Meet DePINs, web3’s best shot at real-world adoption in 2023
No matter how much you believe in the Web3 dream after the rollercoaster of cryptocurrency has been on the ride for the past few years, it’s hard not to stop grinning when a new buzzword pops up. So when Messari unveiled a new name for what had been in Web3 for some time — DePIN, a distributed physical infrastructure network — commentators said: memes and snarksBulls and bears come and go, but memes are forever.
As much as I love memes, the reality is that DePIN is Web3’s definitive best shot, destined for actual real-world adoption rather than just another bull market. And while its representative children’s tales, full of accidents and misfortunes, should serve as lessons for the sector, they’re not the bells and whistles of its passing.
In essence, DePIN uses blockchain and tokens to encourage crowdsourcing of infrastructure to deliver real-world services and value. An example is shown below. Suppose you start a new Internet Service Provider (ISP) business. Providing access to end users requires investing billions of dollars in purchasing and deploying hardware and hiring countless staff to maintain the grid.
If we choose the DePIN method instead, we offer token-based incentives for both individuals and businesses to deploy their own infrastructure and link it to the network.It will also provide a marketplace for offering services and value tokens. real world value These businesses generate Staying with the ISP example, introduce a mechanism that allows end users to convert their tokens into tokens of stable value to pay for their connection. This mechanism protects end users from market volatility and ensures that services are not unreasonably expensive.
The net result of this scenario is a community-driven infrastructure grid with decentralized ownership and self-reinforcing incentive loops. It can expand at a tremendous pace, promote personal ownership and empowerment, and enter markets that fall below the cost-to-return ratio favored by traditional names. Investors are watching, looking for ideas that could disrupt an industry hungry for real innovation. But despite all this potential, so far DePIN’s story has been accompanied by a recession.
Coming of a bear market
When discussing all things DePIN, it’s hard to avoid all the elephants in the room. Yes, Helium, People’s Network.
Helium is a DePIN focused on providing Internet of Things connectivity. This allows users to earn revenue by setting up and using access points with hardware purchased from them. Once hailed as the hero of real-world blockchain adoption, he has come under some criticism in the wake of some very big issues. About claims A Forbes survey revealed. On top of that, Helium’s supply-side hardware quickly expanded to just under a million hotspots according to the company’s website, but the demand for LoRaWAN connectivity is growing rapidly with such a large infrastructure. Not enough to guarantee structure.
Another famous example is Filecoin, a decentralized data storage platform that serves as a Web3 representation of services like Dropbox.in spite of some rough startthe project launched its mainnet in late 2020 and recently posted some pretty stuff three-dimensional figure It suggests growth and adoption.
Skeptics may point to the fact that the tokens in each of these projects are unaffected by the bear market, but with initiatives like this, the tokens don’t tell the whole story. Even those who don’t read know that the macro economy isn’t in the best shape by now. The past year has been pretty bad for the economy overall. Naturally, this has led investors to withdraw from riskier assets. No matter how great your idea may be, it will save you from war, the plight of his chain of supplies, post-pandemic inflation, and any black swans that stand in our way in 2023. I can only protect it.
The real metric here is scaling. Helium’s case may be darker than Filecoin’s, but both prove the underlying model’s ability to foster rapid growth and deployment in a market hitherto dominated by centralized entities. doing. They can shoot from zero to thousands of devices on their respective networks at a fast pace, don’t need to hire large staff to deploy and maintain them, and the community owns the infrastructure to service them. I made it possible.
Projects to bring this model into an established and in-demand market have had an uphill battle to combat entrenched conventional names, but the model’s inherent competitive advantage gives it a solid beachhead With some business wisdom and perseverance, this inclusive and egalitarian model will allow older companies to grow while maintaining financially viable services for both end users and infrastructure suppliers. It can give your body a competitive edge. It’s a tough act to balance, but it’s not.
Will this be enough for the ultimate bull run where everyone buys Lambo directly to the Moon? Only time will tell. What is certain, however, is that this model is the most likely of his Web3 actually being adopted in the real world. And the real-world value it provides provides a sound foundation for sustainable growth rather than wild speculation.