In the current digital era, the concept of decentralized physical infrastructure networks (DePIN) is attracting more and more attention. DePIN not only represents a new network architecture concept, but also provides a platform for innovation in storage, computing, artificial intelligence, wireless networks and other fields. Through the token incentive mechanism, DePIN stimulates users' enthusiasm to contribute and provide value to the network. At the same time, it shows obvious advantages in resource efficiency, lowering entry barriers, and decentralization.
Recently, several DePIN-based projects have emerged, showing great potential and innovation in decentralized storage and computing. Projects such as Filecoin, Helium, Shadow Token, and Aethir have not only opened up new application scenarios, but also provided powerful case studies for the practical application and development of decentralized networks.
What is DePIN?
DePIN (Decentralized Physical Infrastructure Networks) is a term proposed by Messari, referring to networks that aggregate and provide services or resources to users, ultimately matching the supply and demand of specific resources. This concept covers a very broad range and can be divided into two categories: physical infrastructure networks and digital resource networks. Under these two categories, there are also many fields such as storage, computing, artificial intelligence, wireless networks, images and map making. The DePIN protocol rewards and incentivizes users to contribute and provide value to the entire network through a token reward mechanism.
The DePIN protocol has advantages in several aspects:
1. Resource efficiency: Providers with underutilized resources can "rent" these resources to other consumers to ensure that idle resources are not wasted.
2. Lower the entry barrier: DePIN effectively lowers the entry barrier to obtain certain resources. For example, imagine if you need to perform a task using some specific GPUs, which are not readily available on the open market, users can easily "rent" computing power from a suitable provider without having to worry about purchasing components.
3. Decentralization: Users of the service do not have to worry about the downtime faced by centralized entities.
According to data on CoinGecko, the market capitalization of the DePIN category witnessed a 35% growth in the space, showing its strong performance and room for future growth.
Reasons for needing DePIN
According to information from CoinGecko, DePIN allows facilities to grow capacity in a more flexible manner. Networks can add resources without increasing the capacity of each resource. This provides good flexibility and facilities built using this system can easily scale up or down based on demand. Blockchain can also control available resources and ration demand.
In situations of low demand, some providers may experience lower workloads. In high demand situations, the network can reactivate dormant resources, add more instances, and increase the capacity of the entire network without any changes. Depending on available dormant resources and DePIN's provisioning system, a system like this can be infinitely scalable.
Like DeFi, DePIN is also decentralizing infrastructure systems, moving away from businesses and towards individuals collectively investing resources in building facilities. The system distributes control of the facility to different providers, similar to miners in a PoW network.
DePIN is like a DAO within the industry, where everyone in the system contributes resources and has relative control based on their capabilities. In a system where every provider has equal capabilities, DePIN becomes a decentralized system or almost decentralized.
DePIN’s pricing model is different compared to traditional facilities. Factors affecting pricing models include private providers' costs of operating their respective facilities and other network-related factors. The additional charges for the platform may be less as it does not cost the platform itself anything to provide these facilities.
Overall, DePIN’s pricing model is expected to be cheaper, and pricing is expected to be fair because it takes fundamentals into account without unfair price inflation, which is often associated with facilities operated by centralized institutions. For a system driven by people, DePIN is also more likely to factor in affordability in its pricing model, rather than like a business.
DePIN networks cost almost nothing to set up and providers have great flexibility in offering services. For example, a provider can submit its facilities to multiple networks. Users also pay fair prices for the services they receive from the network. DePIN aims to provide the best possible service at the lowest possible cost, providing a cost-effective system.
Anyone can contribute their resources to DePIN. On the user side, anyone can also get the services provided by DePIN. There is no price haggling or user screening for these services. Once providers have the required infrastructure, they can run a provider-side account on DePIN, just as anyone can deploy a liquidity pool on a DEX or easily get a loan from a money market.
Incentives are an important tool for DePIN. For providers, they offer a passive or active income opportunity depending on how DePIN works. Individuals can also build income streams primarily from DePIN. Projects like Nunet hope to reduce the amount of dormant computing resources through its AI-powered marketplace for computing power. Providers can earn revenue from facilities that would otherwise go unused.
DePIN project
Filecoin ($FIL)
Filecoin is widely known as a decentralized storage layer that allows anyone to store data in a decentralized manner (also known as the "Dropbox" of Web3). It is built on a proprietary file system (IPFS), incentivizing data storage providers to ensure that data is securely stored and retrievable. Filecoin provides an open marketplace for anyone who wants to store files or get paid for storing other users’ files. Filecoin is already actively used by users, here is a snapshot of the data currently stored on Filecoin:
In addition, the Filecoin blockchain supports smart contracts through the Filecoin Virtual Machine (FVM), which was introduced on March 14, 2023. FVM allows smart contracts to be deployed on the Filecoin network, similar to smart contracts on Ethereum. With FVM, computational logic conditions can be combined with traditional Filecoin storage and retrieval, which opens up many potential use cases.
Filecoin is still the market leader in long-term data storage. Coupled with its innovation, Filecoin remains a strong player in the decentralized storage space.
Helium ($HNT)
Helium is a decentralized wireless infrastructure network powered by Solana. It started out as an Internet of Things (IoT) network, using the Low Range Wide Area Network (LoRaWAN) protocol to provide connectivity for IoT devices. It has subsequently expanded to 5G hotspots, where the Helium 5G network is powered by user-operated nodes. Node operators are compensated by providing resources to the network in exchange for tokens.
An interesting real-world use case for helium is Helium Mobile, a US-based network provider that uses helium nodes wherever they are available. As long as there are Helium nodes within range, the mobile network will utilize these Helium nodes.
Shadow Token ($SHDW)
GenesysGo’s Shadow Token, often referred to as “Solana’s Filecoin,” is a cloud storage platform that aims to decentralize the traditional cloud storage stack. shdwDrive achieves this goal through DAGGER, the core of shdwDrive’s distributed ledger technology, allowing them to reduce the cost of enterprise-grade data center storage.
Combining DAGGER's consensus mechanism and Solana's execution environment, shdwDrive becomes a powerful cloud service platform, paving the way for a range of file storage applications.
Shadow Token already has its own native token - $SHDW, with a current FDV of about $378.5 million. The catalyst for the token is the recently announced Coinbase listing. Currently, users can only buy this token on the Solana chain, but once this token is listed on a centralized exchange, more retail funds will flow into this token.
Following the news, the price of SHDW USD rose by approximately 55% in the past 24 hours, from $1.35 to $2.49.
Ether ($ATH)
Aethir Cloud is a new cloud computing protocol entering the market that will become a new competitor to current decentralized computing giants such as Render and Akash. Aethir is a decentralized platform and aggregator of computing processing power. Aethir connects providers of this computing power with users and consumers who need to use GPU hardware for diverse applications such as AI, ML and cloud gaming.
The Aethir network consists of three parts:
1. Containers
2. Checkers
3. Indexers
A brief description of these components is as follows:
1. Containers are virtual endpoints that perform and render the actual work. The workload of the local device is moved to the container, providing users with a "zero latency" experience
2. Checkers can be regarded as "referees" who supervise Containers to ensure the quality of services provided by the network.
3. Indexes are a mechanism to match appropriate Containers according to consumer requests, with the purpose of delivering services in the shortest possible time.
Aethir Cloud is backed by notable investors including Maelstrom, Mirana Ventures, and Animoca Brands. They also raised a whopping $9 million in their latest Pre-Series Series A funding round at a $150 million valuation. Additionally, Aethir held a node sale event for its Checker node, raising over 26.8k ETH.
Grass
GRASS is a layer 2 dataset that leverages web scraping nodes to fetch AI training data from different websites for builders to access. GRASS has gained a lot of attention recently as users are running GRASS applications and becoming GRASS nodes in anticipation of the airdrop.
The way Grass works is that devices around the world form a network of nodes that specialize in grabbing and processing network data. This data is then transformed into structured datasets for use in AI training.
The data and algorithms behind AI applications are often opaque, leaving users unable to understand how the AI model reaches its conclusions. This lack of data transparency can lead to AI models being accidentally or intentionally trained with wrong or biased data, and Grass can solve this problem.
How does Grass solve these problems? At this time, the second layer of data rollup technology is particularly important. Through this technology, all data captured by the Grass node will be recorded and the source website of the data will be verified. This metadata is then stored in the dataset, increasing confidence in the accuracy of the data. Given the huge throughput required to process such a large amount of data, L2 uses a ZK processor for batch verification of data.
The following is a detailed description of the Grass network architecture:
Grass is still running a points program for users who run nodes, as well as speculative airdrops. Grass’s most recent funding was on December 20, when they raised $3.5 million in a seed round led by well-known investors such as Polychain Capital and Tribe Capital.
