Analysis of the DePIN Track

In the previous articles, I shared some basic views on the AI + blockchain sector and my thoughts on some projects.

Most of the projects mentioned are quite far from my ideal vision of decentralized AI; they even fall short of my expectations for utilizing AI in blockchain or blockchain in AI.

Some projects, although I appreciate their creativity and recognize their direction, still need time to test whether they can be implemented. Some of these projects have already issued tokens. However, in terms of cost-effectiveness, their prices are not low at the moment. For a project that is still exploring but lacks a clear price advantage, whether this is good or bad can only be left to the market to test.

Apart from AI, another sector that will be hotly discussed in the upcoming bull market is DePIN.

This sector actually shares many similarities with AI + blockchain: both aim to widely utilize physical devices in the real world and emphasize the use of "idle" resources.

Therefore, many existing so-called AI + blockchain projects can also be seen as DePIN-type projects.

However, compared to AI + blockchain, I believe DePIN projects have a unique aspect: they already have a certain prototype and are widely present in our real lives.

Didi Chuxing, in my view, is a project very close to DePIN.

However, it is not decentralized; it is merely a distributed system. Because it is not decentralized, we can see various issues in centralized systems reflected in it. Thus, our natural logic leads us to the idea of transforming this industry with blockchain (for example, by adding incentive mechanisms) to eliminate its various drawbacks.

This is not only the thinking of many current DePIN projects but also the mindset of many projects back during the ICO boom in 2017.

However, after years of development, the vast majority of these projects seem to have not shown a crushing advantage over their "centralized" competitors.

Instead, I see another noteworthy phenomenon: these projects, as they develop, are basically not utilizing "idle resources" but rather new resources. How many of us truly use our idle second-hand hard drives, second-hand XX, etc., to participate in project mining? It is likely that more people are purchasing stronger, more advantageous new devices to participate.

This not only fails to improve the utilization of existing resources but also creates more future "idle resources."

In terms of improving the utilization of existing resources, they are not even as efficient as Didi Chuxing. Didi utilizes idle resources (idle cars) more efficiently than most DePIN projects in the crypto ecosystem.

If the idea of improving resource utilization through decentralization is not currently prominent in the practice of most projects, then where exactly lies the true significance and comparative advantage of DePIN projects?

Is it that this business idea is unworkable, or is there an issue with the current technical solutions?

The DePIN projects that emerged in 2017 did not provide good answers to these questions, and I feel that the large number of new projects emerging now also do not offer clear answers, or at least their ideas do not seem fundamentally different from those of past projects.

Of course, among the many DePIN projects, some have made bold explorations and proposed new ideas and solutions, which are worth noting, but whether they can achieve the desired results in the implementation process remains to be seen.

I often emphasize this viewpoint:

When a new sector or project is just born, if the public believes that this sector or project is highly anticipated, I tend to be doubly cautious because such expectations are likely to fall short or may be realized in ways we could never have imagined.

Take Arweave and Filecoin as examples. When Arweave launched, it was quiet and received little attention, while Filecoin was highly anticipated even before its launch. We have all seen the results since then.

Similarly, for the currently "booming" DePIN sector, I certainly hope it can truly explode. However, so far, I still feel that most projects do not have much essential innovation; what I see more is the halo of capital backing and the innovative application of concepts, rather than substantial breakthroughs.

Of course, these questions are unlikely to affect the token holders of these projects in making money during the upcoming bull market. However, making quick money and discovering truly long-term projects are vastly different. Making quick money is a game, while discovering genuine long-term projects is about elevating one's thinking level and discernment.

I always hope that I and our readers can maintain a sense of calm and independence while participating in the game.