Hotcoin Research | The Future of the Internet of Everything: How DePIN Gives Wings of Decentralization to the Real World?
# Introduction
In the past decade, the rapid development of Internet of Things (IoT) and blockchain technology has brought unprecedented changes to the global economy. The concept of ubiquitous connectivity has transitioned from theory to practice, leveraging the ability of IoT devices to collect, process, and share data, driving widespread applications in smart cities, Industry 4.0, and smart homes. However, most of these applications rely on traditional centralized infrastructure, which, while providing momentum for early development, has also exposed the following flaws:
Risks of single points of failure due to centralized control: Once a central node is attacked or fails, the entire system may become paralyzed.
Transparency and trust issues: The complete control of data by centralized entities reduces public trust in data security and privacy.
High costs and low efficiency: Maintaining and expanding traditional centralized infrastructure requires huge investments, leading to significant resource wastage.
Blockchain technology, with its decentralized, tamper-proof, and highly transparent characteristics, is seen as an important tool to address these issues. The concept of Decentralized Physical Infrastructure Networks (DePIN) has emerged, becoming an important practice for the integration of blockchain technology with the real world. DePIN utilizes blockchain's distributed ledger, smart contracts, and token incentive mechanisms to decentralize the management and operation of physical infrastructure. Through this model, DePIN not only improves the utilization of physical resources but also reduces costs and enhances the robustness of the system.
The core of DePIN lies in reconstructing physical infrastructure networks in a decentralized manner, providing low-cost and high-efficiency solutions for fields such as IoT, storage, computing, and energy. At the same time, by redefining the management model of physical resources, it broadens the application boundaries of blockchain technology, giving rise to new business models and economic forms, and is seen as a core driving force for the development of the global digital economy in the next decade.
# I. The Concept and Significance of DePIN
1. What is DePIN?
DePIN, short for Decentralized Physical Infrastructure Network, is a new network architecture based on blockchain technology, focusing on integrating physical hardware and resources globally through distributed ledgers, token incentives, and smart contracts to create an efficient and transparent resource collaboration system.
The operational mechanism of DePIN includes the following key aspects:
Off-chain hardware device access: The DePIN network connects physical devices through various means, including customized hardware (such as Helium hotspot devices) and consumer-grade hardware (such as smartphones and smartwatches).
Proof of Physical Work (PoPW): Devices upload data by completing tasks, which is recorded on the blockchain to ensure trustworthiness.
On-chain settlement and incentives: Smart contracts distribute token incentives to nodes based on resource contributions.
Market-based resource exchange: Decentralized platforms facilitate resource transactions between supply and demand.
2. The Value Significance of DePIN
DePIN changes the traditional management model of physical infrastructure through decentralization, with its core value mainly reflected in:
Improved resource utilization: By sharing idle physical resources such as storage, computing power, and communication networks, resources that were previously underutilized can be transformed into economic value.
Lower entry barriers: Traditional infrastructure networks require huge capital investments, while DePIN's distributed architecture allows individuals and small participants to easily connect.
Decentralized governance: Abandoning the monopoly of centralized giants, all network participants can fairly participate in decision-making, ensuring transparency and efficiency.
Promoting technological innovation: By combining cutting-edge technologies like blockchain and IoT, DePIN provides more flexible and scalable infrastructure solutions.
DePIN is a product of the intersection of physical infrastructure and blockchain technology. It not only redefines the way resources are shared and collaborated but also provides infrastructure support for the digital upgrade of the global economy. Its emergence marks the beginning of blockchain technology moving from the virtual realm to the real world, giving physical infrastructure the wings of decentralization.
# II. Analysis of the Current Status of the DePIN Track
1. Market Size and Growth Potential
With the rapid development of technologies such as IoT, blockchain, and artificial intelligence (AI), DePIN has become a multidimensional and multi-field innovation track. The global map of DePIN shows the locations of DePIN devices around the world. As of January 8, 2025, the total number of DePIN devices in 196 countries or regions is 4,462,252, with a total market value of $6,978,309,748.
Source: https://depinscan.io/map-view
According to data from DePIN Ninja, there are currently over 1,561 DePIN projects globally, with a total market value of approximately $48 billion.
Source: https://depin.ninja/
In recent years, the rapid rise of AI has further propelled the development of DePIN. Decentralized storage and computing networks provide indispensable underlying support for AI, while AI, in turn, helps optimize the network resource allocation and operational efficiency of DePIN.
User demand for decentralized infrastructure is significantly increasing, especially in energy distribution, IoT connectivity, and distributed computing. According to research by Messari, the market size of this track may exceed $3.5 trillion by 2028, contributing an additional $10 trillion to global GDP over the next decade.
2. Main Application Areas of DePIN
DePIN projects are widely distributed across high-performance public chains such as Solana and Polygon, as well as dedicated DePIN public chains (such as IoTeX and Peaq), providing technical support and ecosystem guarantees for the track. The application areas of DePIN are broad and diverse, currently mainly focused on the following aspects:
Storage: Decentralized storage networks like Filecoin and Arweave provide efficient and censorship-resistant storage services by sharing idle hard drive resources.
Computing Power: Projects like Render Network and io.net utilize idle computing power resources to support the training, inference, and deployment of AI models.
Wireless Networks: Projects like Helium and DAWN build wireless communication networks in a decentralized manner, reducing communication costs.
Sensor Networks: Projects like HiveMapper and Silencio collect environmental and geographic data using smart devices.
Energy: Decentralized energy projects like Starpower and Powerpod promote the development of distributed energy markets.
# III. Overview of Representative DePIN Projects
A number of representative projects have emerged in the DePIN track, which not only embody the innovative concept of decentralization in their technical architecture but also demonstrate great potential in practical applications.
Source: https://depinscan.io/
1. Storage Sector
Filecoin ($FIL)
As a pioneer in the decentralized storage field, Filecoin is built on IPFS (InterPlanetary File System) technology, creating a secure and efficient distributed storage network. Its core mechanism ensures data integrity and security through Proof of Storage and Proof of Replication. Filecoin incentivizes miners to contribute idle storage resources and provides users with on-demand storage services, significantly reducing data storage costs while enhancing censorship resistance.
Arweave ($AR)
Arweave's most notable feature is its permanent storage solution, which ensures data can be accessed over a long period by paying a one-time storage fee. Compared to traditional cloud storage subscription services, Arweave offers an economical, efficient, and long-term reliable option, particularly suitable for scenarios requiring complete data records, such as historical archives, NFT metadata, and academic research.
2. Computing Power Sharing
Render Network ($RENDER)
Render Network focuses on GPU rendering, providing flexible computing power support for applications requiring high-performance computing (such as virtual reality, 3D rendering, and industrial design). By matching decentralized computing power resources, Render Network significantly reduces rendering costs for users while fully utilizing idle GPU resources.
io.net ($IO)
As a typical representative of the combination of DePIN and AI narratives, io.net has built an efficient distributed GPU network to provide strong underlying support for AI model training and inference. Its core innovation lies in dynamically allocating distributed computing power resources to ensure efficiency and cost-effectiveness. Additionally, io.net's platform features include GPU cluster management and real-time resource tracking, providing users with a complete set of intelligent computing solutions, especially suitable for AI model training needs.
3. Sensor Networks
HiveMapper ($HONEY)
HiveMapper is a decentralized mapping service platform based on vehicle-mounted cameras, collecting high-resolution real-time geographic data through the cameras of users such as taxi drivers and couriers. Users who contribute data can earn token rewards, and this data is widely used in fields such as autonomous driving, insurance assessment, and urban planning. HiveMapper's uniqueness lies in its peer-to-peer data contribution model, significantly reducing the construction costs of traditional mapping services.
Silencio (Token not yet issued)
Silencio utilizes the built-in microphones of smartphones to create a global noise monitoring network. Users earn token rewards by providing hyper-localized noise data, which the platform sells to urban planners, real estate developers, and academic research institutions.
4. Wireless Networks
Helium ($HNT)
Helium is a flagship project for decentralized wireless communication, providing low-cost, high-coverage communication services for IoT devices through LoRaWAN technology. Users can participate in network construction by purchasing and deploying Helium hotspot devices while earning HNT token rewards. Currently, Helium has attracted hundreds of thousands of nodes globally, covering urban and rural areas in multiple countries, providing important support for smart agriculture, environmental monitoring, and logistics management.
Grass ($GRASS)
Grass is a decentralized platform deployed on the Solana network that allows users to profit from internet connections by selling unused network resources. It aims to leverage users' unused internet bandwidth to collect information from public networks, providing data support for AI model training. By running nodes, users can share bandwidth, participate in the data collection process, and receive corresponding rewards.
5. Energy Revolution
Starpower (Token not yet issued)
Starpower creates decentralized virtual power plants (VPPs) to connect distributed energy production with demand, thereby improving energy utilization efficiency and reducing energy waste. The project has deployed over 16,000 devices in Asia, providing real-world cases for decentralized energy management.
Powerpod (Token not yet issued)
Powerpod focuses on the decentralized layout of electric vehicle charging networks, establishing a community-based charging station network that reduces the cost and complexity of electric vehicle charging. Its distributed network model not only promotes the use of clean energy but also facilitates the adoption of electric vehicles in more regions.
# IV. Opportunities and Challenges in the DePIN Track
DePIN faces both opportunities and challenges. Its technological and economic model innovations provide disruptive solutions for multiple industries. However, the complexities of hardware, user education, regulation, and economic models need to be carefully addressed.
1. Opportunities for DePIN
1) Market demand drive: The vast prospects of smart cities and distributed energy
With the acceleration of global urbanization and the intensification of environmental issues, smart cities and distributed energy have become focal points of global attention. DePIN provides efficient and transparent technological foundations for these areas:
Smart Cities: Through sensor networks and distributed communication networks, DePIN can collect and analyze environmental data (such as air quality, traffic flow, etc.) in real-time, supporting urban planning and emergency management.
Distributed Energy: DePIN supports P2P energy trading, enhancing the utilization of clean energy. For example, Starpower's virtual power plant and Powerpod's community charging network demonstrate the potential of decentralized energy.
2) Technological synergy: The integration of AI, blockchain, and IoT
DePIN is the best practice area for the integration of blockchain, AI, and IoT. This technological synergy brings the following advantages:
Blockchain ensures data transparency and tamper resistance.
AI optimizes network resource allocation and user experience, such as predicting network load or adjusting incentive mechanisms through AI algorithms.
IoT provides rich edge data sources, supporting the DePIN network with data.
3) The rise of new economic models: Decentralized markets for data, energy, and computing power
DePIN establishes entirely new trading markets for data, energy, and computing power through decentralized token economic models:
Data Market: For example, Silencio's noise monitoring data and HiveMapper's geographic data become tradable through the DePIN network.
Energy Market: P2P energy trading markets reduce the intermediary links of traditional energy distribution.
Computing Power Market: Render Network and Akash Network provide users with flexible computing resource options, optimizing resource utilization.
4) Global incentive mechanisms
DePIN's token incentive model breaks traditional centralized profit distribution methods, attracting individuals and enterprises globally. For example, Helium and DAWN encourage users to deploy hardware nodes through token rewards, rapidly building a globally covered network infrastructure.
2. Challenges for DePIN
1) Hardware and infrastructure thresholds
The operation of DePIN requires substantial physical hardware support, such as sensors, storage devices, and communication nodes. However, the costs of these hardware and supply chain issues pose challenges to the large-scale promotion of DePIN:
Device Costs: High-performance hardware (such as GPUs and LoRaWAN hotspots) can be expensive, potentially limiting participation from ordinary users.
Supply Chain Dependence: If project parties rely on third-party hardware manufacturers, they may face supply chain risks and scalability issues.
2) User education and acceptance
The decentralized concept and technology of DePIN are relatively unfamiliar to traditional enterprises and ordinary users, requiring continuous investment in promotion and education:
Enterprise Level: How to persuade traditional enterprises to adopt DePIN networks instead of existing centralized infrastructures? Initial costs and technical complexities may become obstacles.
User Level: Attracting individual users requires emphasizing their economic benefits (such as token rewards) and long-term social values (such as privacy protection and transparency).
3) Regulatory and compliance pressures
DePIN involves key areas such as storage, communication, and energy, which are subject to strict regulations in different countries. Specific challenges include:
Data Privacy: Decentralized storage networks may be used to store sensitive or illegal content, leading to regulatory intervention.
Energy Trading: P2P energy markets may conflict with existing energy policies.
Communication Networks: Decentralized communication may face competition and policy barriers from traditional telecom operators.
4) Sustainability of the token economy
The token model of DePIN performs well in attracting users initially, but its long-term sustainability faces risks:
Price Volatility: The instability of token prices may affect user participation enthusiasm.
Incentive Collapse Risk: If the incentive model is poorly designed, a decline in token demand may trigger a "death spiral."
Economic Model Optimization: Balancing token deflation and network expansion needs is key to project success.
# V. Outlook and Summary of the DePIN Track
The future development of DePIN holds profound potential and strategic significance. Driven by technological breakthroughs, market demand, and application scenarios, DePIN is at the forefront of rapid expansion. The following is an analysis and outlook on the main development trends of DePIN:
Trend 1: Deep Integration with AI
Decentralized data and computing power support for AI: With the surge in AI's demand for computing power and data, DePIN provides a decentralized and efficient support method. For example, sensor networks (like Silencio and HiveMapper) can provide high-quality distributed data, offering rich material for AI model training and inference. Decentralized computing power projects (like Render Network and Akash Network) integrate idle GPUs and cloud resources to provide a more cost-effective training and deployment environment for AI models.
AI optimizes the DePIN network: The inclusion of AI technology makes the DePIN network smarter and more efficient. Deep learning algorithms can predict network traffic and hardware performance, improving resource allocation efficiency. AI can monitor the operational status of nodes, dynamically optimizing incentive mechanisms to enhance user experience and network stability.
AI-driven industry scenario innovation: The application scenarios of DePIN are further expanded through AI. For example, in smart cities, AI analyzes sensor data to optimize traffic flow and public facility management. In decentralized energy networks, AI optimizes the matching of energy production and consumption.
Trend 2: Lowering Hardware Thresholds
Participation of consumer-grade devices: As hardware costs decrease, DePIN gradually expands to consumer-grade devices. Personal devices like smartphones and smartwatches are joining the DePIN network, such as Solana's Saga phone and WatchX smartwatch. Lightweight hardware solutions enable more users to participate with low barriers, such as home sensors and consumer-grade GPUs.
Development of modular hardware: DePIN hardware is moving towards higher modularity and standardization. Device manufacturers are providing modular hardware to reduce development and deployment costs. Users can flexibly combine hardware functions according to their needs to maximize utilization.
Formation of a hardware manufacturing ecosystem: As DePIN projects increase their demand for hardware, a dedicated hardware manufacturing ecosystem for DePIN is gradually forming. The improvement of dedicated hardware design and manufacturing supply chains supports large-scale production of devices. Enhanced local manufacturing capabilities reduce supply chain dependence.
Trend 3: Financialization and Diversification of Economic Models
Hardware asset securitization: The physical hardware of DePIN has the potential for assetization, which may lead to securitization in the future. Similar to traditional REITs (Real Estate Investment Trusts), hardware asset securitization models can provide stable returns for investors. Tokenization of hardware leasing and usage rights allows users to flexibly utilize hardware resources.
Data tokenization and on-chain financial innovation: Data, as a core production factor, achieves efficient trading through the tokenization of the DePIN network. For example, DIMO's car data tokenization not only promotes data trading but also supports on-chain car loans and other financial innovations. Data tokenization can also provide new business models for the development and training of AI models.
Dynamic incentive models: DePIN projects adapt to market changes through dynamic incentive mechanisms, enhancing the flexibility of economic models. Introducing dynamic incentive mechanisms on both the demand and supply sides balances the resource supply and demand of the network. Controlling the inflation level of tokens through token burning mechanisms and locking mechanisms enhances token value.
Trend 4: Deep Integration of Web2 and Web3
Expansion of application scenarios in traditional industries: DePIN is accelerating its penetration into traditional industries, providing decentralized infrastructure support. For example, the IoT communication network provided by Helium supports applications in smart transportation and environmental monitoring. Networks like HiveMapper and DAWN provide data and communication support for shared mobility and short-term rental industries.
Participation of Web2 enterprises: An increasing number of Web2 enterprises are exploring and experimenting with DePIN technology. Enterprises reduce infrastructure costs, such as storage, communication, and energy costs, by participating in the DePIN network. Utilizing the transparency and decentralization of DePIN provides users with more trust and value.
Optimization of user experience: The development of DePIN places greater emphasis on user experience. Designing more user-friendly interfaces for Web2 users lowers the technical barriers for users to switch to Web3. By integrating Web3 wallets and traditional payment methods, users are provided with diverse payment options.
Trend 5: Standardization of the Policy Environment
Formation of regional policy frameworks: As DePIN develops, countries are exploring regulatory frameworks that adapt to decentralized infrastructure. Ensuring that decentralized storage and communication comply with local data privacy regulations. Compliance management of P2P energy trading provides guarantees for the distributed energy market. Supporting regulatory and tax norms for tokenized assets injects trust into the on-chain financial ecosystem.
Global regulatory cooperation: The cross-border nature of DePIN encourages countries to strengthen international cooperation and coordinate regulatory policies. In storage and communication fields, establishing globally applicable content review and data flow standards. Promoting the development of cross-border energy trading markets in the energy sector.
In summary, DePIN, as a new model that deeply integrates blockchain technology with real-world physical infrastructure, is rapidly rising as an important pillar of the digital economy. Currently, DePIN is in the early stages of rapid rise, and its continuous evolution of technological innovation and business models gives it immense application potential across multiple industries. In the future, with technological advancements and growing market demand, DePIN is expected to become a key bridge between the real world and the digital world, shaping new economic models globally and bringing profound changes to society.
