Depin (Decentralised Physical Infrastructure Networks) is a decentralized physical infrastructure network that uses blockchain technology to allow participants to deploy hardware devices permissionlessly and trustlessly to provide real-world services or digital resources. At its core, users earn rewards for the services they provide by renting out their hardware. According to Messirai, the current valuation of the entire track is about $9 billion, and it is expected to grow to 3$5 trillion.
DEPIN covers a wide range of areas and can be divided into two categories: physical resources (PRN) and digital resources (DRN) according to Messari's classification. Physical resources include wireless networks, geospatial networks, mobile networks, and energy networks;Digital resources include data storage, computing power, and network bandwidth, and each sub-domain is more sub-categorized.
The basic flywheel logic of the depin track is to stimulate more supply-side participation through the token economy, with sufficient resource supply, there will be ** competition, sufficient resources and good ** will promote demand, and with demand, the token will have value capture, which can better promote *** to attract more resource suppliers.
This article briefly introduces the project of the depin track:
It is a blockchain-based distributed GPU rendering network platform, launched by Otoy in 2017, aiming to connect more creators and idle GPUs, so that idle computing power can provide power for film and animation art rendering. Compared with centralized cloud rendering, Render is an unlimited decentralized network, which solves the problem of supply and demand, breaks the limitation of centralized storage, gathers spare GPUs, and connects creators who need additional GPU computing power to maximize resource utilization.
The business of render network is simply to match computing power and artistic rendering needs. The hashrate role is called the node operator, and this number has remained stable, with 326 render node operators currently providing computing power.
As the demand for rendering grew, and the rndr node runner received 95$80,000, up 82% month-over-month and 898% year-over-year. However, Otoy payments to GPU nodes are often significantly delayed, so spikes may reflect previous months"Catch-up"Payment.
Render Network was originally deployed on the Polygon network, but in March this year, the community passed a proposal and decided to migrate from Polygon to Solana and build a BME (Burn and Mint Equilibrium) model on Solana. The BME model describes a state of relative equilibrium between burned and minted tokens in an ideal process and a specific consumer market, and is already a mature token model that is used in projects such as Helium.
In this model, users use RNDR tokens when purchasing GPU rendering services, the tokens used after the task is completed, and the service provider's rewards are distributed in newly issued tokens, which are based not only on the metrics of job completion, but also on other factors such as customer satisfaction. As a result, the RNDR token has more consumption scenarios in the entire economy, and the supply and demand of the token can be balanced according to the algorithm between burning and minting tokens, and the entire business model has evolved from a simple C2C to a more manageable B2C model.
The specific initial distribution of token releases is as follows:
When it comes to the destination of the network migration, more than half of the users in the community poll chose to migrate to Solana. Since the Render Network has reached the work processing capacity of one million frames per year, and this demand will gradually increase with the development of AI, there are higher requirements for on-chain synchronization efficiency, throughput, network latency, and cost. Solana's TPS (4,000) is about 137 times that of Polygon(29) and costs about 1,5000 of Polygon, making it an ideal choice with a large number of mature developers.
On November 2nd, Render** will announce that Render Network has successfully upgraded its core infrastructure from Ethereum to Solana and launched an incentive program to encourage users to upgrade $RNDR on Ethereum to a new token on Solana $render.
Since the beginning of this year, the $rndr has risen by 800%. Currently, the MC and FDV are at $1 each5b and $22b, ranking 51st in terms of market capitalization. Since the token has a real application scenario, it can be seen that the trend of the token** and the business volume is relatively similar. Render's business resources are strong, and this year's cooperation with Stable Diffusion to carry out AI** rendering has also appeared in Apple's promotional video, which has provided services for HBO, Netflix and other companies, and the rapid development of AI has also greatly increased the project ceiling.
One of the oldest and most well-known Depin projects, Helium is a decentralized wireless networking protocol that incentivizes users to deploy gateways and power global networks based on LoRaWAN technology. Initially, we built our own Layer 1 network, but our adoption was hindered, and we completed the migration to the Solana network in April this year, hoping to take this opportunity to reach a larger user base and liquidity, and take full advantage of the efficiency of the Solana network to complete further expansion.
Helium already has more than 350,000 active IoT nodes, and the long-fi signals generated by Helium gateways can only be used for LoRawan-enabled devices. Currently, the gateways in the Helium network are all full gateways, and will gradually be replaced by light gateways.
Building a global, hardware-supported decentralized wireless network is both ambitious and difficult, and the chart below shows the distribution of active nodes in Helium around the world, mainly in the US and Europe, so the challenge for Helium in the next few years is to drive rapid growth on the demand side.
Helium Mobile, Helium's 5G business, recently announced that it is offering $5 per month of unlimited voice data to local residents in Miami as part of a pilot project that reflects Helium's vision for a future of open 5G networks to provide low-cost and reliable wireless network access to the masses. At the same time, Helium Mobile also announced next-generation 5G hotspots, developer tools, and application-based network coverage recommendations and incentives, which aim to strategically encourage the rapid growth of network coverage in key regions and locations by providing richer access scenarios at a lower cost.
HNT is the main economic asset in the Helium ecosystem, and the only way to pay for network data transfer is to burn $hnt. The current market capitalization is 12$900 million, which was removed from the spot trading pair by Binance in October last year.
This year, Helium issued two new tokens, $Mobile and $IoT, two subdao governance tokens, Helium Mobile and Helium IoT, respectively, with the aim of achieving the separation of governance. Helium Mobile's 5G hotspot business earns $Mobile;And $IOT is used to reward nodes that are focused on running the Internet of Things. $hnt remains the main asset in the Helium ecosystem, as the only token that can pay for network data transfers.
Mobile's role is similar to that of a telecom operator, with a cheap service and the ability to mine with eSIM. The business model is very simple and effective, and does not require complicated physical equipment, which can be very attractive to low-income people to use, and has strong scalability, so as to achieve mass adoption.
Austin Federa, head of strategy at Solana**, recently revealed that all Solana Foundation Labs Eco employees have started using Mobile's eSIM and web services. $mobile launched 2 weeks ago, the current market capitalization is $541m, and there is still a lot of room for development if it goes well.
Livepeer is a decentralized transcoding network designed to provide a decentralized, highly scalable live streaming protocol that dramatically reduces the cost of streaming applications. Founded in 2017, its business has now migrated from Ethereum to Arbitrum.
LivePeer's overall transcoding traffic has remained stable at an average of more than 2 million minutes per week, and in November, LivePeer successfully transferred 11.3 million minutes**. Despite the increasing number of minutes streamed, the open competition on the network has made it 48% less cost-effective for users to use encoding than it was two months ago (November vs September) (4.).$210,000 vs 8$270,000), which is consistent with the Depin flywheel theory, which states that competition between idle computing will reduce costs for users.
In addition to inflationary LPT rewards, node operators can also earn ETH through transcoding efforts on the network. This 30-day payout chart highlights the top 25 nodes, each earning 012 to 184 ETH in rewards.
LPT's current market capitalization is $217M, and there was a wave of rapid rise at the bottom in August, with a 30-fold increase in trading volume in one day, and a doubling within a week, but the overall loss was still a loss compared to the beginning of the year. Full-year revenue from the agreement is estimated at $290,000, with no strong cash flow from the business.
Interestingly, in the last two weeks, whales have completed the opening of positions, buying a total of about 800,000 tokens ($4.) from exchanges8m) after mentioning the wallet.
Arwe**E is a decentralized protocol that implements permanent data storage, using a PoA (Proof of Access) mechanism to reach consensus and generate blocks. Compared to IPFS, the biggest feature is that it is paid once, and it is stored forever. When people spend tokens to store data, a small percentage of the AR paid goes directly to the miner (node) responsible for storing the content, and a large portion is stored in an endowment that is technically able to release the reward slowly and indefinitely. With this mechanism, Arwe**e guarantees unlimited permanent storage.
Solana and Nervos use Arwe**e as the default data storage layer, and also provide data storage services for multiple public chains such as Alanche and Near through its middleware project Kyve. As of November 2023, Arwe**e's monthly trading volume has reached 32.1 billion. Monthly trading volume in November increased by more than 159% year-on-year and about 94 times.
Arwe**e is currently capable of adding about 170 pieces of data per second to the network. While trading volumes continue to grow month-on-month, Arwe**e's fee market remains stable at 0858 AR GiB, proving the scalability of Arwe**e.
Since its inception, Arwe**e has completed a cumulative total of 18400 million transactions, the business has grown rapidly this year, with about 1.2 billion of those transactions taking place this year.
AR is currently basically in full circulation, MC is currently $583M, the business volume is comparable to Filecoin, the market value is 1 4, the business increment is obvious, and the token increase is not much.
IRYS is a storage solution for the AR ecosystem, which processes about 95% of ARWE**E transactions, and is considering forking ARWE**E to no longer maintain the dataset and reset the token**, which may cause the data on AR to not be permanently stored, which may have a greater impact on the price of AR tokens.
HiveMapper is a blockchain-based map network, and contributors can collect data by installing HiveMapper's dashcam and earn tokens $honey as rewards, and the tokens are issued and settled on the Solana network. The dash cam in HiveMapper is similar to a mining machine, which is connected to the application of Hivemapper and uploads Street View images as data.
In just one year of existence, HiveMapper has mapped some 91 million kilometers of roads, covering 10% of the world's total road mileage, of which more than 6 million kilometers are unique. With more than 8,000 dashcams delivered worldwide, drivers are helping to create the freshest maps in the world every day.
HiveMapper's AI training on maps is already in operation, autonomously generating map features from road imagery, with more than 2,000 AI trainers validating the system's output each month. In September, there were an average of 500,000 training results per week, and in November, it grew rapidly to more than 4.2 million per week.
Hivemapper's revenue comes from two parts, the tachograph and the map data API. Each recorder sells for $300 ($649 for the high-end model), which is conservatively estimated to be more than $2 million in revenue alone. The ** of $honey token cannot be too low, otherwise the dash cam will lose demand, the map will not be effectively expanded, and the entire business will be deadlocked. The token has not yet been listed on mainstream exchanges, and is basically traded on ORCA, with a high FDV of $24b, but the circulating supply is only 26%, high FDV and low circulation projects used to be a major feature of SBF tokens, which are very easy to smash.
DEPIN is a perfect track for crypto, which is a combination of decentralized infrastructure and blockchain technology and token economy, which can solve problems such as right confirmation and verification, and the token economy is the source of incentivizing more participants and building network effects.
As mentioned at the beginning, depin can be discussed in two categories: physical resources and digital resources. Physical resource projects, such as Helium and Hivemapper, are currently mainly concentrated in the United States and radiate to Europe, which has relatively strong geographical constraints. Although there are also physical equipment thresholds (such as GPUs, hard disks, etc.) for digital resource projects, the good thing is that they can break through geographical restrictions and provide point-to-point services. With the rapid development of AI and the popularization of large models, ordinary people can also use AI to create, and the demand for computing power will only increase, and the size of the accessible market allocated to Depin will also increase. How to effectively collect demand and expand business cooperation is the growth difficulty of digital resource DEPIN.
The DEPIN track is still in a very early stage, although there is a lot of potential to break the circle, but the threshold for non-Web3 users to access, understand and use is actually relatively high, and there is a lack of complete infrastructure and unified standards, resulting in a general experience of development and use, and the network availability is not strong enough. The moat of each project is not deep, for example, after the 5G track Pollen entered, the miners of Helium also began to deploy the nodes of Pollen, and the competition for the same subdivision track is fierce, and it is very important for the project to easily develop its own moat. At the same time, how to prevent cheating and how to face regulatory restrictions are all obstacles that will be faced on the road to development.
From an investment point of view, DEPIN is a business with upper and lower limits. Unlike most meme projects that do not have practical applications, DEPIN projects have real demand, supply and income, and the quality of the target can be analyzed from these perspectives. Compared with mature centralized services, the DEPIN service** is lower, more flexible in configuration, and more suitable for the needs of small-scale users, from individuals to start-up teams are ideal customers for DEPIN.
The token economy is an important part of DEPIN, and without incentives, participants lose the incentive to become distributed nodes, like BT seeds, where the vision is good but eventually disappears. The token economy complements this well, with Filecoin as an incentive layer for IPFS. At the same time, the physical equipment of some projects is also an important part of the income**, such as the tachograph of the livemapper, if the token is not attractive enough**, or even can not cover the cost, the user will have no incentive to buy hardware equipment, and the physical network cannot be further expanded to form a network effect, and the project will be deadlocked, so the depin track token has a certain lower limit, just like the shutdown of miners**.
This, in turn, would become a condition that binds the ceiling of the Depin project. The DEPIN project is generally settled with project tokens, such as RNDR, LPT, AR, so the burden of cash expenditure will increase for users, and when the advantage is insufficient, it is bound to lose users, resulting in the token *** Therefore, even if the very successful DEPIN project, the token **has **ceiling. More importantly, the DEPIN project is too solid, lacking the imagination of memecoin, and there is no Ponzi mechanism with the left foot stepping on the right foot, so it is difficult to be FOMO, so DEPIN is an investment track with a lower limit and an upper limit, and it is a safer way to find projects with low market value and applications in the early stage.
With the maturity of Ethereum layer 2, high-performance public chains such as Solana, Aptos, and SUI are all good choices for Depin to take root in the future, which is much more cost-effective than building a blockchain by itself in the early stage, and the improvement of blockchain network performance has also laid the foundation for the development of Depin. Recently, a new concept in Solana is called "OPOS (Only Possible on Solana)", which claims that many applications will only be implemented on Solana, and Depin is one of their main tracks. It can be found that many Depin projects have either migrated to Solana or settled with Solana, and Solana's high throughput and low handling fees are very suitable for the needs of Depin projects, and Solana may become a beta for the rise of the Depin track.
Disclaimer: The content shared in this article is for learning and Xi communication only and does not constitute any investment advice. Like our articles, just ***!
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