DePIN- What Is A DePIN In Crypto-2024?

DePIN Projects – Decentralized Physical Infrastructure Network (DePIN).

It involves taking real-world infrastructure like a wireless network and running it with a blockchain-powered system. It can be used in different ways.

Additionally, it is a term used to describe decentralized applications that use tokens to incentivize people to provide services via real-world physical infrastructure/ machines/ devices.

In this guide, we will try to find what is DePIN in Crypto and as well as Blockchain Technology. What are the top DePIN Projects in 2024?

What is a DePIN in Crypto?
The future of DePINs
- The Best DePIN Projects in 2024
Conclusion
FAQs

What is a DePIN in Crypto?

It refers to Decentralized Physical Infrastructure Networks, which use blockchains and token rewards to develop physical infrastructure in the real world across fields such as transport. energy and wireless connectivity.

Essentially, it’s a new area in crypto that uses blockchain technology to build and manage physical infrastructure in a decentralized way.

Imagine things like data centers, wireless networks, or even electric vehicle charging stations, but instead of being controlled by a single company, they are run by a DePIN network.

DePIN refers to infrastructure projects using tokenization to coordinate and incentivize their bootstrapping phase. Individuals build up the infrastructure supply in a decentralized manner and get rewarded with token incentives.

The key idea is to flip the traditional model on its head. The conventional way is for corporations in telecommunications or energy to invest a lot of time and money into building and maintaining infrastructure.

Web3 companies try to outsource this build-up and maintenance process to a token-incentivized army of volunteers and monetize later once the coverage rate is high enough.

This is the same liquidity incentive principle used in other web3 sectors, such as DeFi (yield farming), play-to-earn, or move-to-earn.

DePINs are seen as a Potential Game-changer for various industries.

a. Making infrastructure more accessible and affordable

By crowdsourcing resources, DePINs could lower the barrier to entry for building and maintaining infrastructure.

b. Increasing efficiency and competition

Decentralization could lead to more efficient resource allocation and potentially lower costs.

c. Permissionless – The DePIN framework is inherently open and accessible, allowing any interested party to contribute resources or engage with the services available.

This permissionless nature eliminates barriers like price negotiations or user vetting processes, simplifying the entry for providers and users alike.

Akin to participating in decentralized exchanges or accessing decentralized finance services without the typical encumbrances.

d. Incentivization– DePIN networks are designed to incentivize participation from both providers and users.

Providers have the opportunity to generate income, either passively or actively, depending on the network’s operational model.

Users, too, can establish revenue streams by engaging with DePIN services.

Initiatives such as Nunet exemplify this by revitalizing idle computing resources through an AI-enhanced marketplace, enabling providers to profit from otherwise underutilized assets.

e. Community Control – Decentralization– Echoing the ethos of Decentralized Finance (DeFi), DePIN initiatives decentralize control over infrastructure.

Transitioning power from traditional corporate entities to a collective of individuals who contribute resources towards the development of facilities.

This model ensures that control is evenly distributed among various participants, similar to the distributed nature of miners in a Proof of Work (PoW) blockchain, thereby achieving a high degree of decentralization.

f. Fair Pricing – DePINs introduce a unique pricing strategy that diverges from conventional systems, taking into account the operational expenses of private providers and other network dynamics.

The absence of additional platform fees, due to the non-reliant nature of DePINs on costly infrastructure, contributes to more equitable pricing.

This approach aims to prevent the price gouging commonly associated with centralized models, ensuring prices remain fair and reflective of actual costs.

How Does DePIN Work?

As we are aware by now, blockchain technology has pioneered decentralized networks and Web3.

Essentially, DePIN takes this innovation a step further by decentralizing and tokenizing various infrastructural layers from servers and querying protocols to data collection, analytics, and storage networks.

This holistic decentralization offers a new paradigm for how infrastructure projects can operate as a globally distributed and self-governing network.

Nowadays, privacy has become a paramount concern. With the ever-growing volume of personal data being generated and exchanged online, individuals increasingly seek ways to protect their privacy rights.

DePIN, short for Decentralized Privacy Infrastructure Network, is an emerging blockchain technology that leverages cryptographic tenets to provide users with enhanced privacy protection.

Additionally, DePIN operates on the principles of decentralization, encryption, and user control, empowering individuals to regain control over their data in the digital space.

Technology of DePIN

DePIN’s technology infrastructure primarily decentralizes data storage and processing under encryption, decentralization, and user empowerment.

By doing this, the technology applies a multifaceted approach to data protection. This process cuts the overreliance on centralized entities, mitigating the risks associated with single points of failure.

Using the blockchain technology framework, DePINs distributes data privacy protection mandates across the network rather than conferring it to a certain central control, enhancing protection.

The DePIN rewards participants for the resources used to support the network.

Is Depin a scalable solution to Global infrastructure challenges?

This approach is gaining traction among crypto investors who see it as a scalable solution to global infrastructure challenges.

DePIN aims to transform public infrastructure into a more inclusive, efficient, and participatory system by leveraging blockchain.

The impact of DePIN on Web3 is profound.

What Factors have driven the Move towards Decentralized Infrastructure?

a. Growth of Web3 – Blockchain technology has successfully established a sustainable and globally distributed computing and networking layer, an ideal blueprint for infrastructure networks.

b. Cost Efficiency – Web3 has the potential to achieve greater cost efficiency and democratized value flow using distributed networks.

c. Public Pressure – Growing demands for transparency and accountability in infrastructure management have driven the adoption of systems that allow for more public participation and oversight.

What is the Role of Blockchain in DePIN?

Blockchain plays a critical role in Decentralized Physical Infrastructure Networks(DePINs) by enabling several key functionalities:

DePIN stands at the forefront of marrying cryptocurrency’s decentralized ethos with the physical world’s infrastructural needs.

From Wi-Fi and transportation to data storage and energy, DePIN sets the stage for blockchain’s transparency, efficiency, and security to extend to the real world.

This shift aims to enhance blockchain’s utility and offer users tangible benefits and rewards.

It is worth noting that this sector is currently controlled by three of the world’s largest and most reputable technology firms Microsoft, Google, and Amazon.

Consequently, forging partnerships, developing business, and generating organic demand might prove more challenging in this crypto area than others.

Therefore, success largely depends on the ongoing trend of increased censorship by Big Tech.

a. Decentralization and Transparency

Traditionally, physical infrastructure is controlled by centralized entities. Blockchain distributes control and record-keeping across a network, creating a more transparent system.

Transactions and data are publicly viewable, fostering trust and accountability.

b. Security and Immutability

Blockchain’s core strength lies in its secure and tamper-proof nature. Transactions recorded on the blockchain are irreversible, making DePINs less susceptible to manipulation or fraud.

DePINs facilitate peer-to-peer resource sharing, like data storage or computing power. Blockchain helps manage these interactions securely and transparently.

It can track resource usage and automate payments using tokens native to the DePIN network.

d. Incentivization

Blockchains enable DePINs to create token-based reward systems. If you contribute resources or participate in network maintenance, you can be rewarded with tokens. This incentivizes you and fosters a collaborative network environment.

In essence, blockchain provides the foundation for the secure, transparent, and efficient operation of DePINs revolutionizing how we manage physical infrastructure.

What is the difference between DePIN and DeFi?

DePIN represents a paradigm shift, moving beyond the virtual realm of the metaverse, decentralized finance (DeFi), and non-fungible tokens(NFTs) into the tangible world of physical infrastructure.

Definition

DeFi (Decentralized Finance)- Refers to a broad category of financial applications built on blockchain technology, aiming to decentralize traditional financial services.
DePIN (Decentralized Personal Identification Number)- A security mechanism designed to enhance access control and authentication within the cryptocurrency ecosystem by decentralizing PIN authentication.

Purpose

DeFi- Focuses on decentralizing financial services such as lending, borrowing, trading, and asset management to eliminate the need for intermediaries.
DePIN – Specifically addresses the security concerns related to access control and authentication in the cryptocurrency space, aiming to fortify security measures and mitigate the risk of unauthorized access to digital assets.

Functionality

DeFi- Provides a wide range of financial services through decentralized applications (dApps), allowing users to access financial products without relying on traditional financial institutions.
DePIN- Enhances security by decentralizing the authentication process, eliminating the reliance on centralized authorities to validate PIN codes and access credentials.

Implementation

DeFi- Implemented through smart contracts and blockchain protocols, enabling the creation of decentralized lending platforms, decentralized exchanges (DEXs), and other financial services.
DePIN- Implemented through cryptographic techniques and decentralized networks, leveraging technologies like public-key cryptography to encrypt and authenticate PIN entries.

Scope

DeFi- Encompasses a wide range of financial applications and services, serving various aspects of decentralized finance.
DePIN- Focuses specifically on access control and real within the cryptocurrency ecosystem, addressing security concerns related to wallet access, exchange login, and other crypto-related platforms.

Impact

DeFi – Transforming the traditional financial landscape by giving access to financial services and greater financial inclusion.
DePIN- Enhancing security measures within the cryptocurrency space, instilling confidence in the security of digital asset management, and reducing the risk of cyber-attacks and illegal access.

Nodle is launching its DeFi platform called DePIN on zkSync, which is known for its fast transaction speeds, to make it available on the Ethereum blockchain.

Nodle (NODL), one of the largest DePINs a long-standing force in blockchain innovation, with over 100,000 daily active users on its mobile wallet app and one million token holders, announces it will be launching on zkSync Era.

A cutting-edge zero-knowledge (ZK) technology to scale Ethereum to a billion people, joining the Ethereum community.

The first initiative of Nodle’s DePIN launching on zkSync will be installing its new Click camera app, the world’s first Digital Trust Network.

Click can process transactions off-chain without letting go of security and decentralization, while significantly increasing output and reducing transaction costs.

This marks a significant advancement for Nodle by using blockchain technology for media authentication to fight misinformation and the scalability and efficiency of zkSync.

Scalability

By processing transactions off-chain and gathering them into a single transaction, Nodle achieves significant scalability improvements, high output, and lower transaction fees for consumers and enterprises.

Security

Leveraging Ethereum’s robust security model, Nodle ensures the integrity and immutability of transactions while maintaining user privacy through advanced cryptographic techniques.

Interoperability

Noodle’s EVM enhances interoperability across decentralized applications (dApps) and blockchain networks, seamless asset transfer, and data exchange between different platforms.

Accessibility

zkSync makes Nodle’s network accessible to a broader audience of developers and users within the Ethereum ecosystem, DePIN, and beyond.

Furthering Nodle’s commitment to enter the Ethereum ecosystem, Nodle plans to build a ZK Stack hyperchain and integrate its ZK technology with zkSync in the coming months.

As a hyperchain, Nodle’s DePIN ecosystem will be able to further increase its decentralization and maximize the benefits received from using the ZK technology available on zkSync.

“We are excited to launch the Nodle network on Ethereum through the Layer 2 zkSync.

We look forward to giving to the community by bringing Nodle, the fastest-growing DePIN, with more than 1,000,000 token holders.

As well as, Click, the world’s first Digital Trust Network, to Ethereum,” said Garrett Kinsman, Co-Founder of Nodle.

“By integrating Nodle’s first app, Click, with Ethereum, Nodle brings a much-needed real-world consumer use case to the blockchain.”

Vassilis Tziokas, Head of Enterprise Business Development at Matter Labs, commented, “With the growth of AI, it has become significantly harder to distinguish what is real and what is fake on the internet.

Nodle’s innovative DePIN application, Click, eliminates this issue by ensuring images and videos taken through the application are authenticated with digital proofs, stored on-chain.

Launching on zkSync will allow Nodle to continue revolutionizing its Digital Trust Network while also entering the Ethereum ecosystem.”

Nodle smartphone-based DePIN, Click, continues its focus on decentralization, security, privacy, and scalability making it perfect for digital witnesses, smart missions, and micro-transactions.

Anyone with a smartphone can join the Nodle network today via the Nodle app, available on iOS and Android. The $NODL token is not yet available on Ethereum.

What is zkSync?

zkSync is a specialized zero-knowledge (ZK) technology to scale Ethereum and bring crypto to the mainstream.

By reaching millions of developers and billions of people in need of a technological solution for progress and prosperity.

Deeply rooted in its mission to advance personal freedom for all, the zkSync blockchain network makes digital self-owned which is everywhere available.

It is trustless, secure, reliable, censorship-resistant, privacy-preserving, scalable, accessible, and sovereign.

Present Scenario of DePIN

Recently, various companies have invested in developing DePINs to offer innovative products and services using this technology.

Space and Time (SxT), a Web3-based company, uses a computational framework that enhances zero-knowledge proofs’ scalability within a decentralized data repository.

By facilitating secure data processing for smart contracts, Large Language Models (LLMs), and corporate entities.

SxT integrates blockchain data from prominent networks with external datasets off the chain.

The company has also unveiled the ‘Proof of SQL’ concept, an innovative ZK-proof technology that guarantees integrity in computations at scale, verifying the authenticity of query outcomes while mitigating the risk of manipulation.

How AI and DePIN Will Change Web3

The collision of Web3 services, distributed infrastructure (DePIN), and AI creates entirely new forms of internet experience and we’re just starting to see the future, says Lex Sokolin at Generative Ventures.

The first observation is that some things happen on-chain, and some things happen off-chain.

This is obvious, but worth pointing out. In the case of money, dollar bank deposits are off-chain, DAI is on-chain.

Tokenized real-world assets are off-chain, and wrapped tokens or liquid staking are on-chain. National passports and driving licenses are off-chain, while POAPs and NFTs are on-chain.

The same concepts – money, financial instruments, identity – can be manufactured in different places.

The same is true for artificial intelligence. We can have a world where AI is off-chain but occasionally crosses over to Web3 to take action.

In such a case, we need services that function like oracles or on/off ramps for machine intelligence.

Artificial Intelligence

The same is true for artificial intelligence. We can have a world where AI is off-chain but occasionally crosses over to Web3 to take action. In this case, we need services that function like oracles or on/off ramps for machine intelligence.

The same logic that drove fintech into creating embedded financial products (e.g., Plaid, Stripe) could give GPTs the API software tentacles they need to float around in crypto markets.

Who is the Moonpay for ChatGPT? And, if we do pull AI into our trustless environments, how do we keep it honest and verify its outputs?

Some experts are thinking about how to move the entire LLM and neural network stack onto a decentralized infrastructure.

Since much of the generative AI movement is open-source, like crypto, it is conceptually possible to deploy and maintain the multitude of open-source models on protocols.

That decentralizes the computational load and creates incentives to provide best-in-class machine intelligence services.

This, despite several talented teams pursuing the strategy, is still largely science fiction.

Even centralized AI teams have yet to figure out the shape of demand and profitable unit economics. Splintering the provision of such services into protocols and DAOs at this stage, in our view, is early.

How DePIN-based firms are changing digital protection in Web3

DePIN-based firms are revolutionizing digital protection within the Web3 ecosystem.

These companies are introducing a total shift in online security measures by using decentralized identity protocols.

Rather than relying on traditional passwords or centralized authentication systems. DePIN-based firms utilize decentralized identifiers (DIDs) and verifiable credentials to ensure secure and privacy-preserving authentication processes.

This approach not only enhances the security of user data.

But also reduces the risk of data-breaking incidents and identity theft.

For instance, Dabba, an Indian-based Web3 data protection company is building high-speed wireless networks that reward the Dabba token to its participants for network support.

“Using the principles of DePin networks, Dabba aims to take over 150,000 Local Cable Operators (LCO) in India.

We will provide them with hardware, software, marketing, and customer support. And access to low-cost capital to scale their existing networks,” states Dabba’s website.

The decentralized data management approach used by firms like Dabba helps individuals with greater control over their digital identities.

Thereby, seamless interaction with decentralized applications (dApps) and services in the Web3 landscape.

As a result, DePIN-based firms are at the forefront of shaping a more secure and user-oriented digital environment in the Web3 era.

In DePIN what we like is that it onboards machines into Web3, and machines will need DeFi and its automated financial products, as well as access to intelligence as a service.

In some far-flung future, decentralized fleets of cars may download the latest self-driving models from DePIN AI networks, maintained by various DAOs and incentivized by tokens. Small experiments in this direction exist already.

The future of DePINs

The future of DePIN technology appears promising, poised to impact the Web3 sector in numerous ways.

The annual State of DePIN report is co-authored by Salvador Gala and Sami Kassab.

Co-founders of Escape Velocity (EV3) state, “The combined market cap of DePINs with liquid tokens exceeded $20 billion. Additionally generating ~$15 million in annualized on-chain revenue.”

This statement signifies the potential of the DePIN sector and its impact on the Web3 space.

In Web3, DePIN technology will likely facilitate seamless and trustless interactions between users, dApps, and decentralized platforms. By fostering greater adoption and innovation within the ecosystem.

Moreover, by giving individuals greater control over their digital identities and data, DePIN technology can revolutionize online privacy standards. As well as reshape how users engage with digital services and applications.

What is a Depin project?

DePIN projects utilize token-based incentivization to encourage the development and establishment of physical infrastructures in the real world.

These physical infrastructures include wireless networks, cloud services, mobility networks, and power grids.

The Best DePIN Projects in 2024

Filecoin

Filecoin utilizes the InterPlanetary File System (IPFS) for a decentralized storage solution. Rewarding node providers with FIL crypto for offering disk space.

This creates a market where users buy storage from various contributors who must meet quality standards.

Contributors earn FIL by keeping separate disk space, with rewards increasing over time, thanks to Filecoin’s proof-of-space algorithm.

GhostDrive offers an accessible platform within this ecosystem, featuring data, file conversions, and more.

All at a cost significantly lower than traditional storage services like Google Drive. By showing the efficiency and reasonable cost of decentralized storage networks.

Render(RNDR)

The Render Network as the pioneering decentralized GPU rendering platform, enables artists to dynamically expand their GPU rendering capabilities across global high-performance nodes.

It supports a broad spectrum of calculating tasks, from rendering to machine learning and complex calculations.

Via a swift, efficient, and error-free blockchain-based peer-to-peer network that also secures property rights.

Leveraging Solana, the Render team introduced the RENDER token, rewarding community members who contribute their GPU resources.

Participants were assigned 1.14 million RNDR tokens for their contributions. And to cover migration and gas fees from Ethereum to Solana.

Helium (HNT)

Helium established in July 2019, is reshaping IoT connectivity with its decentralized blockchain network. By allowing individuals to deploy Hotspots that enhance wireless coverage and mine HNT cryptocurrency.

These Hotspots, leveraging Helium LongFi, extend connectivity well beyond traditional Wi-Fi. By supporting a diverse array of IoT applications at significantly reduced costs.

With its Proof of Coverage algorithm, Helium rewards contributions to network growth and data transmission.

Now boasting over 88,000 Hotspots in 8,000 cities and expanding into Helium 5G. Helium is at the forefront of building a next-generation wireless infrastructure. Fostering a robust ecosystem of developers, manufacturers, and IoT applications.

This innovative approach offers a scalable, cost-effective, and secure alternative to conventional internet services. Thereby, marking a leap forward in IoT deployment and wireless access.

Precipitate.AI (RAIN):

Positioned at the common bond of AI and public blockchain technologies. Precipitate.AI delivers Infrastructure as a Service (IaaS) through its Distributed VPS made for AI applications and integrated with EVM-compatible blockchains.

Opting for Web3 currencies and featuring its native $RAIN token, Precipitate.AI incentivizes the development and deployment of DApps with prioritized access to AI utilities and blockchain functionalities.

It is thus paving the way for a smooth merger between AI innovations and the Web3 ecosystem.

MXC (MXC):

Since it started in 2018, MXC has been developing the integration of AI and Blockchain technology to build a decentralized global data network.

Championed by a dedicated mining community and widespread support, MXC’s Data Network introduces cutting-edge solutions like the M2 Pro Miner and MXProtocol to enable a comprehensive data republic.

The MXC token facilitates enhanced data transactions, propelling the AI and blockchain industries forward.

As well as, laying the groundwork for the Web 3.0 and mixed reality metaverse, all while rewarding engagement through Proof of Participation mining.

Conclusion

It’s projected to be a $3.5T industry by 2028,’’ echoes Deutscher. The statement shows the DePIN sector’s importance in the crypto space.

The impending disruption by DePINs extends beyond telecommunications, energy, and cloud computing to various sectors. In recent years, big tech firms have dominated these fields, by substantial resources and capital investments.

However, the tide is set to turn with the arrival of DePIN technology, which makes use of blockchain protocols to bolster privacy measures.

“DePIN will be one of the most important areas of crypto investment for the next decade.

Storage solutions, decentralized wireless networks, and other hardware networks are critical to the industry’s long-term viability.

They could also disrupt a ginormous set of monopolies. Legacy cloud infrastructure is a $5 trillion global market cap sector,” analysts at Messari wrote.

Indeed, the allure of DePIN lies in its promise to decentralize wealth and control associated with infrastructure development.

It enhances the capabilities of the Internet of Things (IoT) by integrating blockchain and community-driven incentives.

Essentially, DePIN pools the necessary computational and storage capacities from various sources, making them readily available for developers and their applications.

FAQs

What is Depin’s bottom-up approach?

DePIN’s bottom-up approach means that the network is collectively owned by its participants, rather than a small group of shareholders. Distributed Infrastructure Cost: A decentralized physical infrastructure network reduces overhead and expenses by leveraging the collective resources of a network’s participants.

What are the different types of DePINs?

DePINs are classified into two broad categories; Physical Resource Networks (PRNs) and Digital Resource Networks (DRNs). PRNs are location-based decentralized physical resource networks. Providers in the network contribute hardware resources related to connectivity, mobility, energy, and similar sectors to offer services.

What is DePINScan?

It’s a general-purpose, off-chain compute environment that’s focused on reducing go-to-market time for DePIN and RWA projects and acting as an “oracle for the real world”. DePINscan is a new data aggregation and visualization tool that shines the light on transparent data in the entire DePIN sector.

What is a Depin & how does it work?

DePINs leverage blockchain technology to improve security, efficiency, and transparency in physical systems, such as renewable energy grids and supply chain operations. DePINs, for instance, can offer unchangeable records of product provenance in supply chain management, ensuring authenticity and transparency from manufacturing to delivery.

Is DePIN a scalable solution to global infrastructure challenges?

This approach is gaining traction among crypto investors who see it as a scalable solution to global infrastructure challenges. DePIN aims to transform public infrastructure into a more inclusive, efficient, and participatory system by leveraging blockchain. The impact of DePIN on Web3 is profound.

Table of contents