DePIN stands for Decentralized Physical Infrastructure Network.
A DePIN is typically a web3 project where a group of founders tender an idea to a larger community:
If everyone in the community, which can be global, deploys a node that somehow services a local physical environment, the resulting network will have far more value than if any one member deployed nodes on their own.
Nodes can be anything from a LoRaWAN radio to a small cell antenna to a device that tracks automobile statistics like gas mileage, engine efficiency, or tire pressure.
Each node provides some kind of service, whether it’s wireless coverage, a data stream from a vehicle, environmental information, etc.
Nodes are rewarded for their service with cryptocurrency tokens issued and tracked using a blockchain.
The blockchain will typically also monitor aspects of the nodes, usually focusing on ensuring the data is “real”, and of high quality.
The service is sold to third parties, and that value is distributed back to the network in the form of tokens.
Now, in the beginning I said “a DePIN is typically a web3 project”. It’s not always, and the idea of a decentralized network isn’t necessarily that new. McDonald’s is a DePIN. Multiple owners each run their own service according to a tightly controlled set of rules.
Each node contributes value back into the network, and each node receives value in return, all without a lick of web3 or cryptocurrency in sight.
It’s something to think about, and it can make ya scratch your head: Did we really just re-invent McDonald’s for IoT?
Not exactly, as McDonald’s isn’t a “Franchisee-owned franchise”, which is much closer to what a DePIN is. Still, the franchise model can be helpful as a way to understand some of the opportunities and challenges in a DePIN.
This definition and explanation ignores or glosses over multiple important and detailed aspects of a DePIN, including but not limited to how data streams from different nodes are valued, how token emissions are structured (going to node owners who are known as “miners”, the core team, investors, etc), and how the project is governed, among others.
There is no publicly proven method that guarantees success with a DePIN project.