Written by @Rui

Acknowledgment to Kuleen, DePIN eco lead of Solana, 0xlol, Defi research lead of Polygon, Mads, researcher of Maven11, drej, founder of Grass.

With a growing emphasis on real-world applications and the rise of Solana, DePin has regained significant popularity in 2024. However, DePIN is not a novel concept. In my opinion, the essence of DePIN is about the token economic model that turning participants into stakeholders, rather than creating new productivity.

In the previous bull run, projects like Arweave, Filecoin, and Helium stood out, while many others fell short, even went down to zero. Now, as we approach the cusp of the next bull market, our challenge lies in discerning between fleeting fads and genuinely sustainable innovations that will usher us into a new era of real-world applications.

Content

• Introduction
• Participants: Hardware, Miner, Protocol, Operator and Users
• Ecosystem Landscape
  • DePIN Projects: Purpose, Type and Market
  • Blockchain and Middleware: General and DePin-specific chain
• Essence:
  • Why Didn't It Work: Regulation, Demand, Tokenomic, Moat and Rug
  • Why There's Hope: Margin, Anchor, Booster and Community
• Evaluation Criteria:
  • Total Value = Product X Tokenomic X Narrative
  • Duration = Being proven or disproven
  • Last Straw = Compliance X Team
• Case Study:
  • Helium: 5G celluar network
  • io.net: AI/ML Sharing GPU

Intro

The blockchain domain has focused on infrastructure development, emphasizing scaling solutions (Layer2s, Data Availability), privacy enhancement (Zero-Knowledge), and user experience improvement (Account Abstraction) over the years to prepare for broad adoption. The need for real-world, mass adoption is now more evident than ever. Initiatives such as exchanges working towards compliance and ETFs entering the traditional markets have marked significant progress and are paving the way for us.

DePIN is not a specific area, this term originally brought up by Messari as the short for Decentralized Physical Infrastructure Networks. It represents a community-driven, decentralized hardware network incentivized by token. Its primary goal is to replace the monopolized coordinator and use native tokens to transform participants into stakeholders of the network. Since the last bull market, there has been a significant expansion into high-value sectors such as AI/ML, 5G, WiFi, Bandwidth, Vehicle, Energy and so on.

So, what's new that DePIN brought to the table in this spectrum?

• Assets: Type, distribution, trading methods

  Looking at successful crypto projects, typically feature assets with generic attributes and continuously refine these assets' functionalities and use cases. DePIN projects can incorporate physical assets, transforming the services provided or data collected by the hardware into tokenized assets. This tokenization facilitates permissionless trading and staking, paving the way for a broader spectrum of financial activities.

• Participants: Roles, amount, stickiness and relationship

  DePIN enhances the ecosystem by diversifying roles, creating a cohesive network of hardware manufacturers, miners, network applications, consumers and so on. Reducing entry barriers and expanding geographical reach draws a broader range of participants. More importantly, DePIN transforms all parties involved into stakeholders through crypto assets, fostering both labor contribution and consumption. This approach ensures ongoing engagement, increasing the ecosystem's stickiness and surpassing the traditional, simplistic buy-and-sell relationships. By fostering complex interconnections, DePIN significantly bolsters the robustness and sustainability of its ecosystem.