3. DePIN niches and related projects
You’ll learn:
- What differentiates major DePIN sectors and which real-world challenges they tackle.
- How tokenized incentive models power these networks by rewarding users for lending hardware, bandwidth, mobility data, and more.
- Why DePIN is more than a passing trend offering an alternative, modular framework for infrastructure innovation, spanning energy, VPNs, video streaming, real estate, and even Bitcoin mining.
- How emerging platforms like IoTeX and Lisk provide foundational infrastructure for the next generation of DePIN applications.
Before we get down to business, we want to make sure you’re on the same page as us. Below you’ll find a short overview with description – a kind of glossary – of the projects and DePIN niches we’ll unpack in the main section of our report. Feel free to skip if you are familiar with these projects.
Decentralized computing
Encouraging individuals to share their unused computing power and allocate these resources to a decentralized cloud network – in exchange for tokens.
Significant projects:
- Akash – a decentralized computing marketplace that aims to seamlessly connect GPU power lenders with companies and individuals in need.
- Render – a decentralized GPU network similar to Akash but primarily focused on artists and studios that need rendering power.
- Livepeer – a decentralized video infrastructure focused on making unused computing resources from the supply side of the market available primarily to filmmakers and live streamers on the other end.
Decentralized storage
Leveraging a distributed network of nodes to store data rather than relying on a centralized server or service provider. The files are often encrypted, broken into smaller segments, and spread across multiple independent computers, making the data resilient to outages.
Significant projects:
- Filecoin – a decentralized marketplace for data storage, connecting users with providers in a peer-to-peer network. It uses economic incentives and robust cryptography to guarantee file reliability and security.
- Arweave – a decentralized storage protocol designed to ensure the permanent and immutable preservation of data. It accomplishes this through a novel payment structure where users provide a one-time, upfront endowment to store data indefinitely.
Decentralized wireless networks
DePINs utilize blockchain technology and token incentives to create and maintain wireless communication networks in a decentralized manner. These networks encourage individuals to contribute hardware, such as hotspots, routers, and other wireless devices, to establish connectivity services like WiFi hotspots and other wireless communication services.
Significant projects:
- Helium – a decentralized telecommunications network that uses LoRaWAN technology to connect IoT devices to the internet. Also known as The People’s Network, Helium has reached a tremendous milestone of over 150,000 hotspots deployed globally in just over two years.
- Pollen Mobile – a decentralized, user-owned, and operated mobile network that utilizes blockchain technology and token incentives to create a privacy-focused, affordable wireless communication ecosystem.
Decentralized sensor networks
Thanks to DePIN, users can also receive rewards for simply providing valuable data. Projects building decentralized sensor networks collect information from individual users and resell it to third parties or institutions. They can also convert it into actionable insights and recommendations.
Significant projects:
- Hivemapper – a project incentivizing individuals to generate and share map data from vehicles using plug-and-play sensors. It functions as a decentralized and community-owned Google Maps.
- DIMO – a similar project to Hivemapper, focused more on data specifically related to vehicles. It rewards user contributions with both token incentives and additional features such as private location tracking, vehicle health diagnostics, virtual glovebox, and privacy-protected GPS.
- Sweatcoin – a move-to-earn concept, representative of incentivizing individuals to improve their physical activity. This example is particularly interesting because it started as a Web2 app and moved into Web3 after testing its model on over 100M users.
Geodnet – a decentralized network utilizing real-time kinematic data. It incentivizes users to share their individual location data, which significantly helps to improve positioning accuracy compared to standalone GPS devices.
Sponsored by ICP
A note from ICP (The Internet Computer) who contributed to this report:
ICP is one of the leading DePIN networks, hosted by special node machines dedicated to creating a sovereign network, governed by an advanced DAO. Canister smart contracts can rent out computing power and storage on the network.
Possible use cases:
- You create a DePIN network of physical sensors that monitor soil moisture. The signed output of these sensors could be verified directly and easily on the Internet Computer to ensure it hasn’t been tampered with. Such evidence could also be shared via ICP’s Chain Fusion technology to other chains such as Bitcoin or Ethereum, or even to traditional Web2 systems through ICP’s ability to make HTTP outcalls.
- ICP smart contracts come with bundled storage, making it possible to tag additional relevant data, such as pictures or videos alongside the data from the DePIN infrastructure. For example, a decentralized solar panel network with additional data, such as weather patterns, camera-captured timelapse videos, etc. via additional input sources can be tagged and mapped directly on the blockchain.
What entrepreneurs need to know:
ICP offers a pay per use model for
- Computation
- Storage
- Communication Cost
- All other capabilities (i.e. threshold signatures, reading from and writing to the Bitcoin blockchain, calling smart contracts on EVM chains, etc.)
Potential Revenue Streams
- Standard Web3 model where payment by users is a natural feature of the platform
- Flexibility to use a traditional Web2-like revenue model using Reverse Gas Model
- Infrastructure Component: Since canisters are composable services, those providing functionality (backend service) to other canisters/dApps can charge them for it
Potential Business Models
- AI: monetize data for training, monetize trained models
- Use ICP’s capabilities (integration with Web2 and other chains, computation, and storage) to provide services to dApps on other blockchain platforms (automation, governance, oracles,etc.)
- Build DePIN networks on top of ICP, for example, using HTTP outcalls to have smart contracts interact with outside infrastructure – reference Loka Mining.
Examples of DePIN dApps:
- Loka Mining: Loka is a platform that enables retail investors to acquire BTC at a lower-than-market price by providing liquidity to Bitcoin miners without any exposure to centralized party risk. It uses a trustless non-custodial escrow and a fully decentralized mining pool.
Other decentralized networks
DePIN is obviously not limited to these four use cases. As the industry grows, there are more and more examples that expand the initial DePIN categorization.
Significant examples:
- Theta (content delivery) – a decentralized video delivery network aimed at enhancing the quality of video streaming by leveraging a peer-to-peer network of nodes to deliver content efficiently. The Theta Network incentivizes users to share bandwidth by rewarding them with tokens.
- IoTeX (general DePIN infrastructure) – a project that provides a comprehensive blockchain-based infrastructure designed to empower the development and operation of DePINs. It specializes in building the technological backbone for interconnecting and managing physical assets with blockchain-powered networks.
- Lisk (general L2 DePIN infrastructure) – an L2 infrastructure that allows seamless movement of tokenized real-world assets (RWAs) into Ethereum’s DeFi ecosystem.
- Power Ledger (energy trading) – a blockchain network focused on decentralized energy trading to accelerate clean energy adoption. It enables individuals to transfer surplus energy from sustainable sources and receive additional revenue in exchange. One could call it an Airbnb for green energy.
- Orchid (decentralized VPN) – a network of VPN providers where users can establish custom multi-hop connections and pay with cryptocurrency. It acts as a marketplace for individuals to sell their own servers as VPN nodes – a unique approach to this type of service compared to non-Web3 offerings.