1. Background.
1) DEPIN: Establish new infrastructure on and off the chain.
DEPIN (Decentralized Physical Infrastructure Network) is a product of blockchain technology extending into the physical world. It uses a token incentive mechanism to encourage users to share personal resources and establish public infrastructure such as storage, networking, and computing. Industry giants Filecoin and Helium are typical examples of Depin.
Currently, the overall market size of DEPIN is approximately $5.8 billion (data**: Messari Research Report). However, it is expected that by 2025, the DEPIN market capacity will reach US$162.7 billion (same as above), with a compound annual growth rate of 12345%。
2) Web3 games: the liberation of player power.
At the same time, web3 games, rooted in blockchain and crypto economy, are also booming. The Play to Earn mode, represented by Axie Infinity, maximizes the benefits of players. More creative sandbox games like The Sandbox also put the power of content creation back in the hands of players.
But we also see that the current penetration rate of Web3 games among global game users is still very limited, below 5% (Newzoo statistics, Q4 2023 report). In the first period to truly promote web3 games into the mainstream, a more complete basic environment needs to be established.
2. Analysis of problems and opportunities.
a) The main challenges faced by Web3 games.
Despite the huge market prospects, there are many barriers to Web3 games entering the mainstream. The main pain points at this stage are:
1. Infrastructure costs are too high: Complex on-chain games and the metaverse require a lot of computing power. But relying on centralized cloud services like AWS, the cost of computing and storage can be as high as thousands of dollars per hour, which is unaffordable in long-term large-scale commercial operations.
2. The business model is not perfect: Many games rely on one-time ICO financing to unsustain themselves, and cannot form a sustainable business closed loop through endogenous means. So far in 2021, less than 5% of Web3 games have been profitable (quoted from the Cryptoslam Data Platform 2023 report).
3. Limited user experience: Most Web3 games are limited to simple linkage and cannot provide an immersive large-world experience. This makes it difficult to meet the increasing demand expectations of users, and also limits the expansion of game scenarios and genres.
2) DEPIN can efficiently solve the above pain points of Web3 games.
The technical model of DEPIN has been elaborated in the previous article. To summarize briefly, its main advantages are:
1. It can reduce the cost of infrastructure construction and use on a large scale.
2. Form a continuously operating tokenized infrastructure business model.
3. Support the seamless connection and sharing of complex virtual and real scenes.
Obviously, these fit right into the current weaknesses of web3 games. If DEPIN has such complete technical and commercial support, it will be easier for Web3 games to achieve large-scale commercialization and continuous innovation.
3. Detailed explanation of the solution.
Based on the above analysis, we can envision a Web3 game business solution based on DEPIN, which includes:
1) Overall network and platform architecture.
1. Underlying depin: Algorithmic incentives are used to build service-oriented infrastructure such as storage, bandwidth, and computing. By default, the platform presets the computing power market that supports encrypted computing power.
2. Middle-level framework services: provide functional modules such as off-chain data mapping, on-chain token payment, and analysis services to lower the threshold for game development.
3. Upper-layer web3 games: provide content, asset interaction, and community governance for players. The platform connects to different types of DApps through SDK open interfaces.
The overall network is completely decentralized and open, and the underlying layer of the public chain ensures data transparency and decentralization to individuals.
2) Economic incentive model.
The infrastructure and services built by the network are driven by the DEPIN public chain token, which realizes the interests and behavioral incentives of all participants.
1. Underlying contributors (such as computing power, storage and other resource providers) obtain infrastructure tokens, which effectively improves the efficiency of facilities and reduces upper-layer costs.
2. Middle-level service development teams and infrastructure operators will receive circulating tokens according to the proportion of services, and the ecology will be continuously improved.
3. The game and content development team uses infrastructure and services to support the operation of the upper-layer dapp and obtain a share of user spend.
4. End users can trade content and assets through game DApp tokens, and have the right to participate in community governance and obtain decision-making rights and corresponding economic returns.
This creates a positive incentive cycle across the network and promotes sustainable ecological prosperity.
c) About the selection of the main network.
The performance of the underlying layer of the public chain directly restricts the ceiling and experience ceiling of the entire solution. For this reason, combined with the consensus mechanism of DEPIN and the consideration of business scenarios, the most suitable mainnet choice is Solana.
Compared to Ethereum, Solana has a clear advantage:
1 Industry's top deterministic speed, a single shard exceeds 6 per second50,000 transactions;
2 Average transaction costs as low as 0$00,025, which can withstand large-scale commercial operations.
These characteristics can effectively promote the large-scale expansion and upgrading of users of DEPIN+ web3 game solutions. Compared with other competing chains, it is also easier to win the favor of developers and aggregate ecological resources.
Fourth, market capacity**.
1) The DEPIN network market is expected to reach $162.7 billion in 2025.
According to a Messari research report, the total market value of Depin cyberspace will reach $162.7 billion by 2025, most of which will come from the construction of infrastructure such as computing services and data storage. Compared with $5.8 billion in 2022, the market capacity has increased nearly 30 times in five years.
2) The game market is expected to exceed $310 billion in the same period.
The overall gaming industry is strong, with the global gaming market expected to exceed $310 billion by 2025, according to Forbes. Mobile games and pan-entertainment content are the main growth drivers, which are expected to account for more than 60%.
3) Based on the above data, the market size of Depin-enabled Web3 game solutions will reach $100 billion in 2025.
As Web3 games are still in the early stage of market construction, considering the constraints of the number of blockchain users and consumer acceptance, the market capacity of Web3 game solutions supported by Depin is expected to reach $100 billion in 2025 through integrated analysis and evaluation.
Compared with the current total scale of the subdivision track of less than 5 billion US dollars, the next five years will usher in a 100-fold rapid growth.
5. How DEPIN can effectively empower iGames
Hotspot Engine Project Although igames, as an emerging blockchain game platform, has an advanced technical perspective and a decentralized concept, it still faces key challenges in its commercialization practice, such as high infrastructure costs, limited sustainability of business models, and homogeneous user experience. These bottlenecks have constrained igames from further expanding rapidly through its own model effects.
And these are the unique advantages of the DEPIN model. Depin's shared infrastructure, built through algorithmic incentives, has a much lower storage and compute unit cost than AWS cloud services. Through the endogenous token economy, positive incentives and self-growth have been realized. At the same time, its heterogeneous network convergence capability can support pan-entertainment applications to create a more immersive user experience.
Based on this, Depin can effectively solve the pain points of iGames and become a unique growth engine
1) Co-build game infrastructure to significantly reduce operating costs.
The two can work together to attract node computing providers and storage resource providers to join the igames ecosystem through the depin model and token incentives, and form a stable and efficient infrastructure pool through automatic scheduling algorithms. Compared with self-built infrastructure, the cost is reduced by at least 60%.
2) Data and algorithm market to achieve a closed business loop.
iGames could consider using the DEPIN model to incentivize anonymized user data generated by open platforms and games with tokens. Game developers and AI algorithm providers can exchange data tokens in the data market. Complete the formation of a closed business loop.
3) Support the creation of immersive game scenes and mechanics.
Relying on Depin's mature heterogeneous network support capabilities, iGames can open up more dimensional resources on and off the chain, connect the Internet of Things, location services, physical environments, etc., and provide immersive scene experience and playability for games. These are its core competencies.