Last week at the #Token2049 Singapore conference, #TrendingTopic was #DePIN and AI. Recent news from Solana and Polygon, and investor interest in the space, has led to strong expectations that DePIN and AI projects will be the standout projects of the next bull run.
DePIN, powered by blockchain’s innovative solutions, can be applied in many areas from energy sharing and data storage to internet access and smart city applications. But what needs do DePINs meet, where are they used, and what challenges do they need to overcome? Here is a full article where you can explore the potential of DePIN projects.
What needs do #DePINs meet?
DePIN projects aim to provide decentralized infrastructure services so that users can benefit from them in a more efficient and fair way. While traditional infrastructures are usually controlled by centralized authorities, DePIN projects decentralize these structures through blockchain technology, allowing users to contribute directly to the infrastructure. These projects can decentralize various services such as internet access, energy sharing, data storage and logistics.
A DePIN project, like an energy-sharing network, lets people sell extra energy from their solar panels directly to others. This helps lower energy costs and encourages using sustainable energy. In the same way, decentralized internet projects let people share their internet connections to create a global network. This model helps close the digital divide by making internet access cheaper and more available.
DePIN brings innovative applications to many sectors by connecting blockchain technology with physical infrastructure. Here are some key use cases of DePIN:
Sure, DePIN allows blockchain to be integrated into the physical world, offering more transparent, reliable, and cost-effective infrastructure management. But does that mean there are no challenges?
Challenges DePIN projects may face
Even though DePIN projects offer new solutions, they also come with some challenges. What are these?
Regulatory Challenges: DePIN projects can face problems with existing laws. Decentralizing important services like energy sharing or internet access can make it hard for governments to regulate.
Technological Barriers: DePIN projects need strong technology systems to function well. Low latency and high-speed connections are required, especially for data storage and internet access. These technological requirements may prevent projects from becoming widespread.
User Education and Adaptation: For decentralized infrastructures to be successful, users need to adapt to these technologies. It is of great importance for users to understand blockchain technology and be aware of wallet usage and security issues. Otherwise, mass adoption of DePIN projects may become difficult.
Security and Trust Issues: The security of decentralized systems is key to building user trust. Although blockchain transactions are transparent, issues such as bugs in smart contracts or cyber-attacks can damage the reputation of DEPIN projects. This is also undesirable.
While these issues can slow progress, DePIN projects like Helium, Filecoin, Arweave, Arkreen, and Hivemapper are still drawing interest from many investors and users in the crypto market. But I’d like to highlight the IoTeX project. $IOTX
IoTeX is a project that connects physical devices to the blockchain network securely and in a decentralized way, with a strong focus on data privacy and security. This is a great example of how decentralized physical infrastructure can work. IoTeX also announced a collaboration with Polygon to improve blockchain scalability using Polygon's Agglayer. Through this partnership, it aims to both help decentralized infrastructures grow and improve network performance. I think IoTeX has once again demonstrated its commitment to advancing DePIN projects and exploring new use cases.
If you listen to Sandeep Nailwal’s speech at the Token2049 conference, you’ll get a clearer picture of what the aggregation layer can achieve and the kind of infrastructure it provides.
IoTeX + Polygon AggLayer = the DePIN Layer for All Chainshttps://x.com/iotex_io/status/1837114493286879613
So far, we have talked about the use cases of DePIN projects, what needs they meet, the legal and technological challenges they face, and the role of decentralized infrastructures in the blockchain ecosystem. But there was actually one more important part. The profit dimension...
DePIN projects not only provide infrastructure services to participants, but also enable them to earn by offering economic opportunities. These projects use blockchain-based incentive mechanisms to reward users and infrastructure providers. Just like @DAO Labs #SocialMining . How does it work?
In DePIN projects, users get rewards by directly contributing to the infrastructure. For instance, in projects like Helium, users earn cryptocurrency by setting up wireless hotspots that help expand the network. Similarly, social mining lets users contribute by creating content or engaging on social media, earning points or tokens in return. What both models share are reward systems that motivate participation, a community-based structure, and a user-driven earning model.
Although DAO Labs does not currently offer a physical infrastructure for social mining, I think it aligns well with the principles of DePIN by offering a reward model that encourages community participation and a decentralized structure. In fact, the support for ILO projects with the launch of the Social Mining V2 version makes DAOVERSE a DePIN project in my eyes. I think we can revisit this issue after V2 is launched.
In conclusion, I think DePIN projects make it cheaper, more transparent and practical to provide services. Thanks to blockchain technology, decentralized networks are created, intermediaries are eliminated and there is a direct connection from the user to the provider. This reduces costs and increases transparency, and I think DePIN projects definitely encourage mass adoption.
So what do you think? Are DePIN projects really the future of decentralization?
