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Solana, as the preferred public chain in the DePIN field, has facilitated the rapid emergence of many representative projects such as Helium and HiveMapper through its high-performance infrastructure and rich ecosystem. This has greatly boosted the development of DePIN in various verticals such as computing, networking, and sensors, and has opened up broader prospects for DeFi integration and new incentive models.

Author: Yash Agarwal / Source

Translation: Blockchain in Plain English

Solana is the preferred chain in the DePIN field. The story of its dominance began in 2023 Q2 when projects like Helium migrated from their own L1 to Solana.

Today, Solana has become the home of industry leaders such as Helium, Hivemapper, and Render (think of them as the three FAANG companies in the DePIN field) - Solana DePIN represents over $100 billion in FDV and a $40 billion market cap! (FAANG is an acronym representing the five major US tech giants: Facebook, Apple, Amazon, Netflix, and Google.)

Solana's integrated infrastructure and developer community are now attracting DePIN projects at various stages of their lifecycle. While Solana is a general-purpose chain with a thriving DeFi and NFT ecosystem, its rise as a leader in the DePIN field is indeed remarkable. Many believe that DePIN is one of the most promising bets in the Solana ecosystem, thanks to its massive TAM and Solana's first-mover advantage in the DePIN field.

Messari estimates the total TAM of DePIN to exceed $22 trillion, expected to reach $35 trillion by 2028. This forecast assumes that most physical infrastructure will be incentivized by tokens, which may lead to inflated numbers. Nevertheless, it represents one of the boldest bets in the cryptocurrency space.

In this article, we will briefly explore DePIN, analyze why Solana is chosen as the DePIN chain, briefly discuss various Solana projects, and ultimately summarize why Solana and DePIN are worth paying attention to as a whole. Through this article, you will gain all the necessary insights into Solana DePIN.

1. What is DePIN? Why?

DePIN (Decentralized Physical Infrastructure Networks) consists of token-incentivized networks that use cryptoeconomics to coordinate incentives and encourage individuals to invest their capital or unused resources. From Bitcoin to Solana, we have seen that tokens have proven to be an outstanding mechanism for coordinating large-scale human activities and creating tribalism.

In simple terms, DePIN helps rapidly build efficient real-world infrastructure driven by encrypted local capital.

According to Messari's data, the DePIN ecosystem had grown to over 650 projects by 2023, covering six sub-industries: computing (250), artificial intelligence (200), wireless (100), sensors (50), energy (50), and services (25).

Like any network, the DePIN network has two aspects: supply and demand. Throughout this article, we will delve into both aspects of each project.

2. Supply Side - Token Incentives:

The supply side of DePIN coordinates capital, equipment, and labor for global infrastructure scaling through cryptographic incentives. According to Messari, in 2023, DePIN added 600,000 nodes (supply side) in wireless, computing, and sensor networks. For Helium, this means adding more hotspots, while for Hivemapper, it involves adding more map data.

So far, DePIN has proven to be very efficient in expanding the supply side. However, capital efficiency will determine long-term sustainability, i.e., tokens used to expand the supply. Token economics can be based on various parameters, such as:

Time-based - Helium undergoes halving every two years.

KPI-based - Hivemapper's token economics are based on the percentage of global road mapping, with city-level multipliers and time-based KPI, making its token economics very detailed.

Demand-based - Based on consumer usage of the network.

Clearly, tokens as products are crucial for the operation of any DePIN network. Considering that tokens can only be issued once, managing token issuance becomes crucial. Additionally, token price (and thus speculation) plays a significant role, making the system cyclically dependent.

Recently, non-DePIN projects have started using "points" to drive usage of their protocols instead of directly distributing tokens - this trend may also gain more attention in DePIN (this will be discussed specifically later).

3. Demand Side - B2B vs B2C

While the supply side is incentivized by tokens, speculation plays a crucial role. The demand side is entirely driven by real-world utility and is independent of cycles, bringing income to tokens and thereby adding value.

Since much of the demand is off-chain, such as Web2 companies using Hivemapper maps, the on-chain and off-chain generated income differ. For example, Hivemapper's clients will pay in fiat currency, contributing to off-chain income, while their native token HONEY will be destroyed, contributing to on-chain income.

In addition to demand, on-chain income is significantly influenced by the buyback method (using fiat currency or stablecoins to purchase native tokens). Are these tokens being destroyed or locked? Are buyback decisions based on a percentage of income or "profit"?

Many DePIN projects like Render use the Burn and Mint Equilibrium (BME) model to balance payments and rewards. Here's how it works:

Customers want to pay in dollars, but the network needs to distribute a certain amount of governance tokens regularly. In the BME model, the amount paid by customers in dollars is converted behind the scenes into the network's native token, such as RENDER. At the end of each period (called an epoch), these operators receive RENDER tokens as rewards based on their share of work completed on the network. The RENDER paid by customers and the points accumulated by node operators are then "burned" (removed from circulation). According to a predefined inflation schedule, new RENDER tokens are created and distributed to node operators as their income.

Additionally, demand can be categorized as B2B or B2C. Taking Hivemapper as an example, the demand is B2B, meaning it is utilized by enterprise clients in need of map data. Conversely, for Helium, the demand is B2C, indicating it is used by consumers in need of connectivity.

4. The Secret of Solana in the DePIN Field - Is it Actually OPOS?

DePIN projects prioritize high throughput and low fees. While I may be biased towards Solana as the most efficient blockchain, the reasons why DePIN teams choose Solana include the following:

Performance: Unsurprisingly, Solana stands out with its low transaction costs, high processing speed, and scalability. For example, low fees are crucial for large-scale incentivization of contributors and micro-payments. Additionally, the upcoming launch of Firedancer in late 2024 is expected to enhance the network's speed and resilience.

Network Effects: The transition of Helium from its native blockchain to Solana marks a significant moment for the Solana DePIN community. They have developed many open-source tools that other DePIN projects can leverage. From a business development perspective, the presence of existing DePIN project communities is advantageous.

Unlike DeFi, DePIN projects have not experienced the same level of capital network effects, as most demand is generated off-chain.

Robust Token Standards and Ecosystem: A vibrant ecosystem with well-tested DEX and established standards such as cNFTs (compressed NFTs), pNFTs (programmable NFTs), Token Extensions, etc., provides the fundamental components for DePIN projects to develop and launch their on-chain products.

Solana Mobile: Solana's uniqueness lies in having its own mobile, highlighting its commitment to mobile integration. Solana Mobile 1 already has 20,000 users, and Solana Mobile 2 has over 50,000 pre-orders. This provides a direct distribution channel for DePIN projects to address the challenge of initial user acquisition. For example, Helium offers a month of free service to Solana mobile users, and projects like Grass can launch their applications on Solana Mobile.

Solana Foundation: The Solana Foundation has been a staunch supporter of DePIN, providing dedicated tracks in hackathons, active grants, etc., demonstrating the foundation's commitment to DePIN. Additionally, venture capital firms like Mult1C0in have played a crucial role in bringing DePIN projects to Solana.

Another aspect to consider is the value DePIN brings to the Solana ecosystem:

Users: Projects like Helium have significantly increased the number of active wallets. Helium alone reports over 60,000 active wallets participating in activities such as claiming rewards, staking, delegating, or burning tokens each month, while over 30,000 wallets use other SPL programs, highlighting Helium's impact on the Solana ecosystem.

Legitimacy and Brand Awareness: From a regulatory perspective, DePIN demonstrates practical applications of Solana in the eyes of regulators and policymakers, enhancing its legitimacy and brand awareness.

5. DePIN Projects on Solana

Let's take a look at different DePIN projects in each category on Solana:

1) Wireless Networks

Also known as DeWi (Decentralized Wireless) networks, this approach involves building various types of wireless networks, such as:

Cellular 5G - providing high download speeds and low latency.
WiFi - providing network connectivity in specific areas.
Low Power Wide Area Network (LoRaWAN) - facilitating communication in the Internet of Things (IoT).
Bluetooth - enabling short-range data transmission.

The problem it solves - traditionally, establishing wireless network infrastructure requires significant investment, leading to domination of the field by a few large telecom companies with the necessary scale and financial resources.

DeWi networks provide an alternative by allowing many independent entities or individuals to collaborate in building token-incentivized wireless infrastructure.

A. Helium - Pioneer of DeWi

Arguably one of the first significant and largest DePIN projects, its transition from a native blockchain to Solana marks a revival of the Solana DePIN ecosystem. The network is managed by HNT, Helium's native token, which plays a crucial role in incentivizing network usage as it is burned to obtain "data credits" for data transmission. Hotspot hosts can also convert network tokens (e.g., IoT, Mobile) into HNT.

It provides two main services:

Helium IoT Network: Launched in 2019, Helium hotspots provide wireless connectivity for IoT devices.

Managed by IoT - Helium IoT network tokens are mined through data transmission revenue and coverage proof via LoRaWAN hotspots.

Helium 5G Network: This network combines large operators with crowdsourced 5G hotspots.

Managed by Mobile - Tokens reward individuals for providing 5G wireless coverage and verification in the Helium 5G network.

Supply Side: The crowdsourcing model eliminates site acquisition costs and allows users to contribute to high-bandwidth coverage. For example, operators interested in joining the network and providing cellular coverage can purchase FreedomFi gateway hardware and receive MOBILE tokens as a reward.

With the launch of Helium Mobile offering a $20 per month unlimited data, text, and talk plan, and an increase in sales of Solana Saga smartphones (including a free 30-day Helium Mobile subscription), the number of new hotspots in the Helium network has significantly increased in recent months.

Demand Side: Data consumers pay usage fees using data credits. With more data transmission and consumption of data credits, subnetworks (e.g., IoT network) earn more HNT tokens, rewarding and incentivizing activity.

Overall, HNT is the primary token, while IoT and Mobile are sub-DAO tokens associated with HNT.

B. WiFi Dabba - Helium for Indian WiFi

Similar to Helium but focused on consumer WiFi, especially in India. Despite relatively low mobile data prices in India, there has been a recent trend of increasing mobile data prices, making it challenging for traditional telecom companies to expand WiFi infrastructure in India. WiFi Dabba aims to deploy WiFi in densely populated areas such as residential areas. WiFi Dabba has received support from top-tier venture capital firms Y-Combinator, Mult1C0in, and Borderless, and is set to launch on the Solana platform, providing tokens as incentives for the installation of WiFi hotspots - token economics.

Demand Side: Unlike most decentralized peer-to-peer networks (DePINs), Dabba starts with addressing demand, i.e., customers paying for the service provided.

Supply Side: Dabba empowers local cable TV operators (LCOs) across India. There are approximately 150,000 LCOs nationwide, and they have started piloting and training with the first batch of 5 LCO partners.

C. Storage Networks

Decentralized storage systems operating on a peer-to-peer (P2P) network model allow users to allocate unused resources as storage providers or miners and earn tokens as incentives.

The problem it solves - By encrypting and sharding data, it disperses it across the network to enhance security. Supported by on-chain primitives, the system provides functions such as permanence, encryption, and verifiable storage.

Genesys' ShdwDrive - A Better Filecoin on Solana

As a competitor to Filecoin, Shdw Drive leverages high-performance traditional and mobile computing to reduce the cost of enterprise data center storage - calling this technology "D.A.G.G.E.R." Its native token $SHDW is used to pay for services within the ecosystem, and the roadmap includes more network mechanisms such as staking, halving, penalties, and recovery.

Supply Side: Supported by Shdw operators providing storage.

Demand Side: Projects can utilize Shadow for cloud services, such as:

Web hosting and content management (storing files)

Social media platforms (for immutable historical records)

Archival purposes (preserving valuable records)

Datasets (an on-chain library accessible to everyone)

Personal editable storage space (an alternative to Google Drive).

Synx is a private cloud storage solution supported by mobile and desktop applications, leveraging ShdwDrive.

D. Sensor Networks

Facilitate monitoring and capturing of data related to the environment, mobility, and location:

Environment: e.g., weather conditions.

Mobility: e.g., traffic or vehicle-related data.

Location and maps: e.g., maps of local streets.

The problem it solves - By adopting a bottom-up approach, decentralized sensor networks can reduce the possibility of data manipulation or review, thereby increasing reliability.

E. Hivemapper - The Fastest Growing DePIN for Maps and Development

A global mapping network that collects the latest high-resolution data (4K street-level images) using car-mounted cameras in a permissionless manner. It is managed by HONEYToken. The network's 50,000+ contributors include rideshare drivers, couriers, and enthusiasts, collectively mapping over 125 million kilometers of roads!

Supply Side: Hivemapper's car-mounted cameras are priced between $300 and $650, and contributors are rewarded with HONEYToken for sharing videos and metadata with the network. This model allows contributors to share the value generated by the demand for map data, incentivizing them to expand the network. The result? In 2023 alone, the Hivemapper community mapped over 10% of global roads, while the total token supply used is less than 5%.

Data Validation - Hivemapper's AI-trained community provides an additional layer of validation, earning HONEYToken for accurately categorizing map features and transforming them into valuable information needed by clients.

Demand Side: Companies use HONEY to access map images and data. They can also choose to purchase existing maps or offer bounties for new areas during emergencies, allowing companies to request the latest data as needed. In this process, the demand side consumes HONEY, with the value of consumed HONEY being approximately $250,000.

Examples of Company Use: Insurance (timely access to exterior condition data for home insurance assessment), autonomous vehicle developers (latest road conditions and construction zone information), and Real World Assets (RWA).

Overall, the rapid feedback loop between map contributors rewarded by tokens and map clients is crucial in creating highly useful digital maps.

F. Onocoy - Emerging Location-Based DePIN

GPS satellites are highly effective in many positioning use cases and help determine location, but they lack high accuracy. To enhance accuracy, additional sensors such as Real-Time Kinematic (RTK) use ground receivers to increase GPS accuracy from meters to millimeters.

Supply Side - To establish robust supply and ensure broad coverage, Onocoy plans to incentivize the deployment of these relatively expensive RTK receivers. Currently in beta testing, the project already has over 2,000 participants. New users are encouraged to identify and map areas with insufficient coverage, and the reward structure aims to reduce rewards in areas with overly dense signals (3 overlapping signals).

Demand Side - High-quality location data is crucial for deformation monitoring, agriculture, mining, natural disaster warnings (tsunamis/earthquakes), drone/robot positioning, and autonomous driving applications. Similar to other projects, Onocoy adopts a BME model, allowing clients to pay for services in cash, while network participants are rewarded with $ONOToken based on their contribution proportion.

G. WiHi - Weather and Climate Forecasting

Since 1873, large-scale weather monitoring has been a practice, and the establishment of the World Meteorological Organization provided an opportunity for this. Today, weather data sharing involves a complex network of public and private entities. These organizations operate various sensor networks, develop weather models, and provide forecasts. WiHi aims to be a unified platform connecting all these entities, simplifying data sharing, improving forecast accuracy, and enhancing climate monitoring.

Supply Side - Any entity operating weather sensors can apply to contribute data to WiHi. An interesting prospect is the potential for using Solana Mobile for weather data collection. While the quality of mobile sensors is relatively low, their sheer quantity can compensate for this limitation.

Demand Side - Accurate weather data is of immense value to financial and insurance companies, who derive economic benefits from accurate weather forecasts. Additionally, WiHi is in line with the growing ReFi narrative, aiming to monitor climate changes in real-time.

Another upcoming project on Solana is Srcful, aiming to create a decentralized energy network. It enables homeowners to participate in the energy transition and earn rewards for their contributions.

Solana Mobile may also become an interesting DePIN field in the near future, as mobile phones are powerful sensor devices. There are similar projects on other chains, such as Silencio, allowing the collection of noise pollution data from any smartphone.

2) Computing Networks and Artificial Intelligence

Supported by cryptoeconomics, computing networks enable unique scaling and contraction of computing resources as needed, without concerns about expenses or contractual constraints associated with centralized providers.

The problem it solves - With demand for artificial intelligence reaching historic highs, users seeking computing power find it difficult to obtain machines due to uneven distribution. DePINs act as a marketplace where hardware owners can lend computing power to users seeking to utilize it. Akash, built on Cosmos, is a leader in this category, providing services for general-purpose computing networks for CPU/GPU.

A. Render - GPU's Airbnb

One of the oldest computing networks provides a GPU network for 3D artists to utilize for graphic rendering in games or movies. The network offers a software suite called Octane, allowing 3D artists to outsource their rendering tasks to the GPU network.

Originally an Ethereum project, Render recently shifted to Solana, a move widely seen as a significant improvement by the community. Additionally, Render has expanded its service range to cover artificial intelligence/machine learning and spatial computing, bringing very positive narratives.

B. Io.net - GPU Aggregator

Io.net is building a network to utilize computing power for machine learning applications by integrating GPU networks from data centers, crypto miners, and established projects like Render, positioning itself as a "GPU aggregator." Unlike traditional GPU aggregators that only provide access to individual instances without clustering capabilities, io.net is pioneering the creation of clusters containing thousands of GPUs. These clusters, as a unified instance, are specifically designed to handle machine learning workloads.

Supply Side - As an aggregator, anyone can plug their hardware into the network and start earning money.

Client Side - Anyone looking to create or run ML models or AI applications is a potential client. Unlike competitors, launching an io.net instance takes only a few minutes (demonstrated on Solana Breakpoint 2023).

C. Nosana - GPU Grid

Nosana is a marketplace connecting user-provided GPU networks with consumers aiming to develop AI products.

Supply Side - Individuals with idle consumer GPUs can become nodes in the Nosana network. In the Nosana ecosystem, the token $NOS serves as a means of transaction, allowing consumers to use $NOS to pay for services and provide collateral for node operators.

Demand Side - Developers creating AI applications can utilize Nosana's proprietary AI interface. The interface integrates Stable Diffusion and Llama 2 workloads, providing significant cost savings. According to Nosana's testnet data, developers may reduce expenses by up to 85% compared to traditional cloud infrastructure providers.

Nosana's main grid is expected to be released in the second quarter of 2024, including a comprehensive development toolkit for further experimentation within the Nosana network.

D. Grass - Crowdsourced Data Collection for AI

Grass aims to address the data problem for training AI models. It is a crowdsourcing platform where anyone can earn SNS by completing AI training microtasks.

Supply Side - Contributors can earn by actively choosing a task and providing original data/data labeling/data annotation or passively through Synesis's Kanon NFT series, allowing users to purchase "keywords and earn from the Mind AI client."

Demand Side - Clients like Mind AI.

E. Synesis One - Crowdsourced Data Collection for AI

Synesis One is a data crowdsourcing platform where anyone can earn SNS by completing AI training microtasks.

Demand Side - Clients like Mind AI.

F. UpRock - Bandwidth for AI

UpRock is a mobile-centric platform that creates an automatic earning wallet for its users by providing token rewards for sharing internet access and additional earnings from automatic staking. It has met a growing user base, with 160,000 installations and approximately 10,000 new users per week, processing over 16 million transactions!

Supply Side - UpRock leverages the untapped potential of user bandwidth as AI resources. By contributing unused internet capacity, users can earn tokens, democratizing the creation of data value. This strategy not only incentivizes participation but also supports ecosystem growth by enhancing AI agents and professional models' capabilities.

Demand Side - The demand for the UpRock network comes from companies seeking unique IP addresses to access real-time, uncensored data crucial for AI agents. UpRock goes beyond being just a wallet, evolving into an AI agent that provides conversation support, reveals complex crypto concepts, and facilitates entry into Web3.

G. Hyperdrive Winners - Shaga and DAIN

Shaga - Personal Computer Lending - The winner of the Solana Hyperdrive hackathon is another noteworthy project aiming to solve the issue of cloud gaming. Shaga makes it possible to lend personal computers on a trustless basis at the local level, addressing cost and latency issues.

DAIN Protocol - AI Agents - Another upcoming project (participant in the Hyperdrive hackathon) aims to address the issue of autonomous agents. It builds an ecosystem and platform that allows anyone to build and deploy internet-connected AI agents. These agents can connect to any device and conduct business on the blockchain securely and transparently. Integration with Solana provides identity and reputation, supporting era scoring and reward systems to encourage high performance. Through secure agent-to-agent (A2A) communication, DAIN ensures task completion, including payments and transactions, enabling meaningful interactions.

3) Services

A. Teleport - Tokenized Uber

Teleport, raising $9 million, is similar to Uber but driven by token incentives. Both drivers and passengers are tired of Uber due to the lack of effective coordination between them.

Teleport calculates the minimum density required to launch services in a new city and provides incentives for drivers and passengers to register before launch.

B. Proto

Proto is a user-generated, token-incentivized world map, lowering the barriers to entry and unit costs of map construction. It offers high-quality, regularly updated data from around the world.

Supply Side - Users contribute map data through the app to earn rewards. Currently, the focus is on India, particularly Mumbai and Bangalore.

Demand Side - The Proto SDK enables enterprises to access accurate, real-time map data for various needs, including navigation and digital marketing.

4) DePIN Infrastructure

Tools enabling DePIN on Solana:

Payments:

Sphere: A payment gateway for DePIN projects, providing payment support for top projects like Helium, ionet, etc. For example, Helium uses Sphere to recharge DePIN computing points.

Solsplits: Solsplits is a composable standard for on-chain revenue splitting on Solana, providing pseudo-privacy mechanisms for contributors through contract flow income. It's worth noting that Solana has a rich ecosystem, including over 50 major on/off ramps, which are crucial payment infrastructure facilitating fiat-to-crypto conversions. GetCode could also be a valuable protocol for enabling scalable micro-payments in DePIN projects.

Token Standards: Token standards play a crucial role in the following areas:

a. Compressed NFTs: Solana is one of the few chains capable of mass NFT minting at very low cost (5 SOL or approximately $500) (e.g., 1 million NFTs). When Helium minted NFTs for each of its nearly 1 million hotspots, this became one of its highlights in transitioning to Solana. Additionally, other DePIN networks can use NFTs to represent contributors, as they are an ideal mechanism for demonstrating ownership and distributing rewards on a large scale.

Furthermore, Metaplex has a set of other NFT standards, such as programmable NFTs, which also allow DePIN participants to represent their nodes.

b. SPL Token Standards and Token Extensions: Token Extensions are the next-generation SPL (Solana Program Library) Token standard, with advanced features such as confidential transfers, transfer hooks, transfer fees, non-transferable tokens, interest-bearing tokens, etc.

Oracles and Interoperability: Oracles are crucial sources of off-chain asset data. Solana has two main oracles—Pyth (licensed) and Switchboard (unlicensed)—that can be used to stream off-chain data (e.g., sensor data) to Solana for on-chain computation.

Considering the migration of DePIN projects from other chains, cross-chain message transfer protocols (such as Wormhole) have also played a crucial role in facilitating the migration of RNDRToken.

Additionally, Solana has a vibrant set of tools, such as privacy (Elusiv and Light Protocol), DEXs (native token trading), multisig (Squads), and development tools (Helius).

Opportunities and Trend Predictions for Solana DePIN

More DePIN Areas: In the coming months, we will see more projects emerging in DePIN areas, such as:

1) Clean Energy Infrastructure and Virtual Power Plants: Energy infrastructure is unpredictable due to the intermittent nature of energy sources like wind and solar, and batteries can mitigate this by storing excess energy for future use. As more batteries connect to the public energy grid, their effectiveness will increase. DePIN networks use token incentives to encourage households to deploy their batteries and aggregate them for future use. However, regulatory expenses in the energy sector may slow down and make experiments expensive. Projects like Daylight and Etheos are at the forefront of addressing these challenges—I expect them to integrate/migrate to Solana in 2024!

2) Advanced On-Chain AI: While we are still far from this stage, ideas like verifiable zero-knowledge GPU clouds (currently expensive) are seen, making on-chain inference economics a service that centralized providers cannot offer.

The entire LLM and neural network stack can be placed on decentralized infrastructure. Most of the generative AI movement, similar to cryptocurrencies, is open-source, making it conceptually feasible to deploy and maintain a large number of open-source models on protocols for decentralized computing loads. This approach also creates incentives to provide first-class machine intelligence services.

Using DePIN for AI agents like Olas. PIPIN (Points Incentivized Physical Infrastructure Network): Points are considered the most important innovation of this cycle, so why is DePIN lagging behind? This impact has become evident, with entities like Grass attracting 150,000 users mainly through points in a few months, even before launching a token. The advantage of points is their familiarity with web2 concepts like airline miles, which everyone can understand. For projects, in the early stages, points provide greater control, allowing fine-tuning of mechanisms before the eventual token release. Another related concept is gamification. In addition to token incentives, providing proof of achievement for contributions and creating a pleasant experience is crucial for increasing engagement and contributions. For example, contributors to Hivemapper feel satisfied drawing streets and sometimes engage in this activity as a game (similar to Pokemon Go). Leaderboards can further enhance this gamification aspect. Platformization of DePIN Networks: Major DePIN platforms on Solana are experiencing their platform moment: Helium as a platform has led to the emergence of two sub-DAOs and innovations using Helium's mobile cellular plan and DIMO. Render has attracted clients like Octane video rendering and io.net. While this represents a long-term strategy, I expect all major DePIN projects to evolve into platforms to enable smaller DePIN projects to develop on them.

SVM-based Rollups/L1s for DePIN: While Solana is a highly scalable chain, it is likely that projects will develop specialized forks for DePIN or DePIN projects may create their own versions. This approach will provide greater control, especially in regulatory compliance, while still leveraging existing SVM tools and developers. We have already seen two EVM/substrate chains specifically for DePIN, such as Peaq and IoTex. Additionally, one of the blue-chip DePIN projects, Dimo, is also building their chain using the Polygon CDK, demonstrating the demand for application chains.

However, newer DePIN projects may choose to deploy directly on Solana to save time and resources involved in maintaining L1.

Abstraction and Aggregation: As large DePIN networks address the supply-side issues, the focus will inevitably shift to the demand side. Clearly, most of the demand will come from mainstream users who may find DePIN protocols too complex. This means users may interact with Web2 frontends while being unaware of the fact that DePIN is being used on the backend to handle all aspects of token purchase and destruction. For example, Helium's collaboration with T-Mobile embodies the "aggregation" to enhance network coverage, while Helium Mobile serves as an "abstraction" of the Helium Protocol.

DePIN and Memecoins: Solana has recently become the preferred chain for Memecoins, thanks to its strong community and robust DEXs like Jupiter. While this may seem unusual, Memecoins have made important contributions to the adoption of DePIN:

The airdrop of $BONK, valued at over $600 at its peak, led to the sale of over 20,000 Solana Saga units.

Within the Memecoins community, MOBILE is considered a Memecoin, which also led to a significant price increase.

DePIN and DeFi: DeFi's momentum is stronger than ever, and considering that all DePIN projects have a token, they will start experimenting with more token integrations (e.g., integrating HNT into lending protocols like Marginfi). This will further increase the composability and additional income and speculation for token holders, increasing utility.

Integration of DePIN with RWAs: DePIN networks equipped with assets such as sensors, drones, and wearables will provide real-time, highly reliable data, while RWAs will address their financing needs. The integration can pave the way for a new type of supply chain that integrates physical, financial, and legal elements, all supported by DePIN and RWAs.

An initiative worth noting, Entheos, has made progress in the DePIN x RWA space by enabling investors to fund a decentralized physical infrastructure network (such as smart battery assets). The use of RWAs to provide hardware financing for DePIN is an area worth close attention!

Another interesting application of the composability of RWA x DePIN can be seen in Baxus, which is a tokenized whiskey market that uses Helium devices to monitor whiskey temperature over time. Similarly, real estate projects like Liquidprop and Homebase can compensate Hivemapper contributors for recent property photos around the area.

DePIN as an On-Ramp for Cryptocurrencies: For most DePIN projects, the supply mainly comes from non-crypto individuals and entities earning native crypto tokens on-chain. As Akshay BD puts it, "earning is a powerful niche" and is the best on-ramp for the next wave of users.

7. Summary and Reflection: DePIN will build parallel infrastructure systems

In a world filled with unreliable institutions and ineffective bureaucracies, DePIN directly redistributes wealth and power to individuals and their communities. If you have confidence in crypto-economics, then DePIN should resonate with you as well. Of course, in its current state, DePIN does have a fair share of flaws. However, fields like DePIN and RWA promote bidirectional flow between crypto (synthetic) and real-world (physical) assets.

DePIN represents a bold bet to use crypto-economic incentives to solve real-world problems, and many believe it may even disrupt traditional infrastructure models. However, I believe DePIN will coexist with traditional infrastructure participants, as the latter have significant capital resources, established infrastructure and coverage, and better economic efficiencies. DePIN is likely to create a parallel system that complements rather than completely replaces existing infrastructure, providing last-mile coverage in situations where traditional entities may not be financially viable.

Source: https://yashhsm.medium.com/state-of-solana-depin-2024-055338f513af

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