What is DePIN?
The internet changed how we communicate and access information. Now, Web3 promises another major shift, bringing decentralisation to the forefront. In this new era, control moves from central authorities to distributed networks, empowering users and promoting transparency.
One exciting concept in this Web3 world is Decentralised Physical Infrastructure (DePIN) which is extending blockchain and smart contract technologies to physical infrastructure and services such as energy networks and ride-sharing.
DePINs are projects that use token incentives to encourage people to invest in building infrastructure that is in high demand. They decentralise infrastructure services by running the necessary data flows on blockchain nodes, which generate tokens.
According to Messari, an independent crypto research firm, DePIN's Total Addressable Market will reach $3.2 trillion by 2028. Another perspective suggests that DePIN's potential market size could encompass the entire non-digital economy, which the World Bank estimates to be nearly $90 trillion.
Let’s explore DePIN’s interconnection with web3, cover how this emerging tech can prosper in the web3 environment and check out some of the notable DePIN projects in the space now.
Centralised Control versus Decentralised Ownership
Currently, centralised entities like governments or large corporations control crucial infrastructure such as data centers, communication towers, and power grids. This setup often lacks transparency and excludes users from decision-making. DePIN aims to change this by using blockchain and cryptocurrencies to decentralise ownership.
Here’s how DePIN redefines infrastructure ownership:
- Tokenization of Assets: DePIN tokenizes physical infrastructure assets by creating digital representations on a blockchain. These tokens serve as ownership certificates, allowing individuals to participate in governance.
- Decentralised Governance with DAOs: Token holders join Decentralised Autonomous Organizations (DAOs) where they have voting rights. DAOs use smart contracts to automate decision-making, ensuring transparent and community-driven infrastructure management.
- Incentives for Participation: DePIN encourages collaboration through incentives. Token holders can earn rewards by contributing resources like data storage or computing power to the network. Staking tokens, where tokens are locked for a period, also rewards holders. Efficient resource use boosts token value, benefiting all participants.
The value of tokens issued by DePIN nodes reflects the network's overall worth and popularity. As these networks expand, higher token values incentivise more investment in new nodes. This creates a cycle where increasing token values drive network growth, and vice versa, illustrated in the flywheel diagram below.
Benefits of the DePIN Model:
The DePIN model offers several potential benefits over the traditional centralised approach:
- Increased Transparency: Blockchain technology ensures that all transactions and decision-making processes within a DePIN project are transparent and verifiable. This fosters trust within the community and empowers token holders to hold the DAO accountable.
- Enhanced Efficiency: Decentralised decision-making can lead to more efficient resource allocation and infrastructure utilisation. Additionally, the incentive structure of DePIN motivates individuals to contribute their resources, potentially leading to cost-effective infrastructure management.
- Community-Driven Growth: DePIN empowers communities to take ownership of their infrastructure needs. This fosters a sense of responsibility and incentivizes participation, potentially accelerating the growth and adoption of DePIN solutions.
- Democratised Investment Opportunities: DePIN unlocks new investment opportunities in physical infrastructure. Tokenized assets create avenues for individuals to participate in infrastructure ownership.
How is SubQuery a DePIN Project
We’ve began our journey as a DePIN business long before DePIN became a one of the hottest narratives in web3. We started our journey by first building and deploying a large-scale network foundation for our leading data indexer. Today, we support over 200 networks in the web3 ecosystem.
While developing the SubQuery Network, we built all the necessary components for a decentralised RPC network, including reward mechanisms, service verification, and dispute resolution. This year, we took the natural next step to become a full-fledged DePIN project by actively building our RPC infrastructure.
Our node operators now run RPCs and other nodes, ensuring secure and efficient communication in web3. These decentralised RPCs support the robust and transparent operations essential for DApps while removing the risks associated with centralised middleware , making them a key technological pillar in realising DePIN's vision of decentralised blockchain-powered physical infrastructure.
More Applications of DePIN in Web3
1. Compute networks – Akash
Akash addresses the increasing demand for computing power in the AI age by offering a decentralised network of computing providers. This approach enhances security and reliability for AI algorithms while also creating a marketplace, similar to Airbnb for Datacenters, where unused computing capacity can be leased out for rewards.
SubQuery supports indexing on Akash Network. Read more about this collaboration here.
2. Wireless network – Nodle
The Nodle Network is a decentralised wireless network designed to offer a global, easy-to-use, decentralised communications network for IoT devices.
The Nodle network connects smartphones to create a decentralised, secure, and scalable platform. It supports unique applications like public safety, user-generated content verification, asset location, and remote sensor access.
Recently, Nodle launched the Click camera app, ensuring media provenance and authenticating user-generated content. Anyone with a smartphone can join the Nodle network today.
Nodle has long been a customer of SubQuery. Last year, we’ve also assisted them to decentralise their DApps with the SubQuer Network (previously the SubQuery Kepler Network). Read more about this here.
3. Sensor networks – Hivemapper
Hivemapper aims to revolutionise community mapping by creating a comprehensive global roadmap accessible to all. Its vision includes developing an open world map that supports various innovative projects, such as eco-tourism maps and detailed maps of conflict zones, and even educational uses.
Moreover, Hivemapper benefits sectors like real estate by facilitating property evaluation, land use planning, and compliance with regulations. What sets Hivemapper apart is its engaged community actively contributing to mapping the world's roads and locations, making it a dynamic and evolving resource.
Other DePIN Projects that SubQuery Supports
- IoTeX: IoTeX's W3bstream middleware enables the secure computation and verification of real-world data on the blockchain. It offers builders the flexibility they need for widespread adoption. IoTeX, a leader in DePIN infrastructure, empowers users by rewarding device use and activities, transforming personal devices into community assets, and tokenizing comprehensive data streams.
- U2U Network: U2U Network is a DAG (Direct Acyclic Graph) based and EVM-compatible chain that leverages Subnet technology to provide infinite scalability and is a perfect fit for DePIN.
DePIN - A Potential Game Changer for Web3 and Beyond
DePINs, although still emerging, hold immense potential by fundamentally reshaping how we build, deploy, and interact with digital ecosystems.
They empower individuals and organizations to develop and scale decentralised applications and services with exceptional efficiency, security, and reliability.
As the Web3 landscape evolves, DePIN stands out as a concept with the potential to reshape our interaction with the physical world.
About SubQuery
SubQuery Network is innovating web3 infrastructure with tools that empower builders to decentralise the future. Our fast, flexible, and open data indexer supercharges dApps on over 200 networks, enabling a user-focused web3 world. Soon, our Data Node will provide breakthroughs in the RPC industry, and deliver decentralisation without compromise. We pioneer the web3 revolution for visionaries and forward-thinkers. We’re not just a company — we’re a movement driving an inclusive and decentralised web3 era. Let’s shape the future of web3, together.
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