What surprises will Depin bring in the Bull Market?

Original Author: Coin98 Insights

Original title: What will be the performance of this Bull Market Depin?

Compiled by Luke, Mars Finance

DEP is attracting capital inflows

Since the end of 2022, DEPIN (Decentralized Physical Infrastructure Network, Decentralization physical infrastructure network) has been gradually accepted by the community. DEPIN uses blockchain technology as an intermediary to connect resource suppliers with customers in the infrastructure. This field is developing rapidly.

Many investment funds choose to invest in the DEP project, among the most prominent are FIL and Helium, which have successfully raised hundreds of millions of dollars.

DePIN gains follow with the following advantages:

Easy to participate: Users can easily join.

Decentralization: not controlled by third parties, reducing costs for service providers and customers.

Optimize revenue: maximize revenue through project incentive mechanism (incentives).

It is precisely because of this that people have high hopes for the inflow of funds attracted by DEP and its potential competition with traditional markets in the future.

However, is DePIN powerful enough to achieve these goals?

Next, we will explore the current landscape of DePIN and whether it can truly bring a breakthrough, or is it just "adding feet to the snake".

DEP Current Development Direction

The basic model of the DEP project is similar to other projects in the crypto market, covering both product and economic aspects.

Product Level

Many of the needs of modern society have been met by traditional enterprises or intermediary applications (such as Grab, Amazon, Uber, etc.). Therefore, to achieve a breakthrough project like DEP, it is very difficult to address the new needs of a large number of users.

Economic aspect

In the past, almost all DEP projects imitated the traditional product model and attracted users through economic incentives. The use of tokens as incentives did attract a large number of users in the short term. However, this model is often unsustainable: when the user's income is lower than the input cost, the indicators of the project will drop significantly.

For example, in the early stages of the Helium project, users were allowed to recoup their investment in a short period of time by installing equipment, attracting a large number of users. However, as the number of participants increased and project revenue could not keep up, later users needed to wait for thousands of days to recoup their costs.

Currently, there are emerging DePIN projects with innovative models, including:

1. Focus on new market demands

With the rapid development of fields such as Crypto Assets and artificial intelligence, new demands continue to emerge. These fields have less competition, providing an opportunity for the DEP project.

For example:

Projects like Io.net and Render Network provide a marketplace for entities with idle GPU and CPU resources, such as servers and data centers, to be rented by demand-side users. With the rapid development of industries such as AI, blockchain, and graphics processing, there is a great demand for computing resources. These projects are expected to attract a significant amount of value.

Currently, the resources provided by Io.net platform include:

200,953 GPUs and 53,607 CPUs are being rented;

934,975 GPUs and 118,200 CPUs waiting for verification.

The GPU rental price ranges from $0.1 to $1 per hour, far lower than traditional service providers such as Amazon.

For Render Network:

Currently 34,458,085 rendering frames have been completed;

Active Nodes reach 5,600. Render Network requires service providers to be certified through Allowlist before participating.

Despite the lower prices, the competitive advantage of projects such as Io.net and Render Network is not only about the price. These platforms form competitiveness by integrating longer resources, but due to the lack of stability, large clients (such as those requiring long-term high computing power support) still tend to prefer traditional solutions that have undergone standardized processes.

Currently, the success of Io.net and Render Network largely depends on the Token incentive mechanism. Whether it can attract users through the product itself still needs time to verify.

2. Building a more sustainable economic model

A more sustainable economic model helps projects better control risks, avoid overcapacity, and effectively create new demand to attract capital inflows.

In terms of economic design, multiple projects have already tried different strategies, each with its own advantages and disadvantages.

DEP Project Classification and Ecosystem Selection

The two key factors of the DePIN project are Token and the network ecosystem. Choosing the right blockchain ecosystem is crucial for optimizing the user experience.

Current mainstream ecosystem

Initially, most DEP projects were built on the Ethereum blockchain, as the Ethereum ecosystem, supporting smart contracts, attracted the most value. However, over time, Solana has become a new popular choice for DEP projects due to its fast speed and low cost. For example, Helium has migrated from other blockchains to Solana. In addition, new emerging DEP projects are also appearing in other ecosystems.

Currently, many DEP projects are running on multiple ecosystems simultaneously, for reasons including:

The project integrates its products across multiple networks (such as The Graph).

Some projects combine traditional products with tokenization, and these tokens are issued on different networks.

The main application areas of DePIN

DePIN is a wide field covering various application scenarios. The current popular fields include:

Compute: Provide the Computing Power market for customers with demand.

Mobility: For example, Hivemapper records videos through car mobility to provide data for creating 3D street view maps.

Storage: Provide storage environment for customers in need.

In addition, DePIN is also applied in the fields of environment, energy, internet of things (IoT), etc.

Due to the diversity of application scenarios, it is difficult to evaluate the overall effect of the DePIN project with a unified standard. Even in the same field (such as computing), there may be different sub-directions. For example, Io.net provides a general-purpose GPU, while Render Network focuses on graphics processing.

Expectations for the future of DEP

With the rapid development of the technology field, more innovative DEP projects may emerge in the future to meet new demands. For example:

Meet the needs in the AI field;

Meet Block chain computing needs;

Connect global intellectual resources, break geographical and process limitations of traditional markets. For example, Certik once proposed a security service market concept, allowing freelance security experts to earn income by auditing projects.

Although these DEP projects may not be as perfect as traditional giants, their ease of use and Token incentives may attract specific user groups.

In the future, with the diversified development of the DEP project, this field will usher in more innovations. These projects can not only attract encryption users but also attract non-encryption users to participate.

Summary

The current DEP is no longer just an old project that only adds Token elements, but a truly groundbreaking solution that meets new needs. With the emergence of more innovative models, DEP will present diversified development in the future. This not only injects fresh blood into the encryption market but also brings new challenges to investors.