# DePIN Shakes Up Traditional Infrastructure Models
The decentralized physical infrastructure network, or DePIN, is disrupting conventional infrastructure models, garnering increasing attention for its potential and scalability. What exactly is DePIN, and how might it transform various industries? According to Pivot Global, DePIN initially referred solely to decentralized physical infrastructure networks. However, it has now evolved into a term encompassing any decentralized protocol that creates a dual-sided market through token-based incentives. Notable examples include Hivemapper, which rewards users for installing dashcams to aid mapmaking, and Grass, which redistributes unused bandwidth. However, Bitcoin is not considered part of DePIN, as its miners do not directly provide services to network users.
# The Necessity of DePIN: Limitations of Centralized Systems
Traditional centralized infrastructure is often plagued by inefficiency and high costs. Monopoly structures tend to stifle innovation, artificially inflate expenses, and limit service accessibility. Similar problems have been observed in enterprise software in the past. Outdated systems provided by large corporations had excessive initial costs and lacked flexibility. For instance, implementing a CRM system required around $1.8 million annually for 200 users, often failing to meet actual business needs. Salesforce addressed these issues with its cloud-based CRM model, offering low-cost software usability.
Likewise, DePIN can address the high costs and central management issues of traditional infrastructure. By transforming infrastructure into a shared resource via decentralized networks, DePIN offers a model that continuously improves with more contributors. Telecommunications giants like AT&T and Verizon are cutting capital expenditures due to the rising data demand and operational costs.
The 5G infrastructure, more intricate and costly than 4G, necessitates more base stations, high-frequency antennas, and cutting-edge technology. These high-maintenance models are ripe for innovation.
# DePIN: An Engine of Opportunity and Innovation
DePIN offers opportunities and drives innovation by transforming infrastructure operations.
1. **Incentivizing Network Participation with Tokens**
DePIN spurs network growth by rewarding participants with tokens. These tokens motivate participation and provide a transparent, automated reward structure through smart contracts, encouraging sustained contributions more effectively than traditional cash-based models.
2. **Cost Reduction and Resource Efficiency**
DePIN eliminates intermediary costs and leverages idle resources to boost efficiency. Open-source projects often suffer from degraded data quality due to insufficient participant rewards. DePIN overcomes these limitations by offering token-based incentives, enhancing sustainability.
3. **Reduced Initial Costs and Democratization**
Tokens offer liquidity in the network’s early stages, providing participants with opportunities for significant initial value. This approach widens infrastructural project participation from monopolistic companies to individuals and small businesses.
# Growth and Key Examples of DePIN
Though in its nascent stages, DePIN is generating substantial demand and expanding its ecosystem. Key examples include:
– **Helium**: A decentralized network that offloads Wi-Fi data, Helium collaborates with T-Mobile and AT&T with over 120,000 users and 308,000 terabytes of offloaded data. Offloading involves transmitting parts of an application from a local device to remote computers with superior computing resources and returning the processed results.
– **Glow**: Supporting renewable energy projects, Glow operates a model that drives additional projects through reduced electricity costs. It anticipates $6.4 million in annual revenue, generating $1.6 million from a single solar farm.
– **GEODNET**: Providing precision location services usable in agriculture, construction, and AR/VR industries, GEODNET has recorded a 15 percent monthly revenue growth and deployed over 10,000 nodes worldwide.
DePIN is poised to generate more use cases through the scalability of blockchain technology and enhanced user experiences. By fostering operational efficiency, broadening accessibility, and promoting innovation, DePIN is set to redefine the concept of infrastructure, paving the way for a more inclusive, dynamic global economy.
