Author: Messari Crypto & Escape Velocity; Compiler: TinTinLand

Recently, Messari Crypto and Escape Velocity (EV3) recently jointly released < strong>"State of DePIN 2023"The research report provides a detailed and comprehensive explanation of the current status, applications, supply and demand, technological changes and development differences between regionsof the current DePIN track. TinTinLand combined the original text of the report to compile and sort out the core content of this report for you. Let’s look forward to the new opportunities in the DePIN track in 2024!

Highlights

• 
  

  The Decentralized Physical Infrastructure Network (DePIN) leverages cryptographic incentives to efficiently coordinate the construction and operation of critical infrastructure.

• 
  

  As of 2023, the DePIN ecosystem has grown to more than650 projects , covering six sub-fields: computing (250), artificial intelligence (200), wireless (100), sensors (50), energy (50), and services (25).

• 
  

  DePIN with liquid tokens has a total market capitalizationof over 20 billion USD, with annualized on-chain revenue of approximately USD 15 million.

• 
  

  Compared with other incomes based on speculation rather than utility,DePIN 's revenue has been the most resilient during the last market cycle. While the entire crypto market experienced a steep 70-90% decline, DePIN’s revenue was only down 20-60% from its peak.

• 
  

  DePIN More than 600,000 new nodes , mainly from software-based DePIN that utilizes advanced sensors in mobile phones.

• 
  

  Looking ahead to 2024, DePIN may start tryingZK technology, meme coin integration, on-chain artificial intelligence and on-chain gaming.

DePIN track interpretation: Expanding global infrastructure strong>

DePIN is a distributed physical infrastructure network that uses cryptographic incentive mechanisms to efficiently coordinate the construction and operation of critical infrastructure. Because DePIN can bemore efficient, more resilient, and perform betterthan centralized infrastructure, it may be the best way to scale global infrastructure.

DePIN has the advantages ofcrowdfunded capital expenditures, on-chain settlement, decentralized resilience, embracing innovation, and the infrastructure network will become stronger as it scales. As a result, DePIN’s flywheel effect is expected to be strong enough to add $10 trillion to global GDP over the next decade, and $100 trillion the decade after that.

In addition to technological innovation, DePIN can empower and incentivize citizens to improve the public infrastructure around them. In the future, in a world of untrustworthy institutions and incompetent bureaucrats, DePIN will further contribute to the decentralized world by returning wealth and power to citizens and communities.

More than 650 projects, financing is hot

Six categories

The report divides the DePIN track into six categories: computing, wireless, energy, AI, services, and sensing. Each category will disrupt an industry worth more than a trillion dollars > industry. It is worth noting that RWAs (real world assets) and blockchain infrastructure networks (oracles and RPC) are relevant areas for DePIN but are outside the scope of this report.

Currently, the DePIN track has more than 650 projects: a staggering number. Moreover, starting in the second half of 2023, there seems to be an exodus to the Web2 field, and this situation will continue until 2024.

Financing situation

The financing situation in the DePIN track is also quite hot. Smart money in cryptocurrency is making dozens of bets on the DePIN race, and venture capital funds are raising big rounds.

The top five VCs with the most investments in the DePIN track are: EV3 Ventures (15), Multicoin Capital (12), Borderless Capital (11), CoinFund (9), a16z Crypto (6 ).

The DePIN projects with the most funding last year are: Filecoin ($250M), Helium ($250M), Render Network ($110M) ), the top 10 projects have accumulated a total capital reserve of approximately US$10 billion.

Utility drives revenue, Innovative use cases emerge

Market revenue

DePIN Rely on on-chain verification and or settlement to provide critical network resources to consumers, developers, and agents willing to pay for them. Therefore, DePIN’s core revenue should be driven by utility, not speculation.

In the last cycle, DePIN’s revenue showed that it was one of the most resilient in terms of on-chain revenue among all tracks. The core business model generated over $15 million in annualized on-chain revenue.

Actual use cases

DePIN is transforming into a platform with diverse use cases. In 2023, DePIN addedmore than 600,000 new nodesin wireless, computing, and sensor networks. Last year, dozens of emerging DePIN networksadded 100-500 nodes and will rapidly expand in 2024. This all shows that DePIN is on a rapid growth trajectory. The report mentioned that in 2024 we will see more DePIN emerging and expanding in application directions such as mobility, geospatial, health technology, weather, etc.

Continuously improve expansion efficiency, Build infrastructure

Improve supply efficiency

DePIN is making significant efforts to become more efficient in expanding its supply. With the iteration of new DePIN projects and technologies, future DePIN development will pay more attention to efficiency improvements, even if it is possible to sacrifice a certain degree of decentralization.

Methods to improve the efficiency of hardware DePIN include: bursting/enhancing mining rewards through off-chain data and decision-making to encourage high-value deployment, DePIN, which has higher capital requirements, may benefit from this. Effective ways to improve the efficiency of software DePIN include: before actually issuing tokens, first adopt a points mechanism that may be converted into tokens to attract users, and then expand to tens of thousands or even hundreds of thousands of active users.

Extended infrastructure

DePIN Infrastructure Winners are beginning to emerge, and the Solana ecosystem is currently leading the way, with its integrated infrastructure and performance-focused developer community attracting DePIN projects at all stages to join. The second is the IoTeX ecosystem. Its focus on DePIN modular facilities will accelerate the development of more developers to join the DePIN track more easily.

Currently most DePIN is built on a universal chain, but by 2024,DePIN-specific infrastructure will be launched and scaled on Layer1.

New directions for DePIN integration in 2024

In 2024, we will see DePIN begin to experiment more deeply with new cryptographic foundations including zero-knowledge proofs, Meme, on-chain AI and on-chain games:

DePIN x AI

Last year, a number of decentralized AI-related projects have received large amounts of financing. ZK’s verifiable GPU cloud computing platform is expected to achieve on-chain inference economies within 1-2 years, and centralized providers cannot provide this service, which will bring new opportunities to DePIN.

The report specifically mentions the development of the Bittensor project. Powered by Substrate, Bittensor is an exciting AI DePIN project that creates an incentive layer powered by Bitcoin-style tokenomics to capture maximum computing power and open up AI silos.

DePIN x Memecoins

Meme coin is clearly becoming a real catalyst for mass adoption of DePIN.

DePIN x ZK

Web3's vampire attack on Web2 will become the next gold rush, and developers will create the most popular Web2 applications aligned with user interests on projects built on new high-performance ZK infrastructure clone.

DePIN x Gaming

As more and more DePIN activities move on-chain, the design space for real-world infrastructure and on-chain games will grow faster than anyone expects.

DePIN x Privacy

ATOR will fork the Tor network in 2024 with the goal of creating a scalable, high-performance ecosystem for privacy-focused developers to build upon.

DePIN x Asia

DePIN is a global movement, and the DePIN ecosystem in Asia is growing rapidly, and the report predicts that there will bemultiple top ten DePIN projects in 2024-2025 emerging in Asia.

Terminal device

In the future, terminal DePIN devices may be in your pocket: the founders of Silencio, Helium Mobile, NATIX Network and others are leading the way status. The report mentioned that more DePIN founders will discover this in the future, or follow existing practices, create more DePIN projects that do not require users to purchase new equipment/special equipment, and rapidly expand their scale.

Overall, DePIN is still in its early stages and now is the best opportunity to get involved, be an early adopter and reap the rewards. The number of DePIN track projects is increasing day by day, especially the recent hot market trend, which illustrates the market’s recognition of this track. In the future, DePIN will become increasingly mature and will require long-term efforts by the market, institutions and developers before it can gradually enter people's lives and be widely used.