Blockchain analytics firm Nansen and lending protocol MetaStreet said in a report published on Monday that the decentralized physical infrastructure network (DePIN) and the emerging "NodeFi" market related to artificial intelligence may become decentralized finance (DeFi). The most active vertical areas in the field.
The report states that the cryptocurrency market is evolving “beyond its initial focus on ERC-20 tokens and DeFi,” but given its monetary market nature and growing interest in non-monetary capital markets, with yields and gains As profit opportunities diminish, the growth of these dominant technologies will eventually level off.
Analysts see three possible impacts from this, the first being that the next big use cases for cryptocurrencies could emerge in verticals and assets beyond ERC20 tokens. Second, in order to develop sustainably, these new assets or products must create enough revenue from outside DeFi to introduce new value onto the chain. Third, these new use cases should be adaptable to cryptocurrencies and maintain interoperability with new DeFi servicing non-ERC20 tokens to take advantage of the vast DeFi liquidity and existing and well-functioning products. Nansen analysts call this another aspect of DeFi “Object-Oriented Finance”.
The report studied the five most promising emerging crypto vertical markets - NFT/NFTfi, games and metaverse, real world assets (RWA), NodeFi and DePIN. Analysts are particularly optimistic about the categories of AI-related computing DePIN and NodeFi. and non-homogeneous RWA.
Source: Nansen Research DePIN’s Growth Potential
According to the report's evaluation, the blockchain vertical field with the greatest growth potential is the DePIN project. Its current main sub-fields include computing/AI-focused networks (such as Render), as well as wireless networks (such as Helium), sensor There are three types of non-computing DePIN including detector network (such as Hivemapper) and energy network (such as Arkreen).
Source: Nansen Research
In terms of computing and AI-related DePIN, analysts said that although such projects have not yet occupied a significant share of the GPU rental market, this area is quickly gaining favor from investors and users. Citing research from Fortune Business Insights, the report states that the GPUaaS market will reach $3.2 billion in 2023.
Analysts believe that as AI becomes increasingly important in technological innovation and training proprietary models becomes a key differentiator for many companies, GPU rental as a sub-sector of DePIN is likely to experience significant growth. However, DePIN has some trust and regulatory issues and is often susceptible to being eliminated by competitors outside the blockchain space, as many parts of these markets and use cases benefit significantly from economies of scale and efficiencies due to centralization.
“Nonetheless, the unique opportunities presented by integration into the cryptocurrency market – such as token incentives and additional revenue through DeFi integration – mean that AI-related computing verticals have a solid opportunity to gain significant leverage in the future. "Significant market share." Nansen's report reads: "Overall, AI-related computing DePIN appears to be well-positioned to become the next major vertical, with a large and rapidly growing market, high revenue potential, and predictable assets. price, and relatively low implementation complexity.”
NodeFi
Analysts believe that the NodeFi vertical market (the incentive market for node operators) is also an area with high growth potential. NodeFi is an emerging narrative and method for raising funds for projects, where licenses to run blockchain nodes are tokenized (often as NFTs) and sold, and the (token) rewards for node operators are often considerable. Projects in this area include Aethir, Sophon, XAI, and MetaStreet.
However, unlike the rapid growth of the AI field, the viability of NodeFi depends on the project itself. The analyst wrote:
“NodeFi is promising, with huge growth and revenue potential, and is simple and straightforward to implement, but it relies heavily on the success of the underlying projects and tokens, and often non-transferable licenses. It has yet to prove its long-term sustainability and create Node licensing market that is easy to interoperate with DeFi.
The report notes that non-fungible RWAs also have potential, with underlying asset types including intellectual property and real estate. Such products offer attractive yields and can bring real on-chain advantages, but are complex in terms of implementation and regulatory hurdles.
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