DePIN: Innovation and Prospects of Decentralized Physical Infrastructure Networks

Decentralized Physical Infrastructure Networks (DePIN) are revolutionizing the way traditional physical infrastructure is deployed and maintained. This innovative model is built in a distributed manner by individuals and businesses from around the world, making it accessible to anyone. In return, contributors to the infrastructure nodes can receive economic compensation and token incentives. By combining cryptographic technology, the internet, the Internet of Things, and blockchain, DePIN achieves a more efficient, decentralized, and fair infrastructure deployment model.

DePIN is crucial for the true essence of Web3. Although applications such as DeFi, gaming, NFTs, social networks, and RWA have developed based on Layer1 and Layer2, these Web3 applications still rely on centralized cloud services and data centers as internet infrastructure. There have been incidents in the industry where data loss occurred in Web3 projects due to outages of large cloud platforms, and there are cases where centralized service providers could not offer services for certain Web3 projects due to regulatory sanctions.

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

1. Low participation cost: Utilize the collective resources of network participants to reduce management fees and expenses.
2. Network robustness: Provide a more resilient and secure infrastructure that is less susceptible to single points of failure.
3. Open competition and innovation: Removing high-capital, large-scale barriers to entry from traditional infrastructure networks is conducive to the entry of small-scale new players.

The logic of the DePIN industry is simple and mainly includes three key roles: equipment providers, DePIN protocols, and network users. To maintain the stable development of this cycle, it is necessary to ensure that the token value is relatively stable and that there is a well-established value capture for the DePIN protocol.

The DePIN projects can be broadly divided into categories such as decentralized storage, computing, CDN, VPN, WiFi, and 5G networks. Most DePINs have three basic components: physical infrastructure, off-chain computing infrastructure, and blockchain and tokens.

Currently, a number of DePIN project cases have emerged:

1. Decentralized storage network: The world's largest distributed storage network, with over 3,800 storage providers contributing more than 17M TB of storage capacity.

2. Decentralization GPU rendering platform: Match users executing rendering jobs with users who have idle GPUs, used for distributed GPU computing in the 3D rendering and AI industries.

3. Decentralization Wireless Network Protocol: Incentivizing people around the world to collaboratively build wireless networks, including IoT and 5G networks.

4. Decentralized live video broadcasting platform: Incentivize nodes to contribute GPU and bandwidth in real-time video encoding and distribution services through cryptoeconomic protocols.

5. Decentralization video streaming network: Incentivizing individual users to share excess computing power and bandwidth resources through tokens, serving as caching or relay nodes for video streams.

From the perspective of industry development, DePIN is a track that has been gradually developing since its early stages, with significant expansion in the past two years. According to research, the total potential market size of the DePIN industry is approximately $2.2 trillion and could reach about $3.5 trillion by 2028. Currently, the FDV of all decentralized physical infrastructure projects is only $5 billion, indicating tremendous growth potential.