TL;DR

1. DePIN Overview: Decentralized Physical Infrastructure Networks (DePIN) combine the physical world with Web3, using decentralized technology to reduce costs and improve efficiency. They are widely applied in computing, storage, wireless networks, and more, spanning from traditional fixed devices to new-generation portable and wearable devices, presenting vast market potential.

2. Investment Trends and Projects: DePIN projects have shown significant growth in both bull and bear markets, covering wireless networks, mapping, vehicle networks, agriculture, drones, weather, energy, and more. Investment institutions have expanded from the US and Europe to Asia, with increasing participation and investment numbers, indicating strong interest in the DePIN sector.

3. Market Demand and Potential: Emerging DePIN markets are diverse, including health data, weather, energy, bandwidth, AI, and mobile phones, with huge market space and high growth rates. The energy and mobile phone markets, in particular, show immense potential, while health data and AI markets also demonstrate considerable year-on-year growth.

4. Project Ecosystem and Blockchain Choices: Ethereum and Solana are the main blockchain choices for existing and emerging DePIN projects, respectively. Solana, with its high performance, low cost, and strong community support, has attracted numerous new projects, gradually becoming the preferred platform for DePIN projects. Representative projects like Render, Helium, and Hivemapper showcase the diverse applications of DePIN. Key players such as Solana and IoTeX provide strong technical support and ecosystems for DePIN projects, driving rapid development.

5. Modular Blockchain Trends: Modular design significantly enhances the scalability and adaptability of DePIN. With standardized interfaces and interchangeable components, DePIN can flexibly adapt to various application scenarios and technical requirements, promoting rapid network deployment and maintenance.

6. Evolution of Tokenomics: From early fixed incentive models to dynamic incentive mechanisms, DePIN projects like Helium adjust incentives for new and old devices, regional incentive policies, and time-based adjustments to ensure continuous network growth and healthy development.

Definition of DePIN

DePIN, short for Decentralized Physical Infrastructure Network, can be literally interpreted as “decentralized physical infrastructure network.” Here’s a breakdown: “De” stands for Decentralized；“P” represents Physical；“I” signifies Infrastructure, and “N” means Network.

The core definition of DePIN is to bring real-world users into Web3, achieving cost reduction and socialization through decentralized networks. In the current world, especially in the realm of physical businesses, DePIN aims to achieve cost reduction and efficiency improvement through decentralized technology.

While previous studies and reports have often focused more on the Infrastructure aspect of DePIN, this report (please download the full PDF version from the official website) emphasizes the Decentralized part, striving to showcase the diverse future markets and investment opportunities in the DePIN space.

Types of DePIN Projects

Classic DePIN Devices:

Characteristics: These devices are typically stationary and fixed in one location.

Primary Functions: Include computing, bandwidth, and storage.

Market Features: The market for classic DePIN projects leans towards technology, particularly in fields like AI computing power, which attracts significant funding and traffic. This market is large but highly competitive, often referred to as a “red ocean.”

Representative Projects: Filecoin, RNDR, etc.

New Generation DePIN Devices:

Characteristics: These devices are small, flexible, portable, and even wearable.

Primary Functions: Include lifestyle-related services such as health monitoring, weather forecasting, and mobile phone functionalities.

Market Features: The market for new generation DePIN projects is more lifestyle-oriented and low-cost, suitable for everyday applications. This market is diverse and has a wide range of applications, with enormous potential yet to be fully explored, often referred to as a “blue ocean.”

By comparing these two generations of DePIN projects, we can see that DePIN technology is continuously evolving, with expanding application scenarios. From traditional fixed devices to more flexible and portable ones, the market potential of DePIN is becoming increasingly vast, covering various needs from high-tech sectors to everyday life. The traditional DePIN market is large and competitive, a red ocean; whereas the innovative DePIN market is diverse, widely applicable, and has vast potential, a blue ocean.

DePIN Investment Ecosystem Overview

During the current bull market cycle, the number and variety of DePIN projects have significantly increased, with a surge in new generation lightweight DePIN projects. These include AI, wearables like wristbands and watches that collect health data, and many portable lightweight physical DePIN devices.

2022.1.1 - 2023.1.1

There are a total of 19 DePIN project financings, and the average financing amount disclosed is 18M. After excluding Helium’s D round of 200M large financing, the average financing amount is 5.9M.

The project types are wireless networks, mapping, vehicle network data, agriculture, drone imaging, weather, power market, DePIN infrastructure. Among them, the wireless network category has the most common project type, with 7 projects.

2023.1.1 - 2024.1.1

There were a total of 9 DePIN project financings, and the average financing amount disclosed is 7.2 M, which was significantly lower in quantity than in 2022 (bear market), and the amount increased by 22% compared to 2022.

Project types include wireless networks, decentralized computing power, mapping/geospatial data, weather, DePIN infrastructure, and fewer projects and categories.(indicating a need for more viable business scenarios and models during a bear market)

2024.1.1 - 2024.5.20

There are a total of 26 DePIN project financings, and the average financing amount disclosed is 6.5M. The number of financings has increased significantly, and the financing amount has decreased.

Project types include decentralized computing power, vehicle networks, IoT, wireless networks, FHE, mapping, weather & environment, bandwidth, DePIN infrastructure, mobile phones, energy, storage, mixed reality.

Emergin first-level undisclosed financing types: AI, VPN, wearables like wristbands and watches, and portable device projects (health data).

source：MT Capital

DePIN Project and Institutional Involvement

In the previous cycle, DePIN participation was predominantly led by institutions from Europe and the United States. In the current DePIN cycle, more Asian institutions are emerging, showing a growing interest in DePIN from this region. The number of DePIN projects has also significantly increased, with over 135 secondary DePIN projects and more than 130 primary DePIN projects.

Project Breakdown:

•Secondary Market Projects: 137 projects

•>$1B FDV: 20

•$500M - $1B: 19

•$100M - $500M: 48

•$50M - $100M: 16

•$30M - $50M: 14

•$10M - $30M: 12

•<$10M: 6

•Primary market projects: 133

•Since the start of the current bull market cycle (from October 2023 to present), 8 projects have raised over $2M in funding, and 6 projects have raised over $10M.

source：MT Capital

DePIN Investment Institutions

Previous Cycle:

•Andreessen Horowitz (A16z)

•Multicoin Capital

•HashKey Capital

•IOSG Ventures

•Spartan Group

•Borderless Capital

•Lattice Ventures

•Variant Fund

•Delphi Digital

•Big Brain Holdings

•Cogitent Ventures

Current Cycle:

•OKX

•Animoca Brands

•JDI

•IoTeX

•FMG

•Waterdrip Capital

•MH

DePIN Market Demand

In the previous cycle, sub-sectors like computing power, storage, wireless networks, and mapping saw continuous emergence of new projects. In the current cycle, new sub-sectors have emerged, including wearables focusing on health data, weather, energy, bandwidth, AI, and mobile phones.

From the market demand perspective, the energy and mobile phone markets have vast potential. The health data market and AI market not only have significant market space but also exhibit very high year-over-year growth rates, making them very attractive markets.

Market Breakdown (Number of Primary + Secondary Market Projects):

Health (5+/), Weather (9+1), Energy (15+10), Computing Power (17+29), Storage (7+19), Wireless Network (9+11), Bandwidth (6+4) , mapping (3+2), AI (8+13), mobile phone (5+)

Previous Cycle Market Project Numbers:

•Computing Power: 17+29

•Storage: 7+19

•Wireless Network: 9+11

•Mapping: 3+2

Emerging Market Project Numbers:

•Health data (wearable devices): 5+

•Weather: 9+1

•Energy: 15+10

•Bandwidth: 6+4

•Mobile Phone: 5+

•AI: 8+13

source：MT Capital

Market Size and Growth Rate

•Health Market: $243B, CAGR 17%

•Weather Market: $7B, CAGR 7%

•Energy Market: $880B, CAGR 8.4%

•Computing Power Market: $95.7B, CAGR 6.8%

•Storage Market: $108B, CAGR 22%

•Wireless Network Market: $500B, CAGR 12%

•Bandwidth Market: $8.6B, CAGR 13.75%

•Mapping Market: $19B, CAGR 12.5%

•AI Market: $150B, CAGR 36.8%

•Mobile Phone Market: $484B, CAGR 7.3%

source：MT Capital

Blockchain Choices and Device Types

source：MT Capital

Currently, there are the largest number of secondary market DePIN projects on the Ethereum chain, with a total of 70 DePIN projects choosing to be built on Ethereum, accounting for 81% of the total.

Among the collected first-level projects, the number of Solana ecological projects is 28, accounting for 62% of the total. Solana is gradually becoming the first public chain for the new cycle of DePIN projects.

source：MT Capital

From the perspective of equipment types, there are more new energy and sensor equipment types. And more projects using Wearable, Portable, and Home Device devices as physical hardware are beginning to emerge in the primary market.

DePIN Full Industry Chain

Upstream Supply Chain

1. Hardware Manufacturing and Supply

Hardware Suppliers: Produce various devices and sensors used in DePIN networks, such as GPUs, servers, IoT devices, and wireless devices. For example, LoRaWAN hotspots for the Helium network and dash cams for Hivemapper.

Professional hardware manufacturers: Some professional hardware manufacturers provide customized hardware for specific DePIN projects, such as Filecoin’s storage miners and Render Network’s GPUs.

1. Chips and Semiconductors

Chip Manufacturers: Companies like NVIDIA and AMD provide high-performance GPUs used in computing networks like Render and Akash. These chips are essential for handling AI workloads and complex computational tasks.

1. IoT Devices

Sensor Manufacturers: Provide sensors needed for environmental monitoring, traffic data collection, and more. Examples include Bluetooth sensors in the Nodle network and noise pollution detectors by Silencio.

Smart Devices: Smartphones and other mobile devices can be part of the sensor network, used for data collection and transmission.

1. Power and Energy Equipment

Energy Equipment Suppliers: Provide equipment for decentralized energy networks, such as solar panels, wind turbines, and storage batteries. Examples include solar panels and battery systems in the Daylight Energy network.

Midstream Industry Chain

1. Network Operation and Maintenance

Network Operators: Companies like Helium and Hivemapper manage and maintain the decentralized networks, including node management, data transmission, and storage.

Service Providers: Provide essential infrastructure services for the networks, such as cloud computing and storage services.

1. Software and Platform Development

Blockchain Platforms: Platforms like Solana and IoTeX offer foundational blockchain technology support for DePIN projects, including smart contract execution, data storage, and validation.

Software developers: Develop software platforms and tools for managing and operating the DePIN network, such as the distributed storage management platform provided by Filebase and the video stream management tool provided by Livepeer Studio.

1. Data processing and analysis

Data analytics companies: Process and analyze data collected from sensor networks to provide users with valuable insights and services.

AI and machine learning services: Beam, for example, provides cloud AI computing services to distribute model training and inference workloads to a decentralized GPU network.

Downstream Industry Chain

1. Applications and Services

Enterprise Customers: Use services provided by DePIN networks to enhance business efficiency. For example, logistics companies use Hivemapper’s mapping data, and agricultural companies use Geodnet’s high-precision positioning data.

Consumer Applications: Applications like Teleport’s ride-sharing app and DIMO’s vehicle data platform offer convenient services to consumers and reward them for contributing data.

Smart Cities and Public Infrastructure: Utilize data and services from decentralized networks to optimize city management and public services, such as energy management and traffic management.

Modular/Data Layer/Middle Layer

Modular blockchains enhance scalability, security, and flexibility by separating core functions — such as execution, consensus, data availability, and settlement — into different layers. For instance, Ethereum improves data availability and processing capacity through sharding and rollups, while Cosmos achieves cross-chain interoperability and high customization with its IBC protocol and Tendermint consensus mechanism. The advantages of modular blockchains include higher transaction throughput, enhanced security, and greater development flexibility, which will further advance blockchain technology.

The modular trend in DePIN significantly enhances its scalability. Modular design allows DePIN to flexibly adapt to different application scenarios and technical requirements, simplifying network deployment and maintenance through standardized interfaces and interchangeable components. For example: Render Network utilizes a modular structure to expand from image rendering to AI model training, increasing its service range and market potential. Also, Filecoin’s modular design enables the extension of its storage services to include hot storage and data computation functions, further enhancing its network’s utility and appeal. The modularization trend not only improves the technical compatibility and upgrade capabilities of the DePIN network, but also enables independent development and optimization of each independent module, thereby accelerating innovation and progress of the entire network ecosystem. This flexible and efficient architecture greatly improves the scalability of DePIN, allowing it to respond more quickly to market demands and technological changes, promoting the widespread application and development of decentralized infrastructure.

Representative Projects

DePHY

DePHY is a development framework specifically designed for DePIN, featuring key functionalities such as message layers, Device ID (DID), open-source hardware design, off-chain computing networks, and re-staking layers. These features significantly reduce development costs and time, supporting any standard interface hardware for the rapid, efficient, and secure deployment of decentralized infrastructure projects.

PING PONG

PINGPONG is a DePIN liquidity and service aggregator that optimizes and maximizes mining yields across multiple networks through innovative tools and solutions.

Core Players in the DePIN Track

Solana

Solana is emerging as a new super infrastructure for DePIN. Its high performance, low network fees, robust developer and user community, and high purchasing power make it the preferred launch network for many DePIN projects. Established DePIN projects like Render and Helium have achieved greater success after migrating to Solana, demonstrating the vitality that Solana’s powerful infrastructure and extensive community base bring to DePIN projects. Solana is gradually attracting various emerging and cutting-edge DePIN projects, including Grass, Natix, and Exabits, while steadily improving its own DePIN ecosystem.

Representative Projects

Render

Render Network is a decentralized GPU rendering platform that uses blockchain technology to connect artists with GPU providers, offering scalable and cost-effective rendering solutions.

Hivemapper

Hivemapper is a decentralized map network that uses blockchain technology and crowdsourced dashcam data to create detailed, real-time maps.

Helium

Helium is a pioneering DePIN project that created a decentralized wireless network, allowing IoT devices to connect globally through a distributed network of hotspots.

Natix

Natix Network is a blockchain-based crowdsourced camera network designed to create real-time world maps.

Exabits

Exabits is a decentralized infrastructure for AI and compute-intensive applications. It enables users to provide distributed GPU services, data storage, or expertise to the AI community without a central authority or intermediary.

Grass:

Grass, developed by Wynd Network, is a DePIN project that allows users to monetize their unused network resources by adding their connected devices to a decentralized network designed to provide data for AI training.

EV3

EV3 is an investment-driven firm that supports entrepreneurs building DePIN (Decentralized Physical Infrastructure Networks). By investing up to $1 million in early-stage projects, EV3 aims to unlock the next $100 trillion of global GDP through next-generation open infrastructure networks, such as telecommunications, logistics, energy, cloud computing, and artificial intelligence. Founded by institutionally trained investors Mahesh Ramakrishnan and Salvador Gala, EV3 combines deep industry expertise with long-term partnerships, backed by leading investors.

Representative Projects

3DOS

3DOS is the world’s largest decentralized on-demand manufacturing network, aiming to revolutionize manufacturing through blockchain technology and 3D printing. The platform allows anyone to upload designs, receive royalties, and facilitate on-demand manufacturing globally.

Zonal

Zonal is developing a decentralized network based on a micro-location protocol, utilizing wireless communication technologies such as ultra-wideband (UWB) and low-power Bluetooth (BLE) to provide highly reliable global and indoor positioning services. Its goal is to create a unified protocol offering location verification tools for various services and enterprises, validating real-world interactions.

XNET

XNET is a next-generation mobile operator building a decentralized network using blockchain technology. By leveraging the CBRS spectrum, XNET aims to establish a reliable, industry-grade neutral host network. The project’s goal is to address inefficiencies and capital intensity in the telecommunications industry through its distributed radio access network (RAN).

IoTeX

IoTeX is an open platform designed for modular AI+DePIN infrastructure, aimed at connecting smart devices and real-world data with Web3. It enables Web2 to seamlessly integrate with blockchain, creating a decentralized open ecosystem of multi-dimensional data and scenarios. Through modular construction, developers can connect innovative applications in Web3, ranging from smart wearables and vehicle networks to green energy and environmental data, covering a full spectrum from smart living to intelligent industries.

As of Q1 2024, the IoTeX network has 108 active nodes, with a total staked value reaching $29 million, marking a quarter-over-quarter growth of 73%. The average staking participation rate reached a record high of 40.6%. Additionally, node rewards grew by 71% quarter-over-quarter, totaling $3.3 million.

IoTeX provides comprehensive “plug-and-play” products and tools, enabling efficient construction and deployment of blockchain-driven IoT applications. The platform is divided into four layers: hardware, middleware, tools, and blockchain. Since its inception, IoTeX has raised over $90 million to support its R&D and market expansion. IoTeX’s solutions support various IoT ecosystems, such as the sharing economy, smart homes, autonomous driving, and supply chain management.

Representative Projects

Network3

Network3 is an integrated AIoT Layer 2 blockchain platform designed to provide AI developers with efficient model training and validation tools, while empowering users to earn cryptocurrency by running nodes.

Inferix

Inferix is a decentralized GPU visual computing platform dedicated to 3D/AR/VR rendering and AI inference.

Wayru

Wayru Network is a decentralized wireless network that achieves various smart functions through WayruOS and the Wayru Connectivity Superapp.

DePIN segmented by physical hardware devices

source：MT Capital

source：MT Capital

Primary Market Projects Mapping

Sensor Track

We define “sensors” as outdoor sensors that help users collect various types of data, such as mapping, weather, and vehicle information. These outdoor sensors gather data, which users can then contribute to create a data value network and receive corresponding token rewards. DePIN projects can aggregate this shared data from users, providing B2B customers with a more diverse data sample and capturing commercial revenue from Web2.

Representative Projects

Mapping Network

Hivemapper

Hivemapper is a decentralized mapping network that uses blockchain technology and crowdsourced dashcam data to create detailed real-time maps.

Vehicle Network Data

DIMO

DIMO is a decentralized IoT vehicle data DePIN network that allows vehicle owners to collect, use, and monetize their vehicle data.

Positioning Network

Geodnet

GEODNET is a blockchain-based global earth observation decentralized network that uses Real-Time Kinematic (RTK) technology to significantly improve GPS accuracy.

Wireless Network Track

Mobile Wireless Network

• Market Size and Growth: In 2022, mobile wireless networks held over 76% of the telecom market share, driven mainly by 5G and IoT technologies. The compound annual growth rate (CAGR) from 2023 to 2030 is projected to be 6.2%.
• Role: Provides extensive personal and commercial connectivity through cellular technology. Supports various devices and applications, enabling mobile communication and data services.
• Future Outlook: The demand for mobile wireless networks will continue to rise due to increasing demand for higher bandwidth, advancements in 5G technology, and the integration of IoT devices.

Helium

Helium is a pioneering DePIN project that created a decentralized wireless network, allowing IoT devices to connect globally through a distributed network of hotspots.

Fixed Wireless Access (FWA)

• Market Size and Growth: FWA is rapidly growing as an alternative to wired broadband, especially in areas where laying cables is impractical. The market size is expected to grow from 130 million connections at the end of 2023 to 330 million by 2029.
• Role: Provides internet service using radio waves between fixed points. Typically deployed in areas with inadequate mobile wireless network service, offering lower costs and easier deployment compared to mobile wireless networks.
• Future Outlook: With the advancements in 5G technology, FWA is expected to become a more prevalent form of internet access, particularly in remote and underserved rural areas.

Andrena

Andrena is a high-speed fixed wireless access network service provider, using cutting-edge radio technology to create high-speed, low-cost wireless networks in urban and underserved areas.

Wi-Fi Network:

• Market Size and Growth: The market was valued at approximately $14.5 billion in 2023 and is expected to reach $39.4 billion by 2028, with a CAGR of 22.2%.
• Role: Provides local area network (LAN) connections for devices using radio waves, supporting a wide range of consumer electronics from smartphones to home appliances. Used in homes, businesses, and public hotspots within limited private spaces.
• Future Outlook: Market growth will be driven by the increasing need for reliable internet connections for smart devices and the growing implementation of IoT in both public and private sectors.

Roam

Roam is a decentralized global Wi-Fi network offering enterprise-grade OpenRoaming Wi-Fi roaming services to the global public.

Energy Track

The traditional energy market faces several issues: mismatched supply and demand in regional energy networks, lack of transparent and tradable energy markets, a vast untapped clean energy market, and slow, costly energy network expansion. However, DePIN can help shape the next generation of decentralized energy networks.

From a market perspective: The clean energy market is experiencing significant growth, currently valued at approximately $1.4 trillion, with a projected compound annual growth rate (CAGR) of 9.1% from 2022 to 2032. The renewable energy market is expected to grow from a market size of $881.7 billion to around $1.9 trillion by 2030, with a CAGR of approximately 8.4%. Energy-related DePIN projects have a vast market space to tap into.

Power Plant:

StarPower

StarPower is a pioneering DePIN project aimed at revolutionizing energy management and distribution by creating virtual power plants (VPPs) through a decentralized network utilizing blockchain technology.

Energy Trading

Daylight

Daylight is an open-source blockchain network focused on creating a decentralized market for renewable energy and carbon credits, promoting more sustainable global energy trading and usage.

Energy Storage

PowerPod

PowerPod aims to revolutionize electric vehicle (EV) charging by creating a shared, blockchain-driven network of community-owned charging stations.

Home Devices Track

The home devices sector focuses on enhancing and optimizing various aspects of daily life through decentralized technology. This field addresses key issues such as high costs, privacy concerns, and unequal resource distribution by transforming standard household devices into decentralized network nodes. By utilizing blockchain and other decentralized protocols, these devices offer low-cost, secure, and efficient alternatives to traditional cloud services and computing power. This approach reduces reliance on centralized infrastructure and grants users greater control over their data and resources. Additionally, the integration of these devices not only enhances smart home ecosystems and gaming experiences but also aims to improve daily interactions, creating a globally connected community.

FX land

FX Land offers a distributed cloud storage solution through Crowd Storage nodes and the Fula protocol, addressing high storage costs and privacy issues.

Hajime AI

Hajime AI aims to create a global edge computing power supply network that provides cost-effective computing services for AI startups. This decentralized platform addresses the uneven distribution of computing resources and plans to seamlessly integrate with smart home and IoT ecosystems.

FrodoBots

FrodoBots addresses embodied artificial intelligence (Embodied AI) challenges by using real-world robots in a gamified manner.

Wearable Devices Track

The wearable devices sector focuses on integrating smart wearable technology with blockchain. These devices use advanced artificial intelligence and data privacy protection technologies to offer personalized health monitoring and data management services. By enabling users to monetize their data and providing reward mechanisms, these devices encourage active participation in health management. Made from high-quality materials with long battery life and robust waterproof capabilities, these smart wearables ensure user convenience and safety. Additionally, they are compatible with mainstream mobile devices and cryptocurrency ecosystems, enhancing user health and quality of life while promoting the widespread adoption of decentralized applications and the Web3 ecosystem.

CUDIS

CUDIS is a stylish, pioneering AI smart ring that incentivizes users by rewarding their health journeys. It features immutable data collection and control, personalized AI coaching, health incentive tasks, and social activities.

WatchX

The WatchX project aims to integrate millions of smartwatch users into the Web3 ecosystem, providing extensive opportunities for partners within the ecosystem.

Dogwalk

A DePIN platform that enhances interactions between pet owners and Web3 users by integrating innovative software and hardware with GameFi and SocialFi elements.

Portable Devices Track

Portable devices focus on providing convenient mobile devices and applications to enhance the Web3 experience. They aim to simplify user interactions, improve security, and implement data ownership and reward mechanisms. These projects integrate hardware and software solutions to promote the development and use of decentralized applications, especially in mobile environments. The goal is to drive the adoption and application of Web3 technologies by lowering entry barriers, optimizing user experience, and providing practical use cases.

Solana Mobile Saga

The Solana Mobile Saga project aims to lead the Web3 mobile revolution by providing top-tier hardware and robust developer resources, offering a secure and user-friendly decentralized application experience.

Universal Phone Oyster Labs

The Universal Phone project by Oyster Labs targets 800 million Telegram users, focusing on emerging markets such as India, Indonesia, and Nigeria.

Puffpaw

Puffpaw is a “quit-to-earn” project incubated by Arweave and OrangeDAO. It helps users quit smoking using vaping devices and blockchain technology, offering financial rewards for their progress.

Tokenomics of DePIN Projects: Evolution from Fixed to Dynamic Incentives

Intrinsic Logic Analysis: Helium Case Study

Early Incentive Mechanism and Its Impact

In the early stages of the Helium project, early participants could earn significant token rewards by purchasing and deploying mining devices. This high return attracted a large number of early users and rapidly expanded the network. However, this incentive mechanism also led to some issues:

High Profits for Early Participants: Early users quickly achieved high returns due to the large number of tokens they earned. While this drove rapid network growth initially, it also led to a rapid increase in the token supply in the market.

Tokenomy Volatility: As early participants held a large number of tokens, they started selling them on the market, causing token price volatility and declines. New users entering the market found their returns significantly lower than those of early users, slowing the growth of new users.

Network Growth Stagnation: As the initial high returns diminished, the willingness of new users to join decreased, slowing the network’s expansion and project growth.

Introduction of Dynamic Incentive Mechanism

To address these issues, Helium introduced a dynamic incentive mechanism to ensure continuous network growth and healthy development.

Adjusting Incentives for New and Old Devices: Helium adjusted the incentive mechanisms for new and old devices, allowing new device users to receive attractive rewards. For example, initial rewards for new devices were increased, while rewards for outdated devices were gradually reduced, encouraging users to purchase and deploy new devices.

Regional Incentive Policies: To promote balanced global network development, Helium implemented differentiated incentive policies based on device deployment in various regions. Higher token rewards were offered in areas with fewer devices to attract users to deploy devices there.

Time-based Incentive Adjustments: Helium balanced network load and enhanced device utilization by offering different rewards at different times. Users operating devices during off-peak periods could earn additional rewards, ensuring stable network operation around the clock.

Device Density Incentives: In areas with low device density, Helium provided extra incentives to promote stable device operation and efficient data transmission. This not only increased user returns but also improved overall network performance.

Implementation of Dynamic Incentives

Helium uses smart contracts and algorithms to implement dynamic incentive mechanisms, ensuring real-time adjustments and fair distribution of incentives. These measures increased new user participation enthusiasm and stabilized market expectations, preventing market volatility caused by early high returns.

Smart Contract Incentive Adjustments: Through smart contracts, Helium dynamically adjusts rewards for different devices based on usage and market demand, ensuring incentive flexibility and real-time responsiveness.

Real-time Data Feedback: By collecting and analyzing device operation data, Helium can promptly adjust incentives for different regions and time periods, ensuring optimal resource allocation and utilization.

Transparent Incentive Mechanism: The transparency and openness of the dynamic incentive mechanism enhance user trust, encouraging more users to participate in network construction.

Changes in Incentives for New and Old Devices

New Device Incentives: To lower the entry barrier, new devices typically receive higher initial incentives to attract early adopters. High token rewards and lower initial costs encourage users to purchase and deploy new devices, making it easier for new users to participate.

Old Device Maintenance Incentives: To prevent users from abandoning old devices, Helium offers ongoing incentives, though these may gradually decrease over time. By providing device upgrade rewards and maintenance cost subsidies, Helium can manage the operating costs of old devices, ensuring their continued effective operation.

Physical Market Changes

Device Price Adjustments: Based on market demand and device lifespan, Helium adjusts prices for different types of devices. New devices generally cost more due to production capacity, supply, and order reasons, but they also offer higher incentives. Older devices are cheaper but still provide stable returns, attracting a diverse user base.

Secondary Market Trading: Devices can be traded on the secondary market, with Helium collecting transaction fees and using part of the proceeds for token buyback and burn to support token prices. This increases device liquidity and stabilizes token value.

Different Regional Markets

Regional Incentive Policies: To promote balanced global device deployment, Helium implements differentiated incentive policies based on market demand and development in different regions. Higher rewards in low-density areas attract more device deployments, achieving global network coverage.

Localized Support: Helium provides localized technical support and training in different regions, helping users better install and maintain devices, enhancing device operational efficiency and user participation. This localized support effectively promotes project expansion and development across regions.

Device Density

Density Rewards: In areas with low device density, Helium offers additional rewards to stimulate growth, promoting stable device operation and efficient data transmission. These rewards may include higher token incentives and device upgrade subsidies, encouraging users to maintain optimal device performance.

Dynamic Adjustments: Helium dynamically adjusts device density incentives based on real-time data to ensure balanced network development and optimal resource allocation. This flexibility allows Helium to respond to market changes and optimize network performance.

Device Operation Time

Time-based Rewards: To balance network load and increase device utilization, Helium sets different rewards for different time periods. Users operating devices during off-peak periods can earn additional incentives, ensuring stable network operation around the clock.

Load Balancing Mechanism: Helium uses smart contracts and algorithms to dynamically adjust time-based incentives, achieving balanced network load distribution and optimal resource utilization. This mechanism effectively manages network resources and improves overall operational efficiency.

Summary and Outlook

We believe that both classic and new generation DePIN projects have a broad range of categories and extensive markets, with the potential to produce significant projects with large-scale user adoption. It is highly likely that a project from this sector will emerge as a Top 20 Web3 project in the future.

The core logic of DePIN lies in the cost reduction and efficiency improvements that Web3 brings to existing world operations. By integrating real-world users into Web3, DePIN not only achieves cost-effectiveness and socialization but also significantly increases the quantity and accuracy of data sources. The market outlook for DePIN, from fixed devices to flexible and portable devices, continues to expand, covering a wide range of high-tech and everyday life needs.

In recent years, the variety and number of investments in the DePIN market have increased significantly, with a growing number of institutions and projects. From the demand side, DePIN shows tremendous potential in multiple markets (such as weather, air quality, health, AI) and device types (such as wearables and mobile phones). The upstream and downstream industry chains are also gradually improving, including on-chain data interaction, device middleware, data, and hardware.

One noteworthy aspect is that the lifecycle of DePIN projects, due to their combination of physical devices and token design, is theoretically longer than that of non-DePIN projects. This gives the DePIN track enormous potential, making it highly attractive for investors.

Looking ahead, with the development of DePIN projects and advancements in technology, we have every reason to believe that this sector will give rise to more innovative and impactful projects. These projects will inject new vitality and possibilities into the Web3 ecosystem.

Disclaimer：

1. This article is reprinted from [PANews]. All copyrights belong to the original author [Ian, Xinwei, Severin， MT Capital]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
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