DePIN — — The Superposition of Dual Curves Constructing a Decentralized Value Network
DePIN — — The Superposition of Dual Curves Constructing a Decentralized Value Network
Introduction
DePIN is gradually achieving large-scale interaction between the physical world and Web3, progressively disrupting the operational modes of traditional infrastructure. By combining sensors, wireless networks, computing resources, AI, and blockchain technology, and utilizing crypto-economic incentives to drive crowdsourced development, DePIN projects are marked by a significant feature: the business model incorporates hardware revenue as the first growth curve, supplemented by monetizing data services to form a second growth curve. This dual-curve approach is a key factor in DePIN’s ability to lead the current growth cycle, illustrating how DePIN projects create substantial wealth effects in constructing decentralized infrastructure networks, ultimately forming a large-scale decentralized value network.
1. Constructing a Decentralized World of Interconnected Things
Decentralized Physical Infrastructure Networks (DePIN) were defined in Messari’s 2023 report as “deploying real-world physical infrastructure and hardware networks using crypto-economic protocols.” This concept envisions an imaginative application scenario: common infrastructures around us, including communication base stations, electric vehicle charging piles, photovoltaic panels, billboards, and the data storage and computing equipment behind the operation of the internet, will no longer be controlled by centralized entities and institutions. Instead, they will be divided into equally sized units, controlled by individuals or large-scale miners. Additionally, physical infrastructure of the same kind will be highly standardized and scaled, forming a carpet-like coverage.
Through decentralization, the layout and utilization of infrastructure can achieve higher efficiency and lower costs while enhancing the overall system’s security and resilience. Furthermore, from energy production to data processing, various facilities have the potential to transition to a decentralized model. The combined market size of the industries involved in DePIN already exceeds $5 trillion. Therefore, Messari predicts that the potential market size of the DePIN field is estimated to be about $2.2 trillion, expected to reach $3.5 trillion by 2028.
1.1 DePIN Track Segmentation
The DePIN track covers six subfields: computing, AI, Wireless, Sensors, Energy, and Services. Analyzing DePIN from a supply chain perspective, it can be divided into:
· Upstream: Hardware manufacturers and supply-side users acting as “miners.”
· Midstream: Project platforms, blockchains responsible for data validation and token settlement, and on-chain Layer 2 protocols serving DePIN; modular service components for developing and managing DePIN networks (such as platform interfaces, data analysis, and standardized services), SDK toolkits for DePIN development, API interfaces, etc.
· Downstream: dApp applications and interfaces that connect to the demand side.
Aside from IoTeX and the former Helium (now migrated to Solana), most DePIN projects rarely cover every aspect of the DePIN business. They usually choose Solana or IoTeX as the settlement layer for token economies. AI and cloud computing projects in the subfields focus more on on-chain settlement and the development and management of project platforms. The underlying hardware devices use middleware to schedule idle electronic devices, such as smartphones or computers equipped with high-performance consumer-grade GPUs.
1.2 Overview of the DePIN Industry Development
According to DePIN Ninja data, there are currently 1,215 DePIN projects online with a total market value of approximately $43 billion. Among them, projects that have issued tokens and are listed in the DePIN subcategory on Coingecko have a combined market value exceeding $25 billion. In October of last year, this figure was only $5 billion, a fivefold increase in less than a year, demonstrating the rapid growth of the DePIN industry.
This indicates a growing demand and recognition for decentralized physical infrastructure networks in the market. As more projects go live and application scenarios expand, the DePIN industry is poised to become an important field for the integration of blockchain technology with real-world applications.
2. Insights from DePIN Business Logic
The prototype of DePIN can be traced back to the concept of IoT + Blockchain from the previous cycle. Projects like Filecoin and Storj transformed centralized storage into decentralized operation modes through crypto-economic models and found real applications in the Web3 ecosystem, such as on-chain NFT storage and resource storage for DApps’ front and back ends.
IoT + Blockchain merely highlighted the decentralization (“De”) aspect, whereas DePIN emphasizes the construction of physical infrastructure and large-scale interconnected networks. In DePIN, “PI” stands for Physical Infrastructure and “N” stands for Network, referring to the value network formed after DePIN hardware reaches a certain coverage scale.
The most typical example is Helium. Founded in 2013, Helium only decided in 2018 to use blockchain as an incentive mechanism for decentralized IoT deployment. To date, Helium meets almost all the elements of DePIN: node economy, miner model, value network, crowdsourcing incentives, and is a leading project in the DeWi (Decentralized Wireless) field. Additionally, late last year, Helium Mobile launched a $20 communication package service in cooperation with T-Mobile, targeting traditional users. When users transmit data over the Helium network, they not only receive token rewards but also enjoy reliable communication services. At the same time, Helium helps T-Mobile address signal coverage issues in remote areas of the United States, creating a win-win situation for all three parties. The large number of traditional users at its end has the potential to drive DePIN to break new ground and accelerate the mass adoption of blockchain technology and Web3 networks.
Both Helium and Filecoin fall under the DePIN category, but the difference lies in Helium’s greater emphasis on hardware. This allows it to support the growth of data services, the second curve, through hardware revenue, thereby building an independent ecosystem and reaping both Alpha and Beta benefits. Although Helium faced issues such as false advertising last year and difficulties due to the obscure programming language used for development, a series of actions at the end of the year reignited Helium’s second curve growth. As the largest-scale DePIN project to emerge, it undoubtedly brings us some insights into the DePIN ecosystem.
3. Explosive Growth of DePIN Based on the Dual Curve Theory
The “second curve” is a concept in management and innovation theory initially proposed by management scholar Charles Handy. It refers to the need to introduce new innovations or transformations to start a new growth curve when an organization, product, or business reaches the peak of its traditional growth curve, thereby avoiding stagnation or decline.
From the experience of previous successful DePIN projects, DePIN’s business logic naturally points to selling hardware as the first growth curve for project development. The monetization of the data value network builds on the first curve, serving as the guiding principle for the second growth curve.
Product development and operational capabilities are crucial to ensuring the growth of the first curve. To initiate the growth of the second curve, two abilities are needed: the organizational capacity of a decentralized system and the service capability for the demand side.
In the DePIN ecosystem, this means that project developers must first ensure the proper functioning of the data value network based on having the ability to organize a hardware network capable of handling large-scale data transmission. Only then can the demand side be smoothly integrated, ultimately providing high-quality, standardized data services. This completes the dual growth of the two curves, forming a positive cycle within the project ecosystem.
3.1 Hardware Value as the First Curve of Value Creation
On the first growth curve, a business experiences initial rapid growth, then gradually reaches its peak. The growth driver for the first curve of DePIN projects comes from the revenue and profits generated from hardware sales.
Traditional infrastructure, especially in the fields of data storage and communication services, follows a linear business logic driven by centralized service providers or entities: in the early stages, it requires investment in building infrastructure, then providing services to end users (consumers) once the facilities are complete. Therefore, developing such businesses often necessitates the involvement of large enterprises to bear the high initial costs, including hardware purchases, land leases, deployment, and hiring maintenance personnel. Referencing BCG’s deconstruction of the data value network, the traditional IoT operation model creates a data value chain as shown in the left image below, where data is transmitted as a production element in an independent and linear manner, and each ecosystem operates independently.
In contrast, DePIN projects decentralize the supply side and adopt a crowdsourcing approach to establish the hardware network.
Thus, the first step of decentralizing the centralized infrastructure is crucial to achieving the first curve growth of DePIN projects. DePIN project developers must initially promote themselves, spread their narrative, and attract supply-side users through various operational means such as pre-selling “mining machines” and offering airdrops with purchases. This approach shifts the significant infrastructure investment costs to supply-side users, enabling a low-cost, lightweight launch. Supply-side users become “shareholders” of the project by owning hardware, and with the expectation of earning through future mining, they help the project deploy the hardware network.
Moreover, unlike traditional centralized equipment providers, the update and maintenance of DePIN equipment are jointly completed by the project developers and miners. The equipment providers are only responsible for the R&D and sales of the updated equipment, while supply-side users handle the updates and maintenance. In the collaborative process of maintaining and building the hardware network, interactions with the project developers and middleware strengthen the miners’ (supply-side users) sense of community and identification with the DePIN project.
If a DePIN project developer can smoothly run through narrative marketing, mining machine sales, and community operations, all the elements of the project’s first growth curve will be assembled. This ultimately forms a cycle of increasing network coverage, increasing token incentives, and attracting more miners to join the first curve.
The following is the current number of active nodes data, with Hivemapper, Helium, and Natix ranking in the top three, each having deployed over 100,000 nodes worldwide.
Among them, Helium and Hivemapper have shown outstanding business performance:
Helium
· Helium is a decentralized wireless network, with its main services including Helium Hotspot, which provides low-power wide-area network (LoRaWAN) coverage, and Helium Mobile, a mobile communication service launched in collaboration with T-Mobile and Telefónica (TEF).
· On January 25th, it launched a $20 communication package with T-Mobile, gaining 93,000 subscribers in 5 months.
· It entered the Mexican market, which has a population of 126.7 million, in partnership with Telefónica (TEF), one of Mexico’s telecom giants, further enhancing Helium’s revenue sources and market influence.
Hivemapper
· Hivemapper is a decentralized mapping platform that aims to create a global, real-time updating map ecosystem through blockchain technology and crypto-economic incentives. Hivemapper’s main product is the HiveMapper Dashcam, a dashcam that allows users to collect geographic data while driving.
· Priced at $549, with the current number of deployed nodes, it is estimated that Hivemapper has generated over $60 million in hardware sales revenue.
· To date, Hivemapper’s map data collection network covers most of Europe and the Americas, and its data service revenue has seen significant growth.
In terms of hardware revenue, other projects have also achieved notable growth through different approaches. For example, Jambo has achieved excellent sales in the African market by using mobile phones as a selling point. OORT, with its technical barriers in cloud computing and edge computing, has achieved significant hardware sales revenue through its innovative model. Ordz Game, as a GameFi project, has cleverly integrated DePIN elements to gain traction. These projects have successfully broken through in hardware revenue through their innovative models and technological advantages, exploring new ways for various industries to integrate DePIN.
Jambo
· Web3 Wallet: Jambo aims to achieve mass adoption of Web3 in the African market by using DePIN + wallet. By selling affordable Jambo phones and promoting them as Web3 phones, it attracts a large number of traditional Web2 users. With a pre-installed Web3 wallet app, users can play games or watch ads to earn native JAMBO tokens. Jambo collaborates with major African data service providers to sell the generated data, closing the business loop.
· Future Plans: Jambo phones will also launch on-chain data mining and other incentive activities. With pre-installed dApps, users can manage DePIN phones using Jambo phones. Currently, Jambo phones are available in over 120 countries and regions, mainly in Africa. Priced at $99, over 400,000 units have been sold, activating 1.23 million non-custodial wallet addresses.
OORT
· OORT is a decentralized, verifiable cloud computing platform designed for artificial intelligence applications. It utilizes resources from data centers to local edge devices worldwide, with a blockchain-based proprietary verification layer ensuring the security of all transactions and computations, from data crowdsourcing and labeling to model training and local inference.
· Physical Device: Sold for $379, over 5,500 edge nodes have been deployed globally, covering most countries in the Americas, Europe, and Asia. These nodes collectively form a robust decentralized edge computing network, providing reliable data processing and computing power for AI applications.
Ordz Game
· Ordz Game: As the first gaming platform in the Bitcoin ecosystem, Ordz Game uses the Ordinals protocol to mint each retro game level as an NFT. Players can earn points by playing games, with top-ranking players receiving Games tokens (formerly BRC20 token ORDG) based on their scores, promoting a “Play to Earn” model.
· Current Status: Entering the fifth phase of testing, having completed four quarters of public testing, with over 260,000 unique wallet addresses logged in. It will soon launch the handheld version BitBoy, priced at 0.01 BTC per unit. The initial 1,000 pre-sale units, which included an NFT, sold out within the first few hours, and the standard version has sold over 2,000 units. BitBoy acts as Ordz Game’s “mining machine,” empowering the Games token issued by the platform, creating a flywheel effect of playing games for mining, token incentives, attracting more players, and increasing token value.
The above examples all illustrate that hardware sales play a crucial role in the initial revenue of DePIN projects. It not only affects the project’s early cash flow but also determines the speed of large-scale hardware network deployment. Only with the stable development of the hardware network can DePIN projects smoothly transition to the second stage of the data value network, initiating the second wave of the growth curve.
Apart from specific scenarios requiring dedicated data acquisition (such as Hivemapper dashcams collecting road condition data), most consumer-end data can actually be mined through personal consumer-grade devices like smartphones and smartwatches. The supply chain for such projects is already very mature, allowing the project team to scale up and reach a broader consumer market without extensive R&D investment. Due to the high profit margins of these devices, project teams can achieve significant early revenue growth.
Furthermore, large DePIN hardware (such as photovoltaic panel arrays) may be able to be tokenized as Real World Assets (RWA) on the blockchain in the future. Combined with mature on-chain DeFi Layer 2 protocols, this could unlock more product innovations and financial services, enhancing the liquidity of the hardware network and the vibrancy of the hardware trading market.
3.2 Data Value and Monetization of Network Value as DePIN’s Second Growth Curve
As mentioned in the value chain above, the business logic of traditional models is relatively linear and closed. After reaching the peak of incremental growth, the only options are to find ways to increase user retention rates and increasingly competitive new user acquisition activities. Additionally, if it is a traditional infrastructure provider, they also have to bear the costs of updating and maintaining the facilities themselves. Therefore, after reaching the ceiling of incremental growth, they are likely to face significant decline.
In contrast, DePIN projects accumulate initial revenue by selling hardware. Before the first growth curve of hardware sales reaches its critical point, and before the business of selling equipment hits its peak, the second growth curve is initiated. The core of the second growth curve lies in establishing a data value network based on the now mature, large-scale hardware network.
DePIN forms a data value network under the DePIN model by aggregating a series of value chains, decentralizing the supply side, and utilizing public blockchains to aggregate multiple demand sides.
Despite DePIN projects emphasizing their physical nature, their core business logic revolves around how to derive value from data. After data is verified and its ownership established through the blockchain storage layer, it becomes a highly liquid tradable object that circulates within the data value network. This data not only flows between different ecological projects but also exchanges directly or indirectly between the supply and demand sides.
Once the data value network can maintain a positive incentive cycle — usually determined by token economics, the number of nodes, and a good match between supply and demand — the entire ecosystem will generate a significant wealth effect around the data.
Token Economics as the Economic Foundation of the Value Network
Among them, token economics, serving as the economic foundation of the data value network, is crucial to the smooth operation of DePIN projects. The two main models currently are BME (burn and mint equilibrium) and SFA (stake for access).
BME is a token burn mechanism where tokens are burned after users on the demand side purchase services, with the degree of deflation determined by demand. In other words, the higher the demand, the higher the token value. SFA requires users on the supply side to stake tokens to become qualified miners, with the degree of deflation determined by supply; the more miners providing services, the higher the token value.
This depends on whether DePIN products rely more on the demand side or the supply side. Generally, middleware or platform-based DePIN projects prefer using SFA, where the scale and quality of service on the supply side determine the project’s upper limit. Examples include OORT and Helium, which require users on the supply side to stake tokens to become nodes. Demand-side C-end application-type DePIN projects are better suited to using the BME model to maintain business operations, with similar projects including Render Network.
BME and SFA constitute the core framework of DePIN projects, while empowering tokens further enhances token economics. For instance, using points as a pre-mining commitment to miners, converting to tokens after issuance at a certain ratio, or adopting a points + tokens economic model. Tokens can also be given governance functions, allowing holders to participate in major network decisions, such as network upgrades, fee structures, or treasury reallocation. Staking mechanisms encourage users to lock tokens, maintaining token price stability. Project parties can also use part of their revenue to buy tokens and pair them with other major cryptocurrencies or stablecoins to add to liquidity pools, ensuring sufficient token liquidity for users to trade without significantly impacting prices. These mechanisms help ensure that the interests of users on both the supply and demand sides align with those of the project party, leading to the project’s long-term success.
DePIN Value Network Will Promote the Perfection and Growth of the AI Industry
Once a large-scale data network achieves smooth operation and the supply side can provide stable services, a significant portion of the final value of the DePIN network will flow into the AI industry.
AI has become a crucial driver of global economic transformation and industrial upgrading, relying heavily on data and computing power for its development and application. Since 2012, the demand for computing power has grown over 300,000 times, far exceeding Moore’s Law’s 12-fold increase. Undoubtedly, the explosive growth of AI has a massive pull on computing power demand.
In theory, decentralized computing networks like io.net and Render Network can mobilize distributed idle computing resources to fill the huge demand for computing resources, tracking and storing data through blockchain technology to ensure the security of AI training, and distributing incentives using cryptocurrency. Although this business process is highly convincing, actual demand still needs further validation. In the consumer market, these decentralized computing networks will directly face fierce competition from traditional enterprises like AWS, Azure, and GCP. In the business market, these networks can only reach small and medium-sized enterprises that lack the capacity to build their own computing networks, while large-scale enterprises prefer using mature and stable traditional centralized cloud service providers.
Moreover, data for AI training has already been declared in short supply. According to research by Epoch AI, if current data consumption and production rates remain unchanged, humanity will exhaust low-quality language data between 2030 and 2050, high-quality language data by 2026, and visual data between 2030 and 2060.
AI requires massive amounts of raw and credible data to support its training process, making DePIN particularly important in this context. The numerous devices deployed by DePIN can acquire vast amounts of raw data at very low cost, and their decentralized distribution makes the data more valuable and unique. Therefore, data collected by sensors in DePIN subfields is naturally beneficial for AI model training.
Overall, based on the strong demand for computing power and data by AI, decentralized cloud computing and sensors providing data for AI training are the two most promising DePIN subfields to first realize the data value network.
3.3 Middleware Infrastructure as a Key Role in Bridging the Two Growth Curves
At the beginning of the article, the DePIN supply chain was analyzed, highlighting middleware as the crucial channel bridging the physical world to the digital world. If the first curve is driven by hardware and the second curve is driven by data, then a key role is needed to smoothly transition from the first curve to the second. This role involves connecting devices and the supply-demand ends of miners and users, providing standardized interfaces and toolkits, public chains or Layer 2 chains for token transactions and settlement, and protocols to enhance liquidity.
First is the blockchain, which serves as the settlement layer for DePIN project tokens and primarily handles token settlement and data verification:
Solana
· Currently, Solana is the preferred platform for most DePIN projects due to its low latency and high performance, making it suitable for DePIN project deployments. For example, Helium and HiveMapper are deployed on Solana. However, mainstream public chains initially designed for transactions and SDK toolkits optimized for DePIN projects do not fully meet the needs of DePIN projects.
· DePIN projects require custom public chains as their foundation, with features such as data verification and AI integration. For instance, the Near chain emphasizes its AI narrative, while IoTeX has been focusing on its custom blockchain for IoT devices since the last cycle. Such custom public chains better meet the unique needs of DePIN projects, ensuring efficient data processing and device connectivity. IoTeX also provides a range of standardized interfaces and plug-and-play open tools, allowing a DePIN application to quickly deploy on the IoTeX chain.
Peaq
· Peaq is a chain designed specifically for DePIN. Peaq includes a range of multifunctional modular DePIN features, including self-sovereign identity for machines/things (peaq ID), role-based access management (peaq access), peer-to-peer payments (peaq pay), and data verification (peaq verify). The Web3 Machine Control Center (peaq control) provides a comprehensive way to connect any machine, device, sensor, vehicle, or robot to the network. Project developers can easily deploy DePIN applications on the Peaq chain using these modules. Peaq also enables seamless multi-chain interactions, allowing data from other projects to be easily migrated to the Peaq chain.
Furthermore, middleware that connects devices and the DePIN network is also crucial. It provides very user-friendly one-stop services for developers who want to enter the DePIN space but are not familiar with crypto-economics. This is one of the essential requirements for the prosperity of the DePIN ecosystem. These projects not only include developer-friendly tools and one-stop services like DePHY and Swan but also specialized re-staking protocols for DePIN such as Parasail, aimed at enhancing the liquidity and value utilization of native tokens in the DePIN network.
DePHY
· DePHY provides open-source hardware solutions, SDKs, and tools for DePIN projects. By synchronizing blockchain with 500ms off-chain network nodes, it significantly reduces the manufacturing and network message delivery costs for hardware products bridging to the blockchain.
· For example, Starplug, a product developed by Starpower based on DePHY, is a smart plug used to record users’ electricity usage and consumption, rewarding them with tokens. DePHY open-sourced various customizable hardware design schemes to help Starpower quickly complete Starplug’s hardware design and enter mass production. Additionally, DePHY shared its hardware production resources, offering significant manufacturing convenience and cost efficiency for Starpower. Starpower also adopted DePHY’s DID system and open-source hardware solutions with built-in TEE modules to ensure data security and immutability.
Swan Chain
· Swan Chain (formerly FilSwan) is a full-stack AI intelligent chain based on OP Stack technology, focusing on a decentralized cloud computing network serving AI. Through Swan Chain, enterprises, data centers, cloud providers, and cryptocurrency mining operators can contribute idle GPU resources to the network and monetize computing assets through a UBI incentive model for stable income. Meanwhile, enterprises, developers, and AI enthusiasts can leverage Swan Chain’s global computing resource network to build and deploy decentralized AI models and applications, potentially saving up to 70% on computing costs.
· Developers often encounter complexity issues when managing tokens and using various SDKs, distracting them from the main functionalities of their products. The lack of convenient Web3 application access tools hinders the efficient creation of decentralized applications (dApps), slowing development and limiting economic potential. In response, Swan Chain offers a set of development tools that allow developers to access resources across multiple blockchains, simplifying storage provider selection and data management. By introducing a cross-chain consensus layer, it provides a comprehensive infrastructure solution, helping developers seamlessly access Web3 resources across multiple blockchain networks. These tools include payment channels and Web3 infrastructure, simplifying the development process.
· Additionally, Swan Chain supports using a single cryptocurrency to pay for all Web3 services on different chains, reducing barriers and saving developers time and effort in integrating various Web3 services.
· Public information indicates that during the testnet phase, Swan Chain had over 25 million active addresses on the chain. The network’s computing providers exceeded 2000, offering over 2100 GPUs, with computing resources covering 17 countries and over 30 regions worldwide, ensuring efficient execution of computing tasks and data security. As the only AI DePIN project in Binance Labs’ fourth incubation program, Swan Chain received investments from Binance Labs, SNZ, Waterdrip Capital, Protocol Labs, Chainlink, and other institutions.
Unibase
· Current data availability solutions like EigenDA, Celestia, and Avail are mainly designed for ledger transactions, presenting issues: they cannot support AI and DePIN’s big data scenarios in terms of performance and capacity, and rely on DAC or DAS for off-chain data verification, lacking Ethereum’s security and legitimacy.
· AI training data has always required addressing data trustworthiness. Unibase provides a zero-knowledge proof-based AI data verification solution, allowing anyone to securely and economically deploy decentralized, verifiable, and autonomous AI applications on Unibase. Unibase is also a DA layer and storage layer, supporting millions of DePIN devices to contribute storage, computing power, and bandwidth for mining, offering secure, highly available storage and data verifiable inference services, and supporting DePIN in providing high-quality native data for AI training. Compared to Swan, Unibase’s primary service targets are closer to AI applications.
Parasail
· Parasail is a re-staking protocol specifically serving DePIN. DePIN projects have the potential to generate sustainable income through decentralized infrastructure and services, but their widespread adoption and trust-building are often difficult and costly. Parasail provides economic guarantees for DePIN services by activating idle assets (e.g., staked or re-staked tokens) in mature networks, helping DePIN projects attract more users and service providers.
· Currently, Parasail mainly provides re-staking services on the Filecoin chain, with plans to expand to IoTeX, Arbitrum, and Ethereum chains. Here is how Parasail works using FIL as an example:
o Staking FIL Tokenization: Storage Providers can stake FIL and mint pFIL tokens at a 1:1 ratio.
o pFIL Open Market: Storage Providers can sell pFIL for liquidity, and token holders can buy pFIL to gain FIL mining returns.
o Risk Recovery and Reward Distribution: When staked FIL is released or miners receive block rewards, the Repl protocol recovers FIL and repurchases pFIL through auctions, distributing excess earnings as rewards.
· Within the first two weeks of its launch, Parasail’s TVL exceeded $10 million. According to Defillama, Parasail’s TVL has now surpassed $60 million.
On the other hand, integrated products of decentralized storage and decentralized computing for AI training, AI + Data, are also worth attention. At the recent Data+AI Summit, Databricks released many new features and applications combining big data and AI. Founder Ali Ghodsi emphasized the team’s mission at the summit, which is to “democratize DATA + AI,” and highlighted the importance of advancing the integration of AI and Data.
Databricks
· Databricks is a general data analysis platform that integrates data warehousing, data lakes, and ultra-fast big data query engines. The company has recently announced its entry into the AI field, attempting to combine AI with the big data analysis industry by launching data analysis application scenarios based on natural language input. In 2023, Databricks was valued at over $38 billion, with revenues exceeding $1 billion and an annual growth rate of 70%. Therefore, a general data analysis platform based on decentralized storage and decentralized cloud computing holds significant potential.
Kyve
· Kyve is a Web3 project similar to Databricks, providing data aggregation as a service, including data lakes and data pipelines for decentralized general data analysis services. The Kyve network offers quick and simple tools for decentralized data validation, immutability, and retrieval. Uploaders collect data from sources, store it with decentralized providers (such as Arweave), and submit it to data pools for network participants (validators) to verify. Data consumers can access verified data to build decentralized applications without having to trust Kyve or any intermediary.
4. Reflections on DePIN Narratives, Limitations, and Challenges Beyond the Growth Curves
The DePIN track encompasses a wide range of categories, including storage, computing, data collection and sharing, and communication technologies. Each field’s existing market presents varying degrees of competition. During the bull market cycle from 2020 to 2022, decentralized storage and computing tracks were the darlings of the crypto market. Waterdrip Capital, based on this trend, was fortunate to strategically invest early in many projects now classified under DePIN, actively participating in and promoting the development of this field. However, despite DePIN showing tremendous potential, its development faces many limitations and challenges, while also offering opportunities to discover high-quality targets.
DePIN Projects with Hardware Supply Chains and Sales Channels Have Greater Growth Potential
The DePIN concept emphasizes a crypto-economic model based on physical hardware. Projects with strong hardware supply chain capabilities can achieve rapid business growth during the first curve phase through equipment sales and distributor models. While achieving a large-scale network, they can also generate considerable profit income with a cost advantage (the selling price of DePIN devices is relatively high compared to the cost). This provides large-scale hardware infrastructure for the project’s second growth curve and ensures good cash flow to support subsequent user acquisition, operation, and maintenance.
Cross-Chain Interoperability Maximizes Data Value
Currently, most DePIN projects are deployed on Ethereum, Solana, Peaq, and IoTeX. Although there are many mature solutions for cross-chain transactions, achieving data interoperability between multiple chains will maximize the value of data for DePIN projects. This is not only a potential breakthrough point for the DePIN track but will also directly benefit cross-chain protocols from this wave of growth.
Data Trustworthiness is Crucial for AI Development
The data used to train AI may involve risks related to ethics, law, and morality. If data is contaminated or maliciously tampered with by hackers, the AI’s generated results will be affected. The traceability and verification mechanisms of blockchain help improve data trustworthiness, ensuring data integrity and transparency of origin, preventing tampering. Additionally, combining with a crypto-economic model can incentivize the generation of high-quality data from the supply side, further promoting the AI industry’s improvement and large-scale adoption. IBM and other tech companies are already exploring how to use blockchain technology to enhance the trustworthiness and security of AI data.
Disclaimer
The information provided in this report is for reference purposes only and does not constitute any investment advice or decision-making basis. We strive to ensure the accuracy of the information provided, but we do not take responsibility for any direct or indirect losses caused using the content of this report. Before making any investment or decision, it is recommended that you consult a professional advisor or conduct independent research. The views expressed in this report are solely those of the author and do not represent the stance of this institution. All information is based on data available as of the publication date of the report and may be subject to change in the future.
References
· Messari: State of DePIN 2023, https://messari.io/report/state-of-DePIN-2023
· FMG Group: THE FUTURE OF DEPIN, https://docsend.com/view/54umt32m7y3xwv4i
· borderless_cap: DePIN Thesis 2.0, https://borderless.docsend.com/view/5t3tsu3apqewc3ce
· State of AI Report 2023, https://www.stateof.ai/
· BCG Data Value Networks, https://web-assets.bcg.com/77/1c/30afc5e048deba352aaae316a16c/bcg-data-value-networks-cn-mar-2024.pdf
· Charles Handy: The Second Curve: Thoughts on Reinventing Society
· Ryze Labs Comprehensive Report: Full Interpretation of the DePIN Track, https://www.theblockbeats.info/news/46686
· Htx Research, https://htxresearch.medium.com/DePIN-%E8%B5%9B%E9%81%93%E7%8E%B0%E7%8A%B6%E5%8F%8A%E5%8F%91%E5%B1%95%E9%A2%84%E6%B5%8B-fb7ef475087c
· Youbi Capital: Born on the Edge: How Decentralized Computing Networks Empower Crypto and AI? https://mp.weixin.qq.com/s/S6Td3L8ydiI9c7QjupzN8Q
· OORT Docs, https://docs.oortech.com/oort
· Swan Chain, https://s.foresightnews.pro/article/detail/62762
· Swan Chain Docs, https://docs.filswan.com/
· Kyve, https://docs.kyve.network/learn
