The New DePIN Track is Taking Off, Explore its Potential Investment Opportunities

2024-01-19, 02:47

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![](https://gimg2.gateimg.com/image/article/1690791857hotspot.jpeg)
## [TL；DR]: 
The popularity of the DePIN track is gradually increasing, and it is expected to lead the market participation enthusiasm after the relay in_script_ion. Gate.io continues to pay attention to the popular projects of the track.

DePIN refers to a decentralized physical infrastructure network, which originated from <a href="/id/price/helium-hnt" target="_blank" class="blog_inner_link">Helium</a> in 2013 and was named by Messari in 2022. Currently, it is mainly divided into two categories: physical resource networks and digital resource networks.

DePIN encourages users to share and utilize idle network software and hardware resources, which is expected to change the evolution of supply chains, industrial patterns, and even the entire economic ecosystem. The development prospects are hindered and long.

## Introduction
In fact, as early as late November last year when in_script_ions were in full swing, the DePIN track had gradually become popular. Recently, Gate.io has also launched DePIN-related tokens such as Oort (OORT), Neurai (XNA), Dynex (DNX), Serenity Shield (SERSH), etc. In this article, we will introduce the development and investment opportunities of this track to readers.
 
## Why is the DePIN Track Important?
DePIN (Decentralized Physical Infrastructure Networks), as a representative of decentralized physical infrastructure networks, encourages users to share personal resources through token incentives and jointly build various infrastructure fields, such as storage space, communication traffic, cloud computing, and energy. This network aims to break the monopoly of centralized institutions and provide users with more flexible, efficient, and reliable services.

The emergence of DePIN is not accidental, but an inevitable result of technological development. With the continuous maturity and popularization of blockchain technology, more and more projects are beginning to realize the importance of decentralized infrastructure. DePIN not only provides users with more convenient and efficient services, but also provides a new stage for developers and entrepreneurs to freely unleash their creativity and talents.
 ![](https://gimg2.gateimg.com/image/article/1705632315img_v3_0278_c9cbc031-8a21-419f-9721-12441628f4ix.jpg)
Source: Gate.io
 
The continuous growth of market value in the DePIN field also proves the recognition and demand of the market. According to CoinGecko's data, the market value of the DePIN field has reached $5.2 billion, surpassing the $5 billion in the oracle field. This number not only demonstrates market confidence but also foreshadows enormous potential for the future.

In addition to market value growth, DePIN has also attracted more and more projects to join. From the earliest <a href="/id/price/arweave-ar" target="_blank" class="blog_inner_link">Arweave</a> and <a href="/id/price/filecoin-fil" target="_blank" class="blog_inner_link">Filecoin</a>, to Helium, which took off in the previous bull market, and to the recently highly anticipated <a href="/id/price/render-rndr" target="_blank" class="blog_inner_link">Render</a> network, these projects are constantly driving the development and growth of the DePIN field.
So, why has DePIN started to receive such widespread attention and pursuit recently?

Firstly, with the increasing improvement of infrastructure, the DePIN track has received more attention and support. This means that developers can more conveniently utilize these resources to build their own applications and services.

Secondly, Messari first proposed the new concept of DePIN at the end of 2022 and regarded it as one of the most important areas for crypto investment in the next decade. This viewpoint has resonated widely in the market and injected more confidence and vitality into the DePIN track.

Of course, people are constantly entering the hype and exploration of breaking through new narratives, while DePIN brings a natural background of high narrative space for hype. After experiencing new narrative trends such as in_script_ions and AI, people began to search for other areas with potential. The DePIN track closely connected to Web2 users has naturally become an important choice for Web3 builders.
 
## The Development History of DePIN Thick Product Leading the Way
In the early days, there was no unified de_script_ion of the emerging field of DePIN, and there were various names such as Internet infrastructure layer, MachineFi, Token Incentive Physical Network, etc.

By November 2022, Messari had voted on the field name and used DePIN in its annual and thematic reports, making DePIN the unified name for the field.

Starting from the earliest projects such as the decentralized network Helium (2013) and the decentralized storage Storj (2014) and Sia (2015), DePIN's projects have mainly focused on storage and communication technology. However, with the continuous development of the Internet, Internet of Things, and AI, the DePIN field is also expanding to cover a wider range of industries. According to Messari's classification, DePIN can be divided into two categories: physical resource networks and digital resource networks.

![](https://gimg2.gateimg.com/image/article/1705632362img_v3_0278_3a489810-2148-4fb6-80d9-2b1877cbabix.jpg)
Source: Messari
 
Physical resource networks include wireless networks, mobile networks, and energy networks, while digital resource networks include storage, bandwidth, and computing networks. Presently, DePIN's projects mainly focus on computing, storage, communication technology, and data collection and sharing. From the top 10 projects in terms of market value, most of them belong to the storage and computing fields, while there are also some excellent projects in the communication technology field, such as industry pioneer Helium and rising star Theta.

These projects fully utilize blockchain technology to provide users with decentralized storage and computing services, thereby breaking the monopoly of traditional centralized institutions. In the future, with the continuous progress of technology and the growing market demand, the DePIN field is expected to usher in broader development space and opportunities.
 
## Long-Term Investment Opportunities for DePIN
From a macro perspective, the emergence of the DePIN project is a revolutionary market change, with its decentralized nature lowering participation barriers and breaking the monopoly of centralized giants. DePIN incentivizes users to share resources and establish a free competitive ecosystem, making the market more open, transparent, and fiercely competitive.

The mechanism of DePIN transforms traditional capital-intensive industries into P2P or P2P models, providing more opportunities for small and medium-sized enterprises and startups to compete equally with industry leaders. In addition, the DePIN project has transformed from a capital-intensive industry to a decentralized model by incentivizing users to provide resources to form a network, breaking price monopolies, and providing users with more cost-effective choices.

Overall, DePIN also fully utilizes idle resources and promotes better social development. Many users hold a large amount of idle resources, including storage, computing power, and energy. Through incentive mechanisms, DePIN encourages users to share and utilize these resources, maximizing resource utilization. This not only reduces resource waste but also brings more sustainable development to enterprises and society.

In recent emerging DePIN projects, the vision and characteristics of O2O projects such as Uber and Meituan, which have been developed into Web3, have gradually emerged. These projects aim to replace web2 infrastructure, allowing users who provide data to directly receive payment from merchants, thereby eliminating intermediaries. This means that DePIN achieves direct value transmission, improves transaction efficiency and transparency by establishing a decentralized ecosystem that directly connects supply and demand sides.

However, the development of DePIN also faces many limitations and challenges.

Firstly, the industry lacked standards in the early stages, resulting in poor developer and user experience. At present, the development of the DePIN industry is still in its early stages, lacking complete infrastructure, and each project needs to be developed independently. In addition, the project has a relatively high understanding and usage threshold for user participation, requiring learning and holding tokens, purchasing and configuring hardware, and other operations. Therefore, the user experience of DePIN projects in the current market is average, and companies need to aggregate and simplify the threshold for user participation and use, improve network availability, in order to have more possibilities to break through.

On the other hand, DePIN also faces the problem of a lack of competitive moat. As resource providers, users may easily switch to other networks, which poses challenges to the long-term stable development of DePIN networks.

In order to address this challenge, some enterprises have begun to devote themselves to infrastructure construction and standardization work. For example, Filecoin announced the launch of Filecoin Data Tools to enhance the developer experience and provide comprehensive solutions for data service needs; IoTex is also developing SDK and other toolkits for move to earn, hoping to reach some standards and consensus at the DePIN level, and promote the healthy development of the industry.
 ![](https://gimg2.gateimg.com/image/article/1705632412img_v3_0278_5e58e58e-0687-4c55-8c66-9127698c21ix.jpg)
Source: IoTex
 
Simply put, blockchain technology is reshaping or is about to reshape multiple industries, such as finance (DeFi), gaming (GameFi), and collectibles (NFT). However, compared to the current market frenzy, DePIN seems to have not received enough attention, but in reality, it has strong potential to seamlessly integrate into the real world, break the monopoly of large enterprises, and drive innovation.

For example, the total market value of the top ten cloud service providers worldwide is approximately $5 trillion. If Web3 company could capture a portion of these markets, its valuation could reach billions of dollars. Currently, the total market value of all DePIN crypto projects is $11 billion.

Although the DePIN field faces many challenges in the short term, such as product experience, fierce competition, high development investment, regulatory compliance, and talent shortages, in the long run, DePIN will have a profound impact on the market. It has changed the evolution of supply chains, industrial patterns, and the entire economic ecosystem by lowering barriers, promoting innovation, and utilizing idle resources. As DePIN matures, we have reason to believe that it will become a key force driving social, business, and individual change.

For investors, the DePIN concept may experience rapid development in the future bull market expectation of <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> halving, attracting a large amount of market attention and creating considerable returns for participants. Gate.io will continue to focus on this field and launch more promising project tokens.

However, regardless of which field or project to invest in, investors should always bear in mind the relevant risks, pay attention to, and fully understand the relevant information in the DePIN field in advance, which is also the key point we have talked about at the end of previous articles.

<div class="blog-details-info">
<div>Author:**Carl Y.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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