Decentralization Physical Infrastructure Network ( DePIN )'s Practice and Prospects

Decentralization Physical Infrastructure Network ( DePIN ) is the fusion of blockchain and infrastructure networks. Currently, DePIN is mainly applied in industries such as energy, telecommunications, storage, artificial intelligence, and data collection.

During the last crypto cycle, many projects targeted the huge market opportunity in the DePIN field, but when core products failed to gain enough traction, some projects turned to cryptocurrency token economics. However, some surviving projects achieved sustainable profitability by solving real-world problems, even without relying on the flywheel effect of token economics. Here are a few success stories.

Geodnet

Core issue resolution

Traditional GPS systems often lack the precision required for advanced applications. The Geodnet network's solution improves positioning accuracy by 100 times compared to traditional GPS technology, achieving centimeter-level precision.

Target Customers

The Geodnet network serves industries that rely on high-precision geospatial data, including autonomous vehicles, agriculture, smart cities, national defense and security, and space exploration.

Profit Model

• Data Authorization: Selling geospatial data to commercial clients
• Node participation cost: Costs related to the installation and use of mining machines
• Industry Collaboration: Collaborating with industries such as agriculture and autonomous driving systems to integrate Geodnet network services.

In 2024, the Geodnet network reported a year-on-year revenue growth of over 500%, reaching 1.7 million dollars.

Tokenomics

The Geodnet network incentivizes participants with its native token GEOD:

• Miners earn tokens based on data contributions and network uptime.
• Destruction mechanism: Destroy tokens during the data trading process, introducing a deflationary mechanism.
• Daily average earnings: Each miner's daily average earnings are approximately $4.30, and the expected investment payback period is 3-4 months.
• Token Use: Used for payments, staking, and governance within the network.

Participation Method

1. Become a miner: Purchase mining equipment and connect to the network.
2. Use the network: Access real-time dynamic correction data through subscription or direct purchase.
3. Develop Applications: Software development for specific industries based on data from the Geodnet network.
4. Participate in governance: By staking GEOD tokens and voting on proposals.

Helium

Core issue resolution

Helium addresses the issue of traditional mobile network operators needing huge capital expenditures by creating a decentralized wireless network. This network provides affordable, scalable, and resilient network connectivity for mobile and IoT devices using community-owned hotspots.

Target customers

• Consumers: Unlimited data for $20 per month
• Telecom providers: Implement WiFi offloading for major operators to reduce infrastructure costs
• IoT device manufacturers: Providing connectivity for low-power IoT devices through the LoRaWAN protocol.
• Enterprises and institutions: Deploy dedicated wireless networks for asset tracking, sensors, and environmental monitoring.

Profit Model

1. Direct-to-consumer mobile plan: Unlimited data plan for $20 per month.
2. Operator WiFi diversion fee: Charge telecommunications providers a diversion fee of $0.50 per GB.

Financial Performance

• Subscribers: Over 100,000 direct subscribers and more than 300,000 indirect WiFi diversion users
• Revenue: Generate seven-figure annual revenue from mobile subscriptions and carrier diversion fees.
• Prediction: As operator partnerships expand, the potential annual revenue from WiFi offloading alone could exceed $50 million.

Token Economics

The HNT token of the Helium network is at the core of its incentive and payment structure:

• Earn rewards: Hotspot operators earn HNT by providing coverage and transmitting data.
• Purpose: The token is used for network transactions, payment network services, and governance proposals.
• Burn mechanism: HNT tokens are destroyed when used to pay for network services, reducing supply.

Participation Method

1. Hotspot Deployment: Purchase and set up a compatible hotspot, provide network coverage, and earn HNT rewards.
2. Consumer Plan: Subscribe to a $20 monthly mobile plan
3. Operator Cooperation: Telecom providers can integrate with the Helium network to offload data traffic.
4. Governance and Staking: Stake HNT tokens to participate in network governance, propose suggestions, and vote.

Akash

Core Issues Resolved

The Akash network aims to address the high costs, scalability limitations, and centralization issues of traditional cloud computing providers. It offers a decentralized cloud computing marketplace that allows users to profit from idle machines while reducing costs.

Target customers

• AI developers: Need high-performance GPUs to train and deploy machine learning models
• Startups and enterprises: need economical and scalable cloud computing support

Profit Model

• Market transaction fees: Transaction fees are charged for computing leases and payments.
• Computing resource leasing: revenue sharing from GPU and CPU leasing.
• Developer tools: Charge for API integration and SDK licensing fees
• Business Collaboration: Collaborate with artificial intelligence labs and Decentralization platforms to expand computing power

Financial Performance

• Annual Income: $2.5 million from computing leases and fees in 2024
• Growth rate: The demand for GPU computing resources has increased by 33 times.
• Network Scale: Supports over 400 GPUs

Token Economics

The Akash network uses AKT tokens for payments, governance, and incentives:

• Purpose: Buyers use AKT tokens to purchase computing resources, while providers stake tokens to obtain job opportunities.
• Incentives: Providers earn AKT tokens for supplying computing resources.
• Governance: Token holders can propose upgrades and vote.
• Burn Mechanism: Network fees are burned, reducing token supply

Participation Method

1. As a provider: Set up servers and list resources to earn AKT tokens.
2. As a consumer: leasing computing resources to deploy workloads
3. As a developer: Integrate Akash network services using API and SDK
4. Participate in governance: Staking AKT tokens for network upgrades and policy voting

Future Outlook

The acceptance of DePIN is expected to further increase, giving rise to more sustainable, scalable, and profitable projects. In addition to consumer-facing projects, the infrastructure sector is also worth attention, including underlying blockchains, oracle services, smart contract services, middleware, and token issuance services. Companies in these areas will benefit from the development of DePIN projects, such as Solana, Peaq, Base, Story, Arweave, Opacity Network, and DeForm.