A summary of 5 DePIN projects to watch in the near future
Including Filecoin, Helium, Shadow Token, and Aethir, etc.Original Title: “DePIN - A New Paradigm in Crypto”
Author: Route 2 FI
Compiled by: Ladyfinger, Blockbeats
Editor's Note: In the current digital age, the concept of Decentralized Physical Infrastructure Networks (DePIN) is attracting increasing attention. DePIN not only represents a new network architecture concept but also provides a platform for innovations in storage, computing, artificial intelligence, wireless networks, and other fields. Through token incentive mechanisms, DePIN stimulates users' enthusiasm to contribute and provide value to the network, while also demonstrating significant advantages in resource efficiency, lowering entry barriers, and decentralization.
Recently, several projects based on the DePIN concept have emerged, showcasing tremendous potential and innovation in decentralized storage and computing. Projects like Filecoin, Helium, Shadow Token, and Aethir have not only opened up new application scenarios but also provided strong case analyses 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 encompasses a very broad range, which can be divided into two main categories: physical infrastructure networks and digital resource networks. Under these two categories, it includes various fields such as storage, computing, artificial intelligence, wireless networks, imaging, and mapping. 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:
Resource Efficiency: Providers with underutilized resources can "rent" these resources to other consumers, ensuring that idle resources are not wasted.
Lower Entry Barriers: DePIN effectively lowers the entry barriers to accessing certain resources. For example, imagine needing specific GPUs to perform tasks that are not easily available on the open market; users can easily "rent" computing power from suitable providers without worrying about purchasing components.
Decentralization: Users of the services do not have to worry about downtime faced by centralized entities.
According to data from CoinGecko, the market capitalization of the DePIN category has witnessed a 35% growth in the field, demonstrating its strong performance and potential for future growth.
Reasons for Needing DePIN
According to information from CoinGecko, DePIN allows facilities to grow capabilities in a more flexible manner. Networks can increase resources rather than increasing the capacity of each resource. This provides good flexibility, allowing facilities built using this system to easily scale up or down based on demand. Blockchain can also control available resources and allocate them according to demand.
In cases of low demand, certain providers may experience lower workloads. In high-demand situations, the network can reactivate dormant resources, add more instances, and increase the overall capacity of the network without any changes. Such systems can scale infinitely based on available dormant resources and the allocation system of DePIN.
Similar to DeFi, DePIN is also decentralizing infrastructure systems, shifting from corporate control to collective resource contributions from individuals. The system distributes control of facilities among different providers, similar to miners in a PoW network.
DePIN acts 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 each provider has equal capabilities, DePIN becomes a decentralized system or nearly decentralized.
The pricing model of DePIN differs from traditional facilities. Factors influencing the pricing model include the costs incurred by private providers operating their respective facilities and other network-related factors. Additional charges from the platform may be lower since the platform itself does not incur costs to provide these facilities.
Overall, the pricing model of DePIN is expected to be cheaper, with anticipated pricing being fair as it considers fundamental factors without unfair price inflation, which is often associated with facilities operated by centralized entities. For a people-driven system, DePIN is also more likely to consider affordability in its pricing model rather than operating like a corporation.
DePIN networks can be established with minimal costs, and providers have great flexibility in offering services. For example, providers can submit their facilities to multiple networks. Users also pay a fair price for the services they receive from the network. DePIN aims to provide the best possible service at the lowest possible cost, creating a cost-effective system.
Anyone can contribute their resources to DePIN. On the user side, anyone can also access the services provided by DePIN. There is no price negotiation or user screening for these services. Once providers have the necessary infrastructure, they can operate a provider-side account on DePIN, just as anyone can deploy a liquidity pool on a DEX or easily obtain loans from a money market.
Incentives are an important tool for DePIN. For providers, they offer a passive or active income opportunity based on how DePIN operates. Individuals can also primarily establish income streams from DePIN. Projects like Nunet aim to reduce the number of dormant computing resources through their AI-driven computing power market. Providers can earn income from facilities that would otherwise remain idle.
DePIN Projects
Filecoin ($FIL)
Filecoin is widely known as a decentralized storage layer that allows anyone to store data in a decentralized manner (also referred to as the "Dropbox" of Web3). It is built on the proprietary file system (IPFS) and incentivizes data storage providers to ensure the secure storage and retrievability of data. Filecoin provides an open market for anyone who wants to store files or earn rewards for storing other users' files. Filecoin is actively used by users, as evidenced by the current snapshot of data stored on Filecoin:
Additionally, the Filecoin blockchain supports smart contracts through the Filecoin Virtual Machine (FVM) introduced on March 14, 2023. FVM allows smart contracts to be deployed on the Filecoin network, similar to smart contracts on Ethereum. With FVM, computational logic conditions can be combined with traditional Filecoin storage and retrieval, opening up many potential use cases.
In terms of long-term data storage, Filecoin remains the market leader. Coupled with its innovations, Filecoin continues to be a strong player in the decentralized storage space.
Helium ($HNT)
Helium is a decentralized wireless infrastructure network supported by Solana. It initially started as an Internet of Things (IoT) network, providing connectivity for IoT devices using the low-range wide-area network (LoRaWAN) protocol. It later expanded to 5G hotspots, where the Helium 5G network is powered by user-operated nodes. Node operators are compensated with tokens for providing resources to the network.
An interesting real-world application of Helium is Helium Mobile, a network provider in the U.S. that utilizes Helium nodes wherever they are available. As long as there are Helium nodes within range, the mobile network will leverage these Helium nodes.
Shadow Token ($SHDW)
Shadow Token from GenesysGo, often referred to as "Filecoin for Solana," is a cloud storage platform aimed at decentralizing the traditional cloud storage stack. shdwDrive achieves this goal through its core distributed ledger technology, DAGGER, allowing them to reduce the costs of enterprise-level data center storage.
Combining DAGGER's consensus mechanism with Solana's execution environment, shdwDrive becomes a powerful cloud service platform, paving the way for a range of file storage applications.
Shadow Token has its own native token - $SHDW, with a current FDV of approximately $378.5 million. A forthcoming catalyst for this token is its recent announcement of listing on Coinbase. Currently, users can only purchase this token on the Solana chain, but once it is listed on centralized exchanges, more retail funds are expected to flow into this token.
Following this news, the price of SHDW in USD surged by about 55% in the past 24 hours, rising from $1.35 to $2.49.
Aethir ($ATH)
Aethir Cloud is a new entrant in the cloud computing protocol market, set to become a new competitor to current decentralized computing giants like Render and Akash. Aethir is a decentralized platform that aggregates computing processing power. Aethir connects providers of this computing power with users and consumers who need to use GPU hardware for various applications such as AI, ML, and cloud gaming.
The Aethir network consists of three components:
Containers
Checkers
Indexers
A brief description of these components is as follows:
Containers are virtual endpoints that execute and render the actual work. The workloads of local devices are offloaded to containers, providing users with a "zero-latency" experience.
Checkers can be seen as "referees" supervising Containers to ensure the quality of service provided by the network.
Indexers are the mechanism that matches suitable Containers based on consumer requests, aiming to deliver services in the shortest possible time.
Aethir Cloud is supported by notable investors such as Maelstrom, Mirana Ventures, and Animoca Brands. They also raised over $9 million in their latest Pre-Series A funding round at a valuation of $150 million. Additionally, Aethir held a node sale event for its Checker nodes, raising over 26.8k ETH.
Grass
Grass is a Layer 2 dataset that utilizes network scraping nodes to gather AI training data from various websites for builders to access. Recently, Grass has gained significant attention as users run the Grass application and become Grass nodes in anticipation of airdrops.
The working mechanism of Grass involves a network of nodes composed of devices worldwide that are specifically designed to scrape and process web data. This data is then transformed into structured datasets for AI training purposes.
The data and algorithms behind AI applications are often opaque, leading users to be unable to understand how AI models arrive at their conclusions. This lack of transparency regarding data can result in AI models inadvertently or intentionally using incorrect or biased data for training, which Grass aims to address.
How does Grass solve these issues? At this point, Layer 2 data Rollup technology becomes particularly important. Through this technology, all data scraped by Grass nodes will be recorded and the source websites of the data will be verified. This metadata will then be stored in the dataset, thereby enhancing the credibility of data accuracy. Given the enormous throughput required to process such large amounts of data, L2 employs ZK processors for batch validation of data.
Here is a detailed introduction to the Grass network architecture:
Grass is currently conducting a points program for users running nodes while speculating on airdrops. The last financing round for Grass was on December 20, where they raised $3.5 million in a seed funding round led by notable investors such as Polychain Capital and Tribe Capital.
