Exploring the New Era of Decentralized Networks: In-Depth Analysis of the DePIN Concept, What is DePIN?

As blockchain technology continues to gain influence and combines with the rapid development of global information technology, a new competitive landscape is unfolding. This is the DePIN (Decentralized Physical Infrastructure Network) arena. In a recent report by investment firm Ryze Labs, opportunities and challenges in the DePIN field are analyzed.

1. Origin and Meaning of DePIN

DePIN, or Decentralized Physical Infrastructure Network, is a novel network that utilizes token incentives to drive individuals to share their resources. This resource sharing encompasses various areas such as storage space, communication bandwidth, cloud computing, energy, and more. The emergence of DePIN transforms infrastructure provision from centralized enterprises to a collaborative form involving global users.

The term DePIN gained prominence in a report by investment research firm Messari, which also provides statistical data related to DePIN.

2. Necessity and Impact of DePIN

Why do we need DePIN? The answer to this question involves the limitations of current Information and Communications Technology (ICT) infrastructure. The emergence of DePIN provides a fresh perspective and potential solutions to address these limitations.

What is CePIN and CePIN Spending

CePIN, which stands for Centralized Physical Infrastructure Network, presents an opportunity for DePIN by calculating and storing costs:

3. Core of DePIN Token Economic Model

Before delving into the current status of DePIN, let's explore its operational logic. DePIN incentivizes users to provide resources such as GPU computing power, deploying hotspots, and storage space through a token economic model. In the early stages of DePIN startups, tokens often lack real value, so user participation resembles that of risk investors. They choose to invest in promising DePIN projects, becoming "risk miners" who profit from increasing token quantities and token price appreciation.

DePIN Token Economic Model

DePIN Token Economy:

• Attracting suppliers through tokens: By adopting a robust token economic model, early participants are attracted to contribute to network construction and provide resources, receiving token rewards in return.
• Attracting builders and network consumers: As the number of resource providers grows, some developers begin to join the ecosystem to create products. Once suppliers can offer certain services and DePIN offers lower prices compared to centralized infrastructure, consumers are also drawn in.
• Creating positive feedback: With an increase in consumer numbers, this demand incentivizes suppliers to participate more, forming a positive feedback loop that attracts more involvement from both supply and demand sides.

4. Current Status of the DePIN Industry

Early projects in the DePIN sector mainly focus on storage and communication technologies, such as the decentralized network Helium (2013), decentralized storage Storj (2014), and Sia (2015). With the development of the Internet, IoT, and AI, the focus of DePIN startups has expanded to areas like computing, storage, communication technologies, and data collection and sharing.

5. Representative Startups in the DePIN Industry

Filecoin & Arweave – Leaders in Decentralized Storage

Filecoin and Arweave, as leaders in decentralized storage, are redefining the way data storage operates. Filecoin, based on the IPFS protocol, drives distributed storage through token incentives, while Arweave offers a permanent storage solution. These innovations not only reduce storage costs but also enhance data security and reliability.

Helium – Pioneer of Decentralized Wireless Networks

As a pioneer in decentralized wireless networks, Helium attracts users to build IoT through token incentives. Making significant progress in the IoT field, Helium also faces challenges from the 5G and WiFi markets. Helium's success lies in effectively using decentralized technology to address the high infrastructure costs of IoT.

Render Network – Rising Star in Decentralized Computing

Render Network, a decentralized GPU rendering platform, provides a new solution for image and animation rendering. Through a multi-layer pricing strategy, this network efficiently matches GPU supply and demand, facilitating the reuse of idle GPU resources and offering customers more cost-effective rendering options.

Theta Network – Innovator in Decentralized Streaming Media

Theta Network optimizes content transmission using decentralized technology, reducing video transmission costs and improving transmission efficiency. The network allows users to contribute bandwidth and computing power as part of video transmission, enhancing users' viewing experiences.

6. Advantages and Challenges of DePIN

The development of the DePIN sector showcases numerous advantages such as resource efficiency improvement, cost reduction, increased market transparency, etc. However, it also faces challenges in terms of technology, market, and regulatory compliance. These challenges include improving user experience, maintaining competitive advantages, and ensuring regulatory compliance.

The future of the DePIN sector is full of opportunities and challenges. With technological advancements and increased market awareness, these startups are poised to address current challenges, bringing revolutionary changes to data storage, computing, image transmission, and other fields. Looking ahead, DePIN has the potential to become a crucial infrastructure supporting the digital economy, delivering real value to society, businesses, and individuals.