Author: HTX Research
Decentralized Physical Infrastructure Network (DePIN) is advancing through its innovation on existing infrastructure Leverage and data-centric business models to reshape the blockchain field. DePIN transcends traditional IoT frameworks and stands out for its decentralized efficiency and cost-effectiveness.
This report explores the rapidly growing field of DePIN, specifically within the Solana network, which is known for its solid infrastructure and innovative 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 economic returns and pioneering new ways to integrate technology with practical applications.
Although DePIN is called a decentralized physical infrastructure network, its core business growth logic does not It's not the hardware itself, but how to make more effective use of data, whether it's 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 use data more efficiently and do things more effectively. Good economic distribution is a good thing.
The development of DePIN will be combined with blockchain to solve the problem of data credibility. At the same time, large-scale protocols will be launched along the Internet of Things to create people and people, people and machines, And the infinite web between machines.
When examining the DePIN project, you should abandon speculation or financial attributes, which are more suitable for defi, meme, Brc20, etc. When examining DePIN, one should focus on the real 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, and in the long term Look, Depin’s future visionary blueprint includes the gig economy, the sharing economy, and data credibility.
The Solana network has become the blockchain of choice for DePIN project deployment, with Solana DePIN representing more than $10 billion in FDV and a market capitalization of $4 billion.
Solana’s advantages in developing DePIN include:
Performance advantages superimposed on technology upgrades
Powerful Token standards and ecosystem
Fee advantage
Concentrated liquidity, strong ecological composability, and unified community
The developer community is active, with innovative projects and new concepts emerging in endlessly
Messari formally proposed the concept of DePIN (Decentralized Physical Infrastructure Networks) in the research report "The DePIN Sector Map" released in early 2023. It is defined as “the deployment of real-world physical infrastructure and hardware networks using cryptoeconomic protocols.” 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 "utilizing 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 spontaneously explored how to build physical infrastructure networks in a decentralized manner in fields such as communications and storage. 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.
According to Messari and Depin.Ninjia data, the DePIN ecosystem has grown to more than 650 projects in 2023. The market value is $35B , 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 approximately US$2.2 trillion, which may reach US$3.5 trillion by 2028.
According to CMC data, there are 60 DePIN projects that have issued coins, with a market value of US$1.33 billion. The current top 100 DePIN projects by market value 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 currently accounts for a very small share of the entire Crypto market, lower than Meme, Defi, NFT and other sectors. If compared with the 21 projects in the traditional Internet of Things industry with a market value of over 100 million, there are only 4 projects with a market value of over 1 billion.
If extrapolated according to 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.
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
DePIN project Although it is called a decentralized physical infrastructure network, all core business logic 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 starts with hardware, but the real development lies in how to apply data well, which is the same as The development model of the traditional Internet economy is the same.
When evaluating the prospects of a Depin project, we must think from the perspective of data. Whoever uses the data well and 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.
As mentioned just now, the DePIN track has actually been deployed by investment institutions and entrepreneurs, 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 was in the technology It quickly occupied an important position in a market that lacked innovation.
For example, VCs such as Multicoin, Borderless, A16Z, HTX Ventures, etc. all have a large presence in DePIN, and the projects they invest are all very applicable and weak in speculative attributes. Of course, relatively Judging from their own portfolio, DePIN’s projects only account for a relatively small part.
The following figure supplements the financing status of the head DePIN project,
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Solana network has become the preferred blockchain for DePIN project deployment
According to CMC, the current top 500 Solana DePIN projects by market value include Render Network (RNDR), Helium Network (HNT), and Helium Mobile (MOBILE); the remaining DePIN projects include Helium IOT (IOT), Hivemapper (HONEY) )wait. 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.
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 application scenarios for users.
Projects like 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 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.
Projects like Helium have significantly increased the number of active wallets. Helium alone reports more than 60,000 active wallets participating in activities every month, such as claiming rewards, staking, delegating or burning tokens, while more than 30,000 other wallets use other SPL programs, highlighting Helium's impact on the Solana ecosystem.
From a regulatory perspective, DePIN demonstrates Solana’s practical applications in the eyes of regulators and policymakers, enhancing its legitimacy and brand recognition.
Including high throughput, officials claim that Solana can handle more than 65,000 transactions per second. Daily operation also has 2500–3000. 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.
A vibrant ecosystem with fully tested DEX and established standards, such as cNFTs (compressed NFTs), pNFTs (programmable NFTs), Token Extensions, etc., provide DePIN projects with the basic components to develop and launch their on-chain products.
Even after the Cancun upgrade, Solana is still Layer 1 with lower gas fees. 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.
Ethereum and its Layer 2 are highly ideological and compete for liquidity. This is particularly prominent in this round of the 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 reaching US$3.3 billion. This also means that there will be stronger revenue products and speculative products on Solana. Coupled with RWA, AI, and DePIN projects, defi products will be more composable.
Through hackathons and various incentives, Solana has cultivated an active developer community, which has strengthened its ecosystem. Development provides the impetus. Subsequently, Top projects such as Magic Eden, Stepn, and Jito appeared. Even during the bear market, Solana still maintained its developer ecology 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.
Saga’s huge airdrop leads a new way to play crypto phones and drives the unification of the Solana ecological community, including Solend, Helius, Chads and Solcial, which have been announced as owners of Saga 2 Provide airdrops, benefits and giveaways. As a meme coin in the recent bull market, $BOME also achieved the miracle of being listed on Binance in 3 days.
The Solana DePIN project is organized as shown in the following table:
RNDR, a decentralized rendering platform.
Helium Network, wireless network project. Since its development in 2014, it has completed more than $350M in financing, with investors including 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 ranks 64th in CMC.
MOBILE and IOT are projects within the Helium ecosystem,
IOT: This is the protocol token of the Helium IoT network, mined by LoRaWAN Hotspots through data transfer revenue and proof of coverage.
MOBILE: This is the protocol token of the Helium 5G network, rewarded to those who provide 5G wireless coverage and Helium network verification. MOBILE currently ranks 166th in CMC.
io.net leverages computing power for machine learning applications by integrating GPU networks from data centers, crypto miners, and established projects like Render, positioning Calls itself a "GPU aggregator". No coins have been issued yet, and currently there are 426k Twitter followers. The total 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, etc. At present, the number of GUP miners has reached more than 50,000.
Nosana, a marketplace that connects user-provided GPU networks with consumers aiming to develop artificial intelligence products.
ALEPH, storage solution, cross-chain database.
Launched in November 2022, Hivemapper (HONEY) is a decentralized global mapping network that rewards contributors for collecting extensive 4K street imagery using dash cams through a Drive-to-Earn model. In April 2022, it completed US$18 million in financing, led by Multicoin Capital, with participation from industry figures such as Solana founder, former Apple Maps executive and Helium CEO. The current CMC ranking is 513.
Shadow, as a competitor to Filecoin, Shdw Drive uses high-performance traditional and mobile computing to reduce the cost of enterprise-level data center storage - calling this technology "DAGGER".
The DePIN track has high infrastructure requirements and needs to meet high throughput requirements, so the DePIN project will choose to build on Layer1 with higher performance, even Will choose on Layer2 or Layer3.
More project possibilities, such as clean energy infrastructure and virtual power plants: Project Daylight and Etheos.
The DePIN project is transforming into large platforms, such as Helium and Render, so that smaller DePIN projects can use them for development.
DePIN-specific chains, we have seen two EVM/substrate chains specifically for DePIN, such as Peaq and IoTex. Additionally, one of several blue-chip DePIN projects, Dimo, is also using Polygon CDK to build their chain, showing the demand for application chains.
The composability of DePIN 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 returns and speculation. The combination of Depin and RWA will provide solutions for project financing or provide data in the real world.
For example,
With the continuous development of technology, technologies like ZK TLS can effectively prove Web2 or Web3 data The authenticity of the project will 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. We should keep an eye on this.
For example, the Space and Time project,
Space and Time is a verifiable computing layer that can extend zero-knowledge proofs on decentralized data warehouses and provide solutions for smart contracts, LLM and Enterprises provide trustless data processing. 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 that allows data warehouses to generate SNARK cryptographic proofs of SQL query execution, proving that query calculations are completed accurately and that both the query and the data are verifiable tampering.
Developers can use projects to connect indexed on-chain and off-chain data, transform data using SQL to perform low-latency cached queries and large analytics jobs, transform and shape data to be specific to your business mode to publish queries to APIs and build dashboards. At the same time, zero-knowledge technology can ensure that tamper-proof query results are sent to smart contracts or published directly on the 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 also been connected to Chainlink.
The development of decentralized 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.
It has been emphasized before 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.
The combination of DePIN and games can be understood from several aspects,
Realistic wearable devices + games + metaverse The concept may become popular again
Through DePIN hardware facilities, the incentive mechanism and game experience of the game itself may be changed
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