Archaeological DePIN, looking for the "legitimacy" of the track
Written by: Wyz Research
In the crypto world, every public chain pursues legitimacy. Legitimacy is the initial driving force of development, or the source of "belief", which can make everything clear and justified. The role of "legitimacy" can be fully exerted in every process, from concept to practice to application.
If we use this method to look for the legitimacy of DePIN, it seems that we cannot find it in Messari's definition of DePIN. The main reason is that the attribute of "physical computing facilities" in the definition is too broad. But fortunately, we can still find common logic in a variety of project types as the legitimacy of DePIN.
In this article, we will try to explore the logical orthodoxy of DePIN and infer the structural development of DePIN. We believe that with the help of "orthodoxy", DePIN will bring some impetus to Crypto that originally did not belong to this field.
DePIN Today
Today's DePIN track is a combination of many old tracks. After Messari proposed the concept, although it was generally defined as a physical computing facility, there were too many projects in this category on the market.
The first thing that can be counted is the storage and computing track, which includes old storage projects such as Filecoin, Storj, and Arweave. Storage projects are special in nature, and most of them can be directly transformed into computing networks, forming a form similar to cloud services, so we can see the emergence of 4everland and Sia. At the same time, there are also a number of old projects with computing networks as their main goal, such as iExec, Phala, Akash, etc. There are also projects that are very sensitive to conceptual transformation, such as THETA, which is directly classified into this track with the concept of game cloud services.
The second thing that can be counted is the Internet of Things projects. Because of their large number and extremely suitable attributes, they have almost become the mainstream of DePIN, such as old projects such as IOTA, Helium, IoTeX, Livepeer, and new projects such as Helium Mobile and Helium IOT.
The last thing that can be counted is the new AI projects and emerging projects with obvious DePIN characteristics.
AI It is one of the most eye-catching tracks in this cycle, and because it requires a lot of computing power, it still needs the support of special computing equipment in the construction of the network layer, so it is included in DePIN.
而无论是存储，还是计算、物联网、AI，几乎都是靠属性被综合到 DePIN 赛道的，那具备明显 DePIN 特点的项目有什么？
These projects emerged in response to market demand, and their attributes almost completely belong to the DePIN track. Prominent examples include W3bstream launched by IoTeX, DePHY invested by IoTeX, Wicrypt and WiFi Map incubated within the ecosystem, or Hivemapper and IoTeX Pebble, which are focused on the application side.
Among these related projects, W3bstream and DePHY belong to the "middle" layer.Xiaobai NavigationCrypt, WiFi Map, Hivemapper, IoTeX Pebble belong to the application layer. The logic behind their emergence is that the infrastructure is sufficient from the chain level and the quantity is sufficient. In terms of the choice of device data on the chain, in addition to building a self-built network, the best option is direct connection. This requires the industry to solve this market demand and provide more B-side users with the fastest way to enter DePIN. This also leads to the emergence of middleware roles based on the industry middle layer to provide solutions, tools, etc.
These new projects are entirely in response to industry needs and are completely DePIN projects.
After searching the information of each project, we can see that among the solutions provided by W3bstream and DePHY, W3bstream focuses on solving the problem of equipment andBlockchainAccess part, DePHY not only solvesBlockchainIn addition to the access part, it also provides hardware solutions. From an analysis perspective, the main reason is probably that IoTeX has already launched standardized hardware products and access to various hardware product data API tools, while hardware manufacturing and combination solutions, which are more upstream services in the supply chain, can be supplemented through investment in DePHY.
Among them, most of the application-side project examples such as Wicrypt, Wifi Map, Hivemapper, and IoTeX Pebble are model copies of mature cases. For example, IoTeX Pebble is a hardware device designed by IoTeX to solve terminal data protection. It can be used in many projects that use terminal devices to collect data. Wicrypt and Wifi Map are based on the successful experience of wireless networks. The largest case before is Helium.
Therefore, compared to the form in which Messari directly attributes the corresponding projects, some changes have taken place in the entire industry. Projects based entirely on the needs of the DePIN industry have emerged, and the industry structure has also changed from "chain + IoT network" to "chain + middleware + application". This is a change in industry demand and also means that DePIN has reached a more critical stage in its development.
In addition, the projects we saw in the early days were almost all aimed at Crypto. For example, Filecoin and Storij only completed the infrastructure part of the communication layer and resource layer, and did not carry out a lot of development and adaptation on the application side. The overall goal of the network was to build acryptocurrencynetwork, andTokenThe economy is the core of operation, and users build mining machines to mine coins.
At present, there are already enough such networks, including storage networks after the rise of AI, distributed cloud computing networks, and distributed AI networks from the network layer to theBlockchainThe layers are almost the same. Because of the high network requirements, such projects will have a design inertia, that is, the joining cost will be designed to be very high.
Therefore, in the face of such a background, many projects have to "establish DePIN projects" and "use traditional smart device projects"Blockchain" has become the main demand, which is also the main demand faced by the industry in its growth stage. Fortunately, the existence of middleware and tool projects is to solve this demand. With the help of these roles, the application layer can unleash business possibilities.
The simplest understanding is that some project parties in the ecosystem need to be prepared to meet the needs of new players entering the track. This is the current DePIN.
Archaeological concepts and main logic
At present, DePIN will improve its development in the trend, and we need to analyze the structural nature of the overall development from a macro perspective.
In the previous article, we basically described all the mainstream project types. Based on Mesarri’s summary of the DePIN track, we can find many project types, including computing, storage, AI, IoT, sensors, wireless, GPU, data, CDN, smart city, geographic location, environment, etc.
All of these tracks meet the definition of physical computing facilities in the DePIN concept. Each business must use hardware equipment in the supply chain. These devices will have computing capabilities. Different hardware device functions and computing capabilities will determine different network functions. Therefore, based on computing capabilities, we can infer the form of the business and the logic after joining the blockchain.
When we continue to trace back along the concept of physical computing facilities, it is the computing network of the Internet. In Wyz Research’s previous article “How to use technical logic to disassemble global projects”, we wrote that the characteristics of public chains are the same as those of current cloud services, and the DePIN model is also similar to the cloud service model.
After the emergence of the Internet, large network nodes, or "servers," have supported the operation of the network. In the early days, servers were all in the form of physical machines. A large number of physical machines formed subsequent computer rooms, computing centers, supercomputing centers, and regional resource pools.
After the cloud service model was popularized by AWS, the concept of cloud became mainstream. Cloud platforms that cooperate with computing centers have continuously added various functions to the platform, so that this method of integrating cloud platform deployment with other tools has become the main form of development operation.
In this development process, we can see the connection process is:
Computing hosts (forming the network) – Cloud platform — Developers
SubstitutingcryptocurrencyAfter the public chain:
Nodes (which make up the network layer) – Blockchain — Developers
Let’s look at the process of connecting IoT devices under traditional technical conditions:
Equipment - Router/Internet - Management Backend/Server
The process after substituting DePIN is:
Computing Devices — Internet — Blockchain — Developers
or:
Computing Devices — Middleware Platforms — Blockchain
Comparing the four processes, the mode of combining DePIN and blockchain is consistent with the logic of cloud service network. The only difference is that due to different functions, two different connection methods and usage methods will be generated. Among them, those that tend to provide infrastructure, such as the old project Filecoin and the new project Render, are connected through special equipment, providing storage and computing power sharing, which is consistent with the cloud service function. In addition, there is also a mode that provides wireless bandwidth sharing at the far end of the infrastructure (the end of the network topology), such as Helium's wireless sharing.
The other is to complete the connection and data communication instead of sharing computing power. For example, the device Peddle designed by IoTeX will become a terminal after connecting to the blockchain, representing a user. Its device no longer shares computing power, but transmits data back to the management end and the chain, releasing other capabilities on the chain. This is another way to access the application layer in addition to infrastructure capabilities.
In the logic of these two products, computing power sharing and data communication are used respectively, and the corresponding businesses are also carried out through shared computing power mining and shared data mining.
But from a technical point of view, although both use blockchain as an accounting tool, the cloud service part records the workload and the data part records the amount of data shared. The data sharing part will also use blockchain as an open export, hoping to introduce data into the public environment to gain more value.
In summary, DePIN can obtain legitimacy from the Internet cloud service and the Internet of Things working mode, and this legitimacy is actually the "legitimacy" of the public chain network in functional applications, that is, sharing resources (computing power, storage, bandwidth, data) in an open environment.
This is the legitimacy of the use of cryptocurrency beyond the "financial legitimacy" of tokens. This is why Messari stated in the report that DePIN's revenue in the future will be driven by practicality rather than just speculation.
Extending the structure of DePIN
What kind of industry structure will be able to meet the industrial needs of DePIN in the future? The answer is: we can solve the device connection problem from cryptocurrency to the outside, and solve the chain and function problems from the Internet of Things to cryptocurrency. Once this problem is solved through the project, the industry structure can still be based on the three-layer structure of the basic layer, the middle layer, and the application layer, and the three major mainstreams of computing power, storage power, and bandwidth sharing, cost-reducing and efficiency-enhancing middleware, and diversified smart device applications.
According to Messari’s report statistics, there are more than 650 DePIN projects, in Coingekco’s category statistics, there are about 79 existing tokens, and in IoTeX’s ecosystem statistics, there are about 65.
It can be said that the existence of various old blockchains in the entire DePIN track represents that the L1 market is almost saturated, but each DePIN project must build its own main network (because it needs to process device communication data and overall status). When there are already many basic chains, they will move to the middle layer and application layer.
This has led to the clear phenomenon we have seen, with an increase in DePIN projects that provide frameworks and solutions, and the industry using such projects as tools for standardized replication.
In the above, we gave examples of the main representatives W3bstream and DePHY. One of the two projects was launched by IoTeX and the other was invested by IoTeX. The goal of both is to reduce costs and quickly replicate standardized DePHY projects.
The entire process that can be completed after combining the two is:
1. Solve the design cost problem of computing equipment;
2. Complete the connection between hardware and blockchain;
3. Solve the problem of on-chain business integration.
For the first question, we take DePHY’s solution as an example.
When a device joins a network, the cost requirements for the device under different objectives are very wide, and the solutions are roughly divided into: data communication / SafetyData communication, bandwidth sharing, storage sharing, and computing power sharing, the costs of several solutions range from hundreds to tens of thousands of dollars.
For example, when only (nonSafetyWhen connecting to a smart switch in an environment, you only need to use the device's common access method to connect and collect data. Without other computing requirements, the cost is the lowest.
When it comes to bandwidth sharing, such as Helium and WifiMap's wireless sharing, specially designed equipment is required, and the cost reaches hundreds of dollars.
In terms of storage sharing and computing power sharing, for example, the cost of Filecoin mining machines has reached tens of thousands of dollars, and if cloud services or GPUs are used for a long time, the ongoing costs may be higher.
High cost means high entry barriers. Therefore, for projects entering DePIN, the greater growth in the future is likely to be concentrated in the second type of data sharing mentioned above. Currently, in order to provide data sharing, most devices require the installation of nodes to ensure dataSafetyThis is the lowest threshold, but it also raises the requirements for the simplest network access equipment.
By consulting DePHY's open source hardware solution, we can find that if we use encrypted communication or communication modules such as TEE, we can transfer data from small devices toSafetyThe simplest access device costs about $10-15.
The second issue is the part that connects to the blockchain.
Currently, projects in the industry are choosing to directly access different blockchain networks, but they also need to deal with device access, data collection, management, and subsequent overall status maintenance. Here, the middle-layer role needs to intervene.
W3bstream and DePHY can both implement this part and provide developers with access management for devices. The principle is based on various modular tools and open source tools, such as DID for device management. In terms of device connection, both use self-built off-chain networks to connect devices. In this part, they will play a "relay" role, connecting the overall status with various public chains to provide support for various businesses.
Although both solutions will show multiple networks, they will themselves have some bias towards public chains. The reason is that the performance of the public chain is also the key to providing the best user experience for DePIN. Therefore, they will tend to use public chains with higher concurrency capabilities, such as Solana.
The third issue, and the final step, is to release the business part on the chain.
In addition to decentralized control, openness is the second biggest advantage of blockchain. DePIN business needs to utilize cryptocurrency business on the chain to realize the release of potential.
We currently see that in addition to the business of cryptocurrencyToken原生业务外，只有数据服务是发展最好的，其中最佳的场景是预言机，为 DeFi 或其他应用提供业务需要的价格数据等，其对数据要求的Safety性很高。
In addition to data transmission, a data market that provides data transactions for machine learning services in AI is also the most likely scenario in the future. Federated learning and deep learning, which we are seeing now, may be closely related to DePIN in the future. Unfortunately, there is still a lack of cases in the current business sector.
Of the above three parts, we can currently determine that the first two parts are complete and can provide standardized process replication for project generation. We have seen many projects born based on this model, such as EnviroBLOQ based on IoTeX's Pebble, Dimo and Drife based on W3bstream, and Starpower and Apus based on DePHY.
Conclusion
Messari has made DePIN a relatively large track by grouping projects together, but there is still a lot to be said about its future size. Most predictions focus on how this industry will absorb the value of the real world to achieve overall market value growth in the industry.
However, based on the current situation, the industry is not growing much, which is the main reason for the low market value. The industry does have a high threshold problem. The cryptocurrency industry may not understand the hardware industry, and the hardware industry cannot quickly enter the use of blockchain and cryptocurrency as tools. However, with the help of the middle-layer role, growth is expected, and with the help of the middle-layer, it is not difficult to enter the market for various applications.
In the future, when DePIN brings the "legitimacy" of real-world businesses into the crypto world, the DePIN project will be able to stand on par with the public chain. This is our greatest expectation for this track.
The article comes from the Internet:Archaeological DePIN, looking for the "legitimacy" of the track
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