protocols, and file storage… man, the list just goes on and on.

Why does DePIN matter?

In a world dominated by big tech and centralized mega corporations, your personal data has become the new currency the world runs on. These large organizations spend billions of dollars harvesting this data by tracking where you go, what you eat, who you talk to and what you do online. Kinda creepy when you really think about it. 

When we look at any current physical infrastructure model, most of it comes down to the harvesting of our data to gain a competitive advantage, and this leads to certain companies practically running the world we live in. As with most things in life, decentralization is just better. 

As more people around the globe wake up to this fact, they naturally become more sceptical of these big tech giants and mega-corporations and will likely look for better, friendlier, cheaper, more secure and easier-to-access alternatives. Add to this the fact that most of these DePIN protocols give users and providers the opportunity to earn while they use it, and suddenly, the crypto DePIN space becomes a no-brainer. 

This underlying principle of most DePIN projects to reward builders, users, and service providers creates an increasing value flywheel, which in turn attracts more builders, users and providers that then drive value back to the protocol and its investors (that's you!). The real world aspect of these projects means that even those who have never set foot in the cryptosphere can see the value it provides without even having to realize the technology behind it all.

DePIN categories and advantages

The term DePIN covers a vast array of sectors that can be roughly broken down into physical resource networks and digital ones. 

A physical resource network can be thought of as something that requires the use of specific hardware to offer its decentralized infrastructure. Think modems for WiFi and cellular networks, cameras for mapping networks, solar panels for energy networks, vehicles for ride-share networks and even receivers for decentralized satellite networks. 

In the past, this physical infrastructure would be owned by a single centralized entity like the state or a major corporation, which would accrue all the value derived from these networks for themselves, at the expense of the user. However, using the DePIN model, this hardware can be installed and run by everyday people who all add value and security to the network and, in most cases, are paid by the network to do so. 

Starting to see the advantages yet?

Because these networks are accessible to anyone, anywhere, there is no large barrier to entry and users and providers can grow these networks from anywhere in the world. Because the entry and, more specifically, the cost barriers are reduced by deploying networks in this fashion, they are much more self-sustainable than the traditional centralized network models we have grown accustomed to. 

Digital resource networks also require hardware in many cases but often already existing hardware like compute power, database and file storage, as well as internet bandwidth. By making use of these already existing resources, both users and providers can earn income by maximizing the utility of what they already own instead of paying for idle resources.

By leveraging already existing hardware and devices to run decentralized networks, we end up with a win-win situation for both the service provider and the end user. This allows for a more cost-effective, energy-efficient, scalable digital infrastructure than the traditional centralized model where Amazon and Google clean out your wallet and profit off your data to achieve world domination.

Top DePIN Projects

The DePIN space is growing rapidly, and an impressive number of protocols are being built. In the previous cycle, DePIN proved to have the most sustainable revenue models of any crypto sector. A recent Messari report on DePIN predicts that the flywheel is so powerful it could add $10 trillion to global GDP over the next decade. Next time you get laughed at for being a crypto nerd, you can tell Grandad to stick that in his pipe and smoke it!

Here are a few of the major players.

Filecoin

Filecoin is a decentralized storage network that also uses a built-in economic incentive model and has been around for some time now. Anyone who stores files on the Filecoin network is paid for doing so, creating, once again, the epic DePIN flywheel of value.

These guys have possibly been the most successful in crossing the web2 gap and currently have around 2400 contracts across both the crypto and web2 sectors. 

Demand for Filecoin’s products has increased by around 275% over the past couple of years and looks to be set to continue growing into the future.

With the recent deployment of the Filecoin Virtual Machine, developers can now store smart contract data on top of the Filecoin network. The ability to store data at low cost compared to traditional storage networks gives Filecoin a competitive advantage over web2 alternatives.

You could literally run most of the world's technological needs with a combination of Ethereum, Chainlink and Filecoin… In my humble redacted opinion, of course!

Helium

Representing a paradigm shift for decentralized wireless infrastructure is Helium's goal, and they are doing a great job of exactly that. With almost 1 million total Helium hotspots across 70 countries worldwide, these guys are not messing around. 

Anyone can deploy a Helium hotspot and provide internet access to others, all while earning tokens at the same time. This token mining via the use of hotspots is done using radio technology to avoid the use of energy-inefficient GPUs, making it a win-win for all the environmentalists out there. 

Helium goes beyond being just an IoT (Internet of Things) provider and has its own 5g network to provide for mobile users as well. 

It is worth noting that Solana Saga mobile users can provide Helium hotspots for other users and earn tokens in the process. 

Mobile hotspot providers will be paid in $MOBILE tokens, while IoT providers will earn their keep in $IOT tokens. Both these tokens can be burnt to mint $HNT tokens.

For more info on Helium, take a look at the whitepaper.

Render

Render is one of the top dogs of DePIN and one of the better-known protocols in the space. Offering GPU power to 3D artists, they have grown to a substantial size in a few short years and have been used for many major entertainment projects.

Render gives users the ability to pay for its services in dollars while using these dollars to convert back into $RNDR tokens, meaning value accrual for investors. GPU providers also earn their keep of $RNDR tokens by providing computing power to the 3D artists who need it. 

Not only does Render cover the DePIN narrative, but their usage in the world of artificial intelligence ticks that narrative box, too.

The success of Render can be seen in its billion-dollar plus market cap and gives a further example of the need for decentralized physical infrastructure in real-world applications. 

For a closer look at Render check out the whitepaper here.

So, where is the DePIN action taking place?

With all this in mind, the next question is, what chains are leading the way in the DePIN universe? 

The current, most obvious leader is Solana. 

Already boasting some of the biggest DePIN players like Helium, Render and Hivemapper, Solana looks like the location for the hottest DePIN action.

Its speed, ease of use and low-cost model make it the perfect chain for these DePIN projects to give the best experience to users and providers. Due to this, we are seeing many up-and-coming DePIN projects being launched here.

Outside of the two big names (Render and Helium) mentioned above, there are a vast array of smaller-cap DePIN protocols being built on the Solana network. Some of these smaller players may have huge upside potential, and many have yet to launch tokens. Talk about alpha!

With the highly likely ongoing Solana narrative, it’s looking good for the future of these smaller projects, and they will be well-positioned to grab some major attention in the next cycle.

Some notable projects that currently have tokens are:

  • Nosana
  • Hivemapper
  • GenesysGo
  • Pyth

For a full overview and deep dive on the entire Solana DePIN sector, including all the small-cap alpha you can shake a stick at, you will definitely want to read our Meal Deal coverage on the sector. 

This article will give you a complete understanding of all the current and soon-to-be-launched DePIN projects in the Solana ecosystem, and I can tell you now it should not faded –it may just print you some multiples at the same time! Coming very soon, so stick those notifications on and keep checking blocmates.com.

Final Thoughts

After all the vaporware and ponzis over the years, it is certainly refreshing to see some real-world use cases coming to the forefront of the crypto space. There is a real possibility that DePIN could be a true end-game usage for blockchain technology and, in becoming so, could accrue some serious value in the process.  

The fact that DePIN projects are bridging the gap between crypto users and in-real-life networks in a seamless, cheaper and more secure manner has the potential to be an absolute game changer. It’s very likely there will come a time in the not-so-distant future when the backends of many major networks will be powered by blockchain technology without the user even needing any knowledge of it. 

The already mentioned advantages of the Solana network give it a serious standing in being the chain of choice for these decentralized physical infrastructure projects to build on and will possibly make it the frontier of the DePIN space.

These advancements in the crypto world certainly make it the most exciting space to be involved in and place it on the rapidly changing, cutting edge of the technological world. 

If only the boomers knew…

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