HTX Ventures: Current status and development forecast of DePIN track

Introduction: DePIN - Current Status and Outlook

Decentralized Physical Infrastructure Network (DePIN) is Reshaping the blockchain space through its innovative utilization of existing infrastructure and data-centric business model. DePIN goes beyond traditional IoT frameworks and stands out for its decentralized efficiency and cost-effectiveness.

This report explores the rapidly growing field of DePIN especially within the Solana network, which is known for its solid infrastructure and innovation famous for its applications. The DePIN project prioritizes actual profitability over speculative finance and has played a key role in integrating technologies such as privacy enhancement, zero-knowledge proofs, and artificial intelligence. DePIN's strategic composability with other ecosystems positions it to transform economic systems through data integrity and scalable solutions.

As the leading platform for DePIN Solana embodies the integration of high-performance blockchain technology with physical networks, promising significant financial returns , and create new ways to integrate technology with practical applications.
This article was written by the research team of HTX Ventures. HTX Ventures is the global investment arm of Huobi HTX, integrating investment, incubation and research to identify the best and most promising teams around the world. Currently, HTX Ventures has supported more than 200 projects across multiple blockchain tracks, and some of these high-quality projects have been listed on Huobi HTX for trading.

Conclusion

• Although DePIN is called a decentralized physical infrastructure network, the core business growth logic is not the hardware itself, but how to make more effective use of data, whether it is data storage, data transmission, data sharing, or data usage.

• DePIN does not need to benchmark against traditional IOT, nor does it need to be divided into Web2 or Web3 when thinking, as long as it can be more Utilizing data efficiently and making economic distribution more effectively is a good thing.

• The development of DePIN will be combined with blockchain to solve the problem of data credibility, and at the same time, large-scale protocols will be launched along the Internet of Things , creating the infinite network between people, people, machines, and machines.

• When examining DePIN projects, we should abandon speculation or financial attributes, which are more suitable for defi, meme, Brc 20 Wait for these. When investigating DePIN, you should focus on the true profitability of the project itself.

• What is worth paying attention to in the short term is the composability of the DePIN track with other ecologies, including DePIN x Privacy, DePIN x Gaming, DePIN x ZK, DePIN x AI, in the long term, Depin’s future visionary blueprint includes the gig economy, the sharing economy, and data credibility.

• Solana Network has become the blockchain of choice for DePIN project deployment, Solana DePIN represents more than 10 billion USD FDV and market cap of $4 billion.

• Solana’s advantages in developing in DePIN are:

• Performance advantage overlay technology Upgrade

• Powerful Token standards and ecology System

• Cost advantage

• Concentrated liquidity, strong ecological composability, and unified community

• The developer community is active, with innovative projects and new concepts emerging in an endless stream< /span>

What is DePIN

Messari formally proposed the concept of DePIN (Decentralized Physical Infrastructure Networks, decentralized physical infrastructure networks) in the research report "The DePIN Sector Map" released in early 2023, defining it as "the use of cryptoeconomic protocols Deploy real-world physical infrastructure and hardware networks." In short, DePIN encourages all participants to jointly build a physical infrastructure network through blockchain-based token incentives.

Except for the evolution of the noun, the project of "using cryptoeconomic protocols to deploy real-world physical infrastructure and hardware networks" has actually existed for a long time. For example, the decentralized network Helium was founded in 2013, and the decentralized storage Storj was founded in 2014. These teams have been spontaneously exploring how to decentralize decentralized storage in the fields of communications and storage. Build physical infrastructure networks in a centralized manner. Subsequently, the Internet, artificial intelligence, energy, data collection and other fields also gradually joined. Although the subdivisions are different, the core logic is the same, eventually forming today's prosperous DePIN track.

DePIN The overall status of the track

DePIN sector sorting

The DePIN ecosystem has grown to more than 650 by 2023, according Messari and Depin.Ninjia data projects, with a market value of $ 35 B, covering six sub-industries: computing (250), artificial intelligence (200), wireless (100), sensors (50), energy (50) and Services (25). Messari predicts that the total potential market size of the DePIN sector is around US$2.2 trillion, which may reach US$3.5 trillion by 2028.

According to CMC data, there are DePIN projects that have issued coins, a total of 60 projects that have issued coins, with a market value of  ;1.33 billion US dollars. The current top 100 DePIN projects by market capitalization include FIL, RNDR, HNT, THETA, BTT, AKT and AR. The leading projects in other tracks include IOTX, ANKR, and AI-related projects such as TAO, etc. Judging from the current top 10 projects in the DePIN field by market value, most of them belong to the fields of AI, Storage and Computing. DePIN's current share of the entire Crypto market is very small, lower than Meme, Defi, NFT and other sectors. If compared with the traditional Internet of Things industry, there are 21 projects with a market value of over 100 million, and there are only 4 projects with a market value of over 1 billion.

If inference is based on this data, then in the short and medium term, the potential profit expectation of entering DePIN is about 243 times, while the medium and long term profit expectation is more than 400 times.

Depin Project section disassembly

The reference here is the segment disassembly method of IOTEX, which is divided into two parts: software and hardware.

The hardware part has two major parts, sensors and wireless networks, and the software part has four parts: computing, storage, network distribution, and artificial intelligence.

Depin track branch diagram

Although the DePIN project is called a decentralized physical infrastructure network, all core business logic is It revolves around how to obtain value from data.

• Sensor--responsible for data collection

• Wireless network and network distribution--responsible for data transmission

• Computing section--responsible for data calculation

• Storage section--responsible for data storage

• Artificial intelligence--responsible for data application

So , the DePIN project itself started with hardware, but the real development lies in how to apply data, which is exactly the same as the development model of the traditional Internet economy.

When evaluating the prospects of a Depin project, we must think from the perspective of data. Who has made good use of the data? , whoever masters the data will have a good project.

We need to put aside the speculative part of Crypto and return to the pragmatic value part.

DePIN’s investors

As just mentioned, DePIN In fact, investment institutions and entrepreneurs have always been laying out the track, but the market environment in early 2023 is not suitable, and the new paradigm of DePIN is still being explored, so new DePIN projects are rarely launched. By the end of 2023, whether it was the improvement of the market environment or the exploration and accumulation of entrepreneurs, many projects gradually took shape from the initial concepts, and then began to be launched on the market one after another, and the subsequent actions were captured by the market. At this time DePIN  ; Quickly occupying an important position in a market with weak technological innovation.

For example, Multicoin, Borderless, A16Z, HTX Ventures, etc. VCs all have a large presence in DePIN, and the projects they have invested in are very applicable. , projects with very weak speculative attributes. Of course, compared to their own Portfolio, DePIN's projects only account for a relatively small part.

The following picture adds the head  DePIN The financing situation of the project,

Top DePINs by Capital Raised

Solana DePIN Ecological Research

Solana Network has become the preferred blockchain for DePIN project deployment

• Solana DePIN represents over $10 billion in FDV and $4 billion in market capitalization.

According to CMC, the current market value ranks among the top 500  The Solana DePIN projects include Render Network (RNDR), Helium Network (HNT), Helium Mobile (MOBILE); other DePIN projects include Helium IOT (IOT), Hivemapper (HONEY), etc. Recently, the more popular projects in this field include Solana-related HNT series such as MOBILE and IOT, plus getgrass, a bandwidth network market project that may be about to issue coins.

• DePIN track and Solana network are mutually selected result.

Irreplaceable for Mass Adaption, especially DePIN and Web2 applications. Solana has successfully supported the needs of STEPN, and this is also the project where Web3 really breaks out.

Solana's cNFT provides more cost-effective authorization certificates for DePIN/PoPW nodes, which is a common practice.

The migration of RNDR  and Helium  projects has given the projects themselves stronger capabilities. For example, this transformation has brought new capabilities to Render including real-time streaming, dynamic NFT and state compression. It has significantly improved the performance and scalability of the network, and at the same time opened up richer and more diverse services for users. application scenarios.

Projects such as DePIN are different from high-value DeFi applications and are closer to traditional IoT (Internet of Things) concepts such as edge computing. They value stability and low cost. Price, Solana naturally has an advantage in synchronization speed. Taking the currently popular Helium as an example, the number of IoT devices reaches more than 300,000, and there are more than 3,000 5G devices. Only Solana can meet the deployment of a large number of hardware.

• DePIN brings high value to Solana ecosystem

Projects like Helium have significantly increased the number of active wallets.  Helium alone reports over 60,000 active wallets per month participating in activities such as claiming rewards, staking, delegating, or burning Tokens, while over 30,000 other wallets use other SPL programs, highlighting  ;Helium's impact on Solana's ecosystem.

From a regulatory perspective, DePIN demonstrates Solana’s practical applications in the eyes of regulators and policymakers, reinforcing its legitimacy and brand recognition. Know.

Solana The network advantage is more obvious

• Performance advantages superimposed on technology upgrades

Including high throughput, officials claim Solana can achieve approximately Processing more than 65,000 transactions, and 2500-3000 in daily operations. Other features include fast transaction confirmation, scalability, and block size. After Firedancer is upgraded in the future, the theoretical TPS can reach 1 million+, and the daily TPS is estimated to reach 100,000+. This is also the main factor for Visa and DePIN to choose Solana.

• Powerful Token standards and ecosystem

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A vibrant ecosystem with well-tested DEXs and established standards such as cNFTs (compressed NFTs), pNFTs (compressed NFTs) Programming NFTs), Token Extensions, etc., provides the DePIN project with the basic components to develop and launch their on-chain products.

• Cost advantage

Even after the Cancun upgrade, Solana is still Layer 1 with a lower gas cost. In the header L2, the DA layer has been switched to the Ethereum main network Blob, including ZkSync and Starknet of the ZK Rollup system, and Optimism and Base of the Optimistic Rollup system. The gas fees of the four L2 companies dropped by 1 order of magnitude, but they did not switch to Celestia, and the fees were not reduced to the minimum.

• Concentrated liquidity, strong ecological composability, and unified community

Ethereum and its Layer 2 are highly ideological and compete with each other for liquidity. This is particularly prominent in this round of bull market. There is not much difference between technology and ecology, and the wealth creation effect is not significant. General L2 is no match for competing chains such as Solana.

Under the recent strong promotion of meme coins, the Solana defi ecosystem has also exploded, with TVL also reaching US$3.3 billion. This also means that there will be stronger income products and speculative products on Solana. Coupled with RWA, AI, and DePIN projects, defi products will be more composable.

• The developer community is active, with innovative projects and new concepts emerging in an endless stream

Through hackathons and various incentives, Solana cultivates an active developer community, which fuels the growth of its ecosystem. Subsequently, Top projects such as Magic Eden, Stepn, and Jito appeared. Even during the bear market, Solana still maintained its developer ecosystem and community activities. Through continuous incentives and hackathons, Solana continued to improve its infrastructure and stimulate the development of more innovative applications, further promoting the prosperity of the ecosystem.

• The wealth creation effect is the best marketing tool

Saga 's huge airdrop leads a new way to play on crypto phones and drives the unification of the Solana ecological community, including Solend, Helius, Chads and Solcial, which have announced an airdrop for Saga 2 owners , benefits and freebies. BOME, a meme coin in the recent bull market, has also achieved the miracle of Binance in the sky.

Ecological development



Solana DePIN project summary is shown in the following table:



Solana DePIN ecological summary:

Leading projects: RNDR, Helium

• RNDR, a decentralized rendering platform.

• Helium Network, wireless network project. Since its development in 2014, it has completed more than $350M in financing. Investors include a16z, Deutsche Telekom, Google, Tiger Global and other well-known funds inside and outside the industry. Helium migrated to the Solana blockchain in April this year. HNT Currently CMC ranks 64 .

Second-tier projects: Helium series (MOBILE and IOT), < strong>io.net, Nosana

• MOBILE  and IOT  are projects within the Helium ecosystem,

• IOT: This is the Helium IoT network Protocol token, mined by LoRaWAN Hotspots via data transfer revenue and proof of coverage.

• MOBILE: This is the protocol token of the Helium 5 G network, rewarded for providing 5 G wireless coverage and Helium network verification people. MOBILE Currently CMC ranks 166 .

• io.net, by integrating  from data centers, crypto miners, and established projects like Render GPU network, to use computing power for machine learning applications, positioning itself as a "GPU aggregator". No coins have been issued yet, currently there are 426k Twitter followers. The total amount of Series A financing reached US$30 million, led by Hack VC, with participation from Multicoin Capital, 6th Man Ventures, M13, Delphi Digital, Solana Labs, Aptos Labs and others. At present, the number of GUP miners has reached more than 50,000.

• Nosana, a marketplace that connects a network of user-provided GPUs with consumers aiming to develop artificial intelligence products.

Potential projects: ALEPH, HONEY, Shadow

• ALEPH, storage solution, cross-chain database.

• Launched in November 2022, Hivemapper (HONEY) is a decentralized global map network that rewards people through Drive-to -Earn Model is a contributor to a large collection of 4 K street images using dash cams. In April 2022, it completed US$18 million in financing, led by Multicoin Capital, with participation from industry figures such as the founder of Solana, former Apple Maps executives and Helium CEO. Currently CMC ranks 513 .

• Shadow, as a Filecoin competitor, Shdw Drive leverages high-performance traditional and mobile computing to reduce enterprise-level data Cost of Central Storage – Call this technology “DAGGER”.

DePIN Future Development Forecast

• < p style="text-align: left;">DePIN The track has high infrastructure requirements and needs to meet high throughput requirements, so the DePIN project will choose to operate on the higher-performance Layer 1  Create and even select on Layer 2 or Layer 3 .

• More project possibilities, such as clean energy infrastructure and virtual power plants: projects Daylight and Etheos

• DePIN projects transition to larger platforms, such as Helium and Render, so that smaller DePIN projects can leverage them For development

• DePIN specific chains, we have seen two EVM/substrate chains specifically for DePIN, Examples include Peaq and IoTex. Additionally, one of several blue-chip DePIN projects, Dimo, is also using Polygon CDK to build their chain, demonstrating the demand for application chains.

• DePIN combinability with other ecological tracks. This is especially obvious on Solana, such as the wealth-creating effect of Bonk's airdrop on Saga. In the future, there will be more combinations of Depin and defi to increase profits and speculation, and the combination of Depin and RWA to provide solutions for project financing or provide data in the real world.

For example,

-DePIN x ZK,

With the continuous development of technology, technologies like ZK TLS can effectively prove the authenticity of Web2 or Web3 data sex, open up the path from Web2 data to Web3, DePIN combined with ZK technology will spawn a large wave of Web3 projects that can carry out vampire attacks on Web2 projects, so we should stay tuned.

For example, the Space and Time project, Space and Time is a verifiable computing layer that can be used in Extend zero-knowledge proof on centralized data warehouses to provide trustless data processing for smart contracts, LLM and enterprises. Space and Time connects indexed blockchain data from the chain to off-chain datasets, and uses Proof of SQL to ensure tamper-proof large-scale calculations and prove that query results have not been manipulated.

Proof of SQL is a new ZK-proof developed by Space and Time, which allows data warehouses to generate SNARK cryptographic proofs of SQL query execution to prove the query. Calculations are done accurately, and both queries and data are verifiable tampering.

Developers can use projects to connect indexed on-chain and off-chain data, use SQL to transform data to perform low-latency cache queries and large-scale analysis jobs, and integrate Transform and shape data into patterns specific to your business, publish queries to APIs and build dashboards, while zero-knowledge technology ensures tamper-proof query results are sent to smart contracts or published directly on-chain in a trustless manner.

Currently, Space and Time has indexed Ethereum, Polygon, Sui, Sei and Avalanche, and is continuously supporting more chains and has already accessed Chainlink.

-DePIN x AI, 

De-center The development of chemical physical infrastructure networks may fundamentally change the way data is used, such as decentralized machine learning, of which Bittensor is an example.

Bittensor is an open source protocol that powers decentralized, blockchain-based machine learning networks. Machine learning models are trained collaboratively in TAO and are rewarded based on the value of information they provide to the collective. TAO also allows external access, allowing users to extract information from the network while tailoring network activity to their needs.

-DePIN x Privacy,

Also in front It is emphasized that although DePIN is a decentralized physical network, its core revolves around the utilization of data. If in a large-scale decentralized network, protecting the privacy of data will inevitably become a very important issue. Therefore, if DePIN is destined to develop, privacy protection is absolutely unavoidable. Therefore, we must pay attention to the direction of combining DePIN and privacy.

-DePIN x Gaming

The combination of DePIN and gaming It can be understood from several aspects,

Large-scale decentralized hardware network may bring a better experience to the game to some extent

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The concept of realistic wearable devices + games + metaverse may become popular again

Pass  DePIN hardware facilities may change the incentive mechanism and game experience of the game itself

Reference materials

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https://www.panewslab.com/zh_hk/articledetails/8vy12wz3Ft.html

https://mp.weixin.qq.com/s/DE28WI5hE7OE5s2D-TFLxw

https://foresightnews.pro/article/detail/53218

https://depin.ninja/leader-board

https://depinhub.io/rankings/investors