As 2024 kicks off, we’re celebrating more than just a new year - we’re celebrating the one year anniversary of DePIN as we know it. The past 12 months have seen the birth and growth of this new sector in crypto, and things are only ramping up from here.

So here’s a quick review of the first year of DePIN, followed by some trends we see unfolding in 2024:

In this issue
🥇 DePIN Hub Leaderboards
🎉 Celebrating One Year of DePIN!
🎙️ Podcast Updates
👋 Parting Words

This issue is brought to you in partnershp with:

The top DePIN institutional investor

DePIN Hub Leaderboards

Feature

Celebrating One Year of DePIN!

Around this time last year, people in the crypto space began noticing something. A narrative had begun to coalesce around a new generation of blockchain projects - projects like Filecoin, Render, Arweave, Helium, and Livepeer. Instead of focusing on financial services, they attempted to build in the real world, creating networks of physical hardware that could perform the functions of legacy businesses. In a January ‘23 Messari report, Sammi Kassar put a name to this narrative: DePIN, or Decentralized Physical Infrastructure Networks.

In the initial report, Messari identified four major subsectors of DePIN and focused on a handful of foundational projects. To get a sense of how the space has done in the past year, let’s look at the market caps of these tickers from January 2023 compared to the present day.

Wow! That’s a mean increase of 754%, with Akash mooning by an incredible 2421%!

Money has obviously flowed into DePIN, but there are also qualitative signs that the sector is in a period of robust growth. The number of unique projects has increased dramatically, from 60 in January of ‘23 to the 120 listed on DePIN Hub today - and those are only the ones we’re tracking.

The reality is that the space has diversified dramatically over the past year, and while only a few subsectors were recognized back then (servers, sensors, wireless networks, and energy), DePIN is now in the process of expanding to touch every aspect of physical infrastructure that can possibly be reformed by decentralization. New niches like artificial intelligence, decentralized compute, mobility, mapping, and bandwidth exchange are just a few of the areas that new DePIN projects have begun to explore.

Curious to learn more? Let’s take a look at a few trends we see unfolding within the DePIN space, which we’re excited to continue watching in 2024.

Entry Into the Real World
Decentralized Compute
Going Green
AI
Ecosystem-Wide Integration

Entry Into The Real World

For most of 2023, DePIN developers toiled through the bear market, working to build out their networks and bring the supply side online. As the space begins to mature, we’re seeing signs that it’s preparing to leave the realm of abstract speculation and enter the real world. Two things to watch out for:

1. The unveiling of partnerships between DePIN projects and traditional companies.

Earlier in December, Bosch - the massive, multinational engineering and technology company - announced a collaboration with Peaq and Fetch.ai to produce the XDK110 Rapid Prototyping Kit. This all-in-one sensor detects a variety of different environmental measurements (temperature, humidity, air pressure, and more), and pairs with a number of different DePIN projects in the Peaq ecosystem to provide their networks with data. The Fetch.ai component even employs AI to select the most profitable network at any given time, maximizing user rewards.

2. When DePIN isn’t integrating with traditional businesses, it’s beginning to compete with them.

Helium Network, one of the foundational projects in the DePIN space, recently announced the release of Helium Mobile, a $20 a month, unlimited data plan for American mobile users. With the average American paying $157/month on their cellular plan, it offers considerable savings for the average user - and a powerful reminder that decentralized networks do more than just provide monetary rewards for node providers. They have the power to redesign the infrastructure of our daily lives and end the parasitic value extraction of centralized entities.

Decentralized Compute

One narrative that seems particularly promising is the rise of Decentralized Compute. While all DePIN projects are networks of physical hardware, DeComp specifically mobilizes users’ computers to perform computationally intensive tasks like machine learning, data analytics, and video rendering. These actions are typically performed by data centers with tremendous processing capacity, but distributed networks offer benefits in terms of cost as well as security and decentralization.

Standouts:

Render is a peer-to-peer marketplace that lets users contribute their GPU to 3D rendering projects, ultimately for use in producing the open metaverse.

Aleph is a decentralized cloud computing platform that offers serverless computation, as well as database and storage infrastructure.

These projects are exciting in part because they liberate the current generation of tech companies from dependence on centralized infrastructure for high performance computing - very much in keeping with the original philosophy of blockchain.

Going Green

As concerns continue to mount over society’s carbon footprint, the tech world has increasingly turned to blockchain technology in search of solutions. A number of teams have tackled the issue in the past, incentivizing green energy with carbon credit marketplaces, or even using the proceeds from NFT sales to buy up swathes of the Amazon Rainforest for reforestation. By modernizing energy infrastructure, however, DePIN is uniquely positioned to increase efficiency and reduce energy waste.

Standouts:

The Green Network is essentially a peer-to-peer energy marketplace, where users on the supply side receive token rewards for selling power from their portable power banks, electric vehicle charging stations, or home power storage.

Power Ledger takes a similar approach, with an emphasis on designing grids from the ground up to facilitate the exchange of distributed energy resources between users. Power Ledger is also notable for having won the United Nations’ World Summit Award for the Environment and Green Energy category.

Today, large amounts of energy waste occur because of the unidirectional flow of power from centralized generators to retail users. By decentralizing the source of retail energy, DePIN enables systems that are simply better and more efficiently designed.

AI

Artificial intelligence is also a good example of the type of computationally intensive process described above. For LLMs like ChatGPT or Bard to be trained, labs must feed their models massive amounts of data, which they then parse through in search of patterns in the way words are associated with one another. The process requires different resources at each stage: beyond the compute necessary for training, the data itself must be acquired one way or another, and decentralized networks can help with both.

Standouts:

Nosana is a decentralized compute network like the ones we described above, designed to provide computational resources specifically for AI inference workloads.

Grass allows users to contribute spare internet bandwidth that labs can use to scrape the public web for data to train their models with.

Bittensor provides an ambitious platform for machine learning models to train “collaboratively” in an iterative ecosystem, rewarding each with tokens for the informational value they bring to the network.

As AI continues the explosive growth we saw throughout 2023, we only expect to see more DePIN projects jump on board with the narrative.

Ecosystem-Wide Integration

DePIN will inevitably develop in directions we can’t foresee, but one area of innovation will be increasing interaction between different projects and networks.

On the one hand, this will take the form of composability. The same way that protocols can act as a baseplate in DeFi, allowing other projects to build dApps on top off them, we're already seeing examples of this behavior in DePIN. In this case, however, one project's devices or hardware can act as the baseplate for another dApp's network. Picture a world where a Helium miner can double as an ATOR node and provide a relay for the ATOR network while simultaneously contributing to Helium's IoT network.

In addition to this, we're also seeing signs of greater integration, where multiple DePIN products interact harmoniously to improve the capabilities of all parties. Imagine if your Hivemapper device recorded mapping data that could then be processed through Render to produce 3D metaverse environments - which could then be stored on Filecoin. These levels of integration are where DePIN will really start to see exponential growth, and create a flywheel for itself more uninhibited than anything centralized infrastructure networks are capable of.

Standouts:

DIMO is leading the charge in this department, with a deepening collaboration with Natix encouraging users to contribute both vehicle and mapping information to earn more while driving.

In response to Helium’s rollout of their nationwide 5G network, DIMO has also announced plans to partner with the network and ultimately release devices that support both networks at once. By acting as validators and mappers, it’s possible that users will earn both $DIMO and $HNT at the same time.

Looking out into 2024, DePIN is well-positioned to usher in the next generation of great opportunities in crypto, and we couldn't be more thrilled to be here for it. Throughout all of this, DePIN Hub is committed to bringing you all the alpha about the latest and most promising projects. To us, these are not only investment opportunities, they're opportunities to get involved, participate in building a network, and own a stake in the infrastructure of tomorrow. So stay tuned and tell your friends. Yet again, we're all going to make it.

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Parting Words

😱😂 Hoo boy. Let's hope he gets this one right... 😱😂

Yours in Decentralization,
The Hotspotty Team

None of this is financial advice. Although DePIN Hub is awesome and so are you, all content published by Hotspotty and DePIN Hub is strictly educational and is not investment advice nor a solicitation to buy or sell any assets nor to make any financial decisions. Please be careful and do your own research.

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#004 - 2024: The Past and Future of DePIN

#004 - 2024: The Past and Future of DePIN