DePIN has become very popular in the blockchain and Web3 fields in recent years, mainly because it combines decentralized technology with the needs of physical infrastructure and has many innovative and promising features. However, DePin's popularity was gradually overshadowed by other projects.
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No.: PandaLY Security Analysis No.108
DePIN has become very popular in the blockchain and Web3 fields in recent years, mainly because it combines decentralized technology with the needs of physical infrastructure and has many innovative and promising features. However, DePin 's popularity was gradually overshadowed by other projects. Recently, the DePin project parties seem to be secretly making efforts again. Many project parties such as io.net and 375.ai are working quietly. It seems that the DePin project is about to return to the blockchain stage.
What is DePin?
DePin, the full name of which is Decentralized physical infrastructure network, is called decentralized physical infrastructure network in Chinese.
What is physical infrastructure? This refers to physical necessities of life such as wireless networks, energy, artificial intelligence, and storage space.
Why decentralize physical infrastructure? Generally, our infrastructure and physical facilities are completed by large companies or governments, which leads to several problems: 1) Single point failure: When a company encounters problems such as server paralysis, the entire service will be paralyzed. Imagine that when you are trying to grab concert tickets on Damai or Maoyan, the server will crash at any time? This leads to a very poor user experience. Decentralizing the infrastructure can solve this problem. The "miner's" computer is used as a server. Different computers respond to requests for corresponding workloads. If one computer crashes, there is another one. As long as there are enough nodes, the requests distributed to each machine will be small enough, and the problem of "crashing at any time" will not occur.
2) Operating costs: For large companies, the cost of building infrastructure is paid by themselves, and profits are made by government allocations. With the DePin model, customers pay for products (similar to mining machines), and large companies share profits with customers. Customers help take care of the "mining machines" and use them to provide data or process data for the company. In this way, the company can make profits on both ends and reduce initial operating costs. Customers become small shareholders and can also make profits.
3) Computing power, storage, and bandwidth resource sharing: Grass is a typical example. It uses a set of software for bandwidth sharing, sharing your idle bandwidth with them, and they then sell it to other laboratories, institutions, or companies. Finally, they will issue tokens to participants who shared the idle bandwidth.
What are the DePin projects?
The DePin project is mainly divided into storage type, computing type, sensor type, and wireless network type.
Storage Type:
The storage track is the oldest DePin track. This concept existed when blockchain was first introduced. At first, several industry insiders proposed that the blockchain's immutability, accessibility, and storage properties could be used to create an intellectual property protection chain. Encrypt the knowledge you discovered to get a SHA256 hash and upload it to the chain. When you want to verify it later, you can take out the article again and verify the hash. There are several storage projects currently available: DeStor : Provides decentralized storage, and the platform's token is called Filecoin. The project has released a blockchain for storage. When you need to store any file, you can contact the official and ask them to help you upload the file to the blockchain. Arweave: Permanent storage after a single payment, with an independent blockchain and moderate storage fees.
Calculation Type:
Computing is a relatively new track, and the idea of this track is to aggregate and distribute idle computing resources to users in need. It is mainly used for tasks that require a lot of computing power, such as artificial intelligence, video animation rendering, video transcoding, etc. Since the DePIN architecture can allocate computing resources well, the cost is greatly reduced compared to traditional computing by renting servers. There are several good projects currently being done:- io.net: io.net is a decentralized GPU network. Since the computing power provided by current cloud providers is not enough to support GPU computing of large AI models, it has led to a serious shortage of cloud computing GPU resources.
Io.net proposes a vision to solve this problem by accessing underutilized GPU sources outside the cloud, such as:- Independent data centers: There are thousands of independent data centers in the United States alone, and their average utilization rate is only 12%-18%.
- Cryptocurrency miners: Miners suffered significant losses after Ethereum switched to Proof of Stake. They can repurpose GPUs in our DePin network.
- Consumer GPUs: Consumer GPUs make up 90% of the total supply, but most of these resources are hidden in consumer homes and small cloud farms .
It is estimated that these sources combined can provide an additional 200 exaFLOPs of GPU capacity. By proving their workload, miners can get rewards in the form of IO tokens. In this way, people with idle GPUs can benefit, companies can make a profit, and people who rent can also meet their needs at an affordable price. 
BitTensor:
This is a very interesting project. The project proposes a concept: the computing power of the Bitcoin network (measured by the original hash value) has surpassed the potential of any company or government. If this computing power can be used for AI training instead of meaningless hash calculations, it will bring changes to the computing power system of the entire world. What this project wants to do is to provide users with different AI models according to their needs, and ultimately help users meet their needs. However, since the vision is too huge, it is unknown whether it can be achieved.
Sensor Type:
There are many different types of sensor-type projects, such as collecting map images, reading car-related data, reading weather data, etc. Nubila: This is a very interesting weather project. The company was originally a climate monitoring IOT company, but later changed its operating model to sell products to individual users. Individual users put climate monitoring sensors on roofs or balconies. After collecting data, the company will reward individual users with tokens. The company also sells the collected data to national weather bureaus, etc.
375.ai: This project focuses on diverse information collection, from environmental perception to traffic analysis, covering most data types. It provides data for urban planning, navigation, mapping, logistics, environmental testing and other industries. It collects data through the user's mobile phone app, collects data such as the route map of the user, and finally sells this data to various industries.
Network Type:
There are many types of networks, Xiaocao is a typical example, which obtains tokens by sharing extra bandwidth with other companies. After Xiaocao's success, many similar bandwidth-sharing projects have emerged, such as DAWN.
We have discussed this type of project before on the official account, so I will not go into details here.
What are the risks of the DePin project?
There are two main types of risks in the DePin project: data outflow and centralization. In fact, you can see that the sensor-type Depin project is developing relatively well at present. Users can make money while reducing the cost of data and the cost of maintaining equipment for companies.
But the biggest problem with this type of project is "data outbound". Data outbound involves legal supervision, just like China's weather data cannot be shared with the United States, and the same is true for the United States. Therefore, when a Depin project needs to be developed in a certain country, the most important thing to pay attention to is the local laws and regulations. Only when local laws and regulations can support data collection and other methods can this project develop.
The DePin project is actually quite centralized. First of all, the tokens are in the hands of the project party, who enjoys the right to distribute the tokens, while users can only wait and see. If the project party airdrops more tokens, users can make money. If the project party is stingy or does not distribute tokens as agreed, users may not even be able to get their money back for buying equipment. Therefore, when participating in a project, you must evaluate the size of the project party, financing, personnel background, etc.
Find quality projects
Finally, how to safely participate in the DePin project. When we participate in the DePin project, we mainly need to consider the following points: This is the most important point. If the project you are involved in is not compliant and involves legal risks such as data outflow, then you are likely to be charged with "leaking state secrets". It is not worth it to bear this name just to make a few bucks. The way the project motivates you is also very important. Some project owners write vague terms that do not specify when the tokens will be issued or when the tokens will be recycled. Therefore, when we participate in a project, we must clearly understand the time and method of the project owner's token issuance and the token recycling mechanism. And one last thing, beware of phishing traps and private key leaks . Remember, anyone who asks you to fill in your private key is definitely a scam. Conclusion
As technology evolves and the market matures, DePIN will gradually demonstrate its great potential in computing resources, infrastructure, network collaboration, etc. Decentralization can not only optimize efficiency and costs, but also promote the entire society to develop in a more open, flexible and sustainable direction. The future of DePIN is not only a story of technological innovation, but also a grand vision of global collaboration and sharing economy.
