TL;DR
- DePIN is transforming physical infrastructure, previously monopolized by a handful of large corporations, into networks that are owned and operated directly by individuals and organizations, who are rewarded with tokens according to their contributions.
- Projects like Helium and Daylight are already showing real results in industries such as telecommunications, energy, AI, robotics, and healthcare, lowering entry barriers and distributing economic benefits more broadly.
- As core infrastructure like blockchain layers, wallets (WaaS), and token economies evolve, DePIN is breaking centralized monopolies and building a more fair and efficient economic system.
1. Definition and Overview of DePIN
1.1 Limitations of Existing Infrastructure Systems
Most of the physical infrastructure we use today is monopolized by a small number of large corporations due to high entry barriers. To build infrastructure such as power grids, telecom networks, and transportation systems, massive upfront capital is required, complex regulations must be cleared, and substantial technical expertise is needed. Because of this, it is difficult for new players to enter the market, and existing operators end up dominating without meaningful competitive pressure.
As this monopoly structure becomes entrenched, consumers are forced to accept high prices and unsatisfactory services. Even when infrastructure operators leverage their market power to impose unfavorable terms, users often have no alternatives and therefore no real choice.
This monopolistic structure also creates inefficiencies in operations. Centralized systems inherently have single points of failure, meaning that if something goes wrong at one location, the entire network risks paralysis. It is difficult to adjust supply and demand in real time, and the ability to respond flexibly to local conditions is limited. In the case of energy infrastructure, a significant amount of power is lost when electricity generated at large power plants is transmitted over long distances, and the failure to effectively utilize distributed energy resources is part of the same problem.
A more fundamental issue is that data and information are managed in a closed manner. The massive amount of data generated in the course of operating infrastructure can only be used exclusively by the operators; users and third parties have no access to it. This lowers the efficiency of the overall market and blocks the development of new data-driven services. Even though infrastructure has the characteristics of a public good, the value and benefits that arise from it are concentrated in the hands of a very small minority.
1.2 The Alternative DePIN Proposes
DePIN seeks to solve these problems by decentralizing ownership and operation. Instead of a centralized company owning and managing all infrastructure, countless individuals and organizations participate in the network, contribute their resources, and receive rewards in return. What makes this possible is blockchain technology and cryptocurrency tokens, with token incentives serving as the core driving force of the DePIN ecosystem.
Every participant who contributes to the network receives tokens corresponding to their contribution, and these tokens can be used within the network or traded on the market. Because the economic incentives are clear, people voluntarily participate in expanding the network.
Lowering the entry barrier is another major change. In the past, launching an infrastructure business required capital on the order of tens or hundreds of millions of dollars. In DePIN, however, an individual can contribute to the network with hardware on a scale they can personally afford. The Helium network is a good example: individuals installed hotspot devices costing only a few hundred dollars to build an IoT communication network, and together this has grown into a nationwide network. This proved that small investors can collectively build large-scale infrastructure and posed a real challenge to the traditional monopoly structure of telecom operators.
Transparency and verifiability are also key strengths of DePIN. Because all transactions and contribution records are stored on-chain, anyone can verify who contributed how much and how much reward they received. This makes data manipulation and unfair reward distribution structurally difficult, and trust between participants is guaranteed at the technological level. Since DePIN is based on open-source protocols, anyone can review the code and propose improvements, enabling a rate of innovation that can surpass closed corporate systems.
1.3 Core Operating Principles of DePIN
A DePIN network can be broadly divided into three layers. At the bottom is the physical infrastructure layer, which includes real-world hardware such as solar panels, telecom base stations, GPS sensors, servers, and batteries. These devices generate electricity, collect data, and perform computing, thereby providing the network’s actual services. The activities happening in the physical world are then relayed to the middle blockchain layer.
In the blockchain layer, participants’ contributions are verified and recorded, and rewards are automatically distributed via smart contracts. For example, suppose someone uses their solar panel to produce 1 kWh of electricity and supplies it to the grid. An oracle verifies this and records it on the blockchain. Then, a smart contract is automatically triggered and pays out a predetermined amount of tokens to that participant. The entire process is handled automatically and transparently, without human intervention. Thanks to this automated verification and reward system, the network can operate without a trusted central authority.
The top application layer is where end users access DePIN network services. From the user’s perspective, the interface looks similar to existing centralized services, but behind the scenes, a distributed infrastructure is operating. Token economy design is the key element that connects all of these layers. In the early stages, high rewards are provided to create network effects and attract participants, but as more users join and the network’s value grows, rewards can be gradually reduced while still maintaining participation. At the same time, tokens must have actual utility so that real demand is created beyond speculation; otherwise, a sustainable ecosystem cannot be built.
2. How DePIN Is Changing the Real World
2.1 Energy
The energy industry is already riding the wave of decentralization. As more households install residential solar panels, ordinary homes are becoming power producers. They can store electricity generated during the day in batteries and use it in the evening, or sell surplus power back to the grid. The idea that these individually distributed energy resources can function together like a large power plant is called a virtual power plant (VPP).
A virtual power plant is not physically located in one place. Instead, rooftop solar panels, EV chargers, small wind turbines, and home batteries generate or store power at their respective locations, and software coordinates them as one integrated system. When power demand spikes, this distributed fleet can simultaneously discharge electricity to stabilize the grid. In situations where power demand surges due to extreme weather such as heat waves or cold snaps, a network of distributed batteries can effectively replace the role of large-scale power plants.
To realize this structure, technical integration alone is not enough. Individuals also need a reason to voluntarily contribute their energy assets to the network. This is where DePIN comes in, and protocols like Daylight are putting this concept into practice. Anyone who owns solar panels or grid-connected equipment can participate in the Daylight network. Participants sell not only the electricity their equipment produces but also its operational data to power companies.
In the past, even if an individual installed solar panels, they had to go through a complex contract process with the power company, and settlement was opaque. In a DePIN protocol, however, a smart meter measures electricity production in real time, records it on-chain, and automatically pays token rewards. Participants can be rewarded simply for providing data about their devices in addition to producing electricity. For power companies, accurately understanding the real-time state of the grid and forecasting demand is a core challenge, and if they can collect data from distributed personal equipment, they can greatly reduce costs while achieving much finer-grained grid management.
The impact of DePIN on energy goes far beyond improving the way electricity is traded. The most direct effect is greater grid resilience. In a centralized system, the failure of a single large power plant can cause blackouts over a wide area. In a network composed of thousands or tens of thousands of distributed power sources, however, the system as a whole can continue functioning even if some nodes fail. This resilience becomes even more important in the era of climate change, as extreme weather events that trigger spikes in power demand become more frequent.
As homes and buildings gain the ability to generate and store their own electricity, dependence on the central grid is reduced. Local communities can form independent microgrids that maintain at least a minimum level of power supply during large-scale disasters. Economically, households become power producers, lowering their electricity bills and gaining an additional income stream. Environmentally, the expansion of distributed renewable energy naturally reduces reliance on fossil-fuel power plants, creating a structure in which individuals’ pursuit of economic benefit directly aligns with environmental protection.
2.2 Telecommunications
Telecommunications is one of the fields where DePIN has already shown some of its most visible results. Few sectors reveal the flaws of traditional infrastructure as clearly as telecom. A handful of large carriers dominate the market, forcing consumers to endure high prices, unreliable connections, and poor customer service. For a new operator to enter, it would have to invest billions in base station infrastructure, and such entry barriers have effectively blocked competition at the root.
DePIN flips this structure from the ground up. Instead of large telecom operators spending massive capital to build towers, individuals install small base stations in their homes or offices and gradually weave a network together. Each base station’s coverage area is limited, but tens of thousands of these devices can combine to cover an entire city. Participants are rewarded with tokens whenever data passes through their devices.
Helium is the project that proved this model can work in practice. It started as a low-power, long-range wireless network for IoT devices, using LoRaWAN technology, which can transmit data over long distances with minimal power—ideal for sensors and trackers. Individuals could buy hotspot devices for a few hundred dollars, install them, and nearby IoT devices would send data through these hotspots. Hotspot owners, in turn, would earn tokens.
As the network grew, Helium expanded into 5G cellular service, applying the model it had validated in IoT to general smartphone communications. The secret to Helium’s success was its clear economic model. Owners of hotspots received rewards for data transmission, for participating in network validation, and, importantly, for expanding coverage. If a hotspot was installed in an area that previously had no network, it would earn more tokens. This incentive structure caused Helium to spread geographically in a natural way, allowing it to cover not just dense urban areas but also suburbs.
Another promising DePIN opportunity in telecommunications is the home internet market. Today, most homes access the internet through fixed lines, which means telecom companies have to physically run cables from data centers to each household. Since laying cable is extremely expensive, new entrants struggle to compete, allowing incumbent telecom operators to maintain their dominance. Fixed Wireless Access (FWA) circumvents this problem by providing home internet through wireless signals instead of cables.
DePIN applies a distributed structure to this model. Instead of the telecom company installing every relay station itself, individuals install relay devices on rooftops or window ledges and get rewarded. If this approach spreads, the competitive landscape of home internet could change completely. Until now, operators that had already laid cable enjoyed a decisive advantage. But if an FWA-based DePIN network grows, new players can enter the market much more quickly. Consumers gain more choices, price competition intensifies, and rates are likely to fall. Given that telecom infrastructure is akin to a public good, such changes are not just a matter of market efficiency but also of social significance.
2.3 Transportation and Logistics
Anyone who uses food delivery apps is familiar with the pain points. Platforms often take fees exceeding 30% of the order amount, and restaurants have to surrender a large share of their revenue as platform commissions. Delivery workers suffer from low fees and have little control over their work, since jobs are allocated by opaque platform algorithms. Ride-hailing services face similar issues: platforms extract high fees between drivers and passengers, while showing limited commitment to improving service quality.
DePIN presents a way to remove these intermediary fees by creating networks that are owned and operated directly by users, rather than centrally controlled platforms. Restaurants, couriers, and customers all become participants in the network, and tokens are used to fairly reward each party’s contribution. When a courier completes a delivery, they receive tokens; restaurants own their customer data directly; and customers can be rewarded for using the app or writing reviews. In such a structure, platform fees can be significantly reduced or even eliminated.
Whereas existing delivery apps might take around 30% in fees, a DePIN-based delivery network might charge only 5–10% for maintaining the network, with the rest flowing back to participants. This allows restaurants to retain more profit, couriers to earn higher delivery fees, and customers to order food at lower prices.
In transportation, another DePIN use case is map data collection. Most maps we use today rely on databases built at great expense by large companies like Google or Naver. They operate specialized mapping vehicles or buy satellite imagery to gather map data, which means update cycles are inherently slow. It can take months for new roads or updated traffic signs to appear on maps.
DePIN shifts this process to a crowdsourced model. Thousands of drivers can install dashcams in their vehicles and upload the captured video to the network in exchange for tokens. Drone operators can upload aerial footage and get rewarded. Even cheap Bluetooth tags can be attached throughout a city, and smartphones passing by can collect their location data to help build maps. Because of this, maps can be updated far more frequently—for example, a one-way sign installed yesterday could be reflected in map data today, and suddenly closed roads could be shared in real time.
Accuracy also increases as more data points are collected. Data from hundreds of regular vehicles that pass by at different times is richer and more accurate than a single sweep from one mapping car.
The biggest transformation DePIN brings to transportation and logistics is the decentralization of infrastructure ownership. Until now, platform companies have exclusively controlled all data and networks, while participants were forced to play by platform rules. In a DePIN structure, participants become the real owners of the network. Couriers are not platform workers but co-owners of the network, and restaurants are not just tenants of a platform but shareholders in the ecosystem.
This changes business relationships at a fundamental level. Restaurants can collaboratively build and operate their own delivery network. Multiple restaurants can share delivery infrastructure, pool customer data, and reduce marketing costs. Instead of being captive to a single delivery app and paying high commissions, they can operate in a cooperative-like structure and share profits. Local, neighborhood-based networks also become possible. Restaurants and couriers in a specific district can form an independent delivery network that serves local residents. Such networks can be operated more efficiently than nationwide platforms and offer services tailored to local needs. Ultimately, DePIN aims to break the exploitative structures of platform capitalism and build a fair economic ecosystem where all participants share in the benefits.
2.4 AI
As the AI industry grows rapidly, computing resources have emerged as the biggest bottleneck. Training large-scale language models requires thousands of GPUs running for weeks, and only tech giants like OpenAI or Microsoft have such infrastructure. GPU prices have soared, making it difficult for new AI startups to even begin model development. Cloud services are an option, but the cost is often too high for sustained use.
DePIN tackles this problem by leveraging idle computing resources. There is an enormous pool of unused GPUs around the world. Gamers’ high-end graphics cards sit idle when they are not playing. Data center servers are not running at 100% capacity all the time. Many GPUs that were used for crypto mining have been abandoned as mining profitability has declined.
A decentralized computing marketplace intermediates these resources. GPU owners can provide their computing power to the network and receive tokens, while AI developers can purchase computing resources with tokens and use them as needed. Prices are determined dynamically by market supply and demand. Because the network doesn’t have to cover the massive fixed costs and margins of centralized cloud providers, it can offer computing at far lower cost, with users paying only for the resources actually consumed.
Of course, simply aggregating computing resources is not enough. For distributed GPUs to collaborate on training a single AI model, there must be sophisticated coordination and data synchronization. In traditional centralized systems, GPUs are located in the same data center and connected by high-speed networks. In a DePIN environment, GPUs are spread across the globe, introducing entirely new challenges. However, recent advances in distributed training algorithms are making efficient model training in such environments increasingly realistic.
As distributed training becomes practical, the cost structure changes fundamentally. Renting a large GPU cluster for several weeks from a centralized cloud provider might cost millions of dollars, but a DePIN network can cut that cost by half or more.
Inference can also be decentralized. When a trained AI model is used in production, the process of generating answers (inference) requires significant computing power. Instead of relying on a central server, inference can be distributed across multiple nodes in the network. Imagine operating a chatbot service: whenever a user sends a question, the model has to compute an answer. If this inference work is handled by distributed nodes in a DePIN network, service providers can reduce infrastructure costs while node operators earn rewards for performing inference tasks.
The impact of distributed computing extends beyond economic efficiency to the reconfiguration of power structures. Today, the most powerful AI models are owned by a small number of corporations that decide who can use them and how. If OpenAI cuts off API access, any service relying on that model is immediately crippled. If Google changes its policies, developers must suddenly adapt to new rules.
DePIN challenges this centralized control at its core. If model training and inference take place on a decentralized network, the network continues to function even if a particular company stops service or changes policy. Developers no longer have to fear platform lock-in and can build AI in the direction they want. When open-source models are trained and deployed over a DePIN network, no one can hold exclusive control over them, making truly open AI possible.
Scalability is also solved by market mechanisms. In centralized systems, it can take months to order and install new servers to meet surging demand. In a distributed network, rising demand naturally attracts more providers of computing resources. As token prices rise, more GPU owners have an incentive to participate in the network, leading to increased supply and stabilizing prices.
2.5 Robotics
Algorithms alone are not enough for robots to function in the real world. To teach robots how to fold clothes, do the dishes, or organize objects, vast amounts of real-world interaction data are needed—often called “embodied AI” training data. Collecting such data using traditional methods is extremely expensive and slow, because it requires experts in robotics labs to manually operate robots to gather demonstrations.
DePIN converts this process into crowdsourcing. Ordinary people can wear XR headsets and perform everyday tasks like folding laundry or washing dishes, and all of their movements are recorded as training data. The headset precisely tracks hand motions, interactions with objects, and task sequences. This data becomes the raw material that robots need to learn those same tasks. Participants earn tokens for doing ordinary household chores, and robot developers can acquire large-scale training data at much lower cost.
This approach is possible because XR technology has advanced sufficiently. Devices like Meta Quest and Apple Vision Pro have become more common, enabling precise motion tracking in everyday homes. Data generated by thousands of people performing diverse tasks in their own environments is far more varied and richer than data captured by a small group of experts in a lab.
For robots to operate in the physical world, they also have to communicate with other robots and systems. A delivery robot needing to use an elevator must communicate with the elevator system to open doors and select floors. A cleaning robot must know where the charging station is and whether it is currently in use by another robot. DePIN adds an economic layer to this: robots pay each other with tokens when exchanging data.
For example, a delivery robot that needs real-time traffic information for a specific area could pay tokens to a sensor network monitoring that area and purchase data. A cleaning robot that needs a 3D map of a building could buy it from another robot that has already scanned the building. All of these transactions occur automatically, allowing robots to obtain needed information and perform tasks without human involvement.
This structure enhances efficiency across the entire robotics ecosystem. Rather than each robot collecting all data by itself, it can purchase existing data and avoid duplication. The robot that provides data earns revenue, while the robot that buys data saves time and energy. As this cycle repeats, the overall intelligence of the network improves.
As robotics advances, demand for data will grow exponentially. Robots performing more complex tasks will need more training data covering diverse situations. Using existing methods, it is nearly impossible to gather enough data. But with DePIN-based crowdsourcing, this barrier is starting to come down. In addition to people generating data by performing tasks themselves, they can also create data by teleoperating robots. Researchers or developers can remotely control robots to demonstrate specific tasks, and those demonstrations become training data.
The accumulated data becomes an asset for the entire robotics industry. Instead of being monopolized by a single company, it can be released as open-source datasets or traded on DePIN marketplaces. Over the long term, robots may even learn from each other. When one robot learns a new task, it can upload its experience to the network. Other robots can download that knowledge and immediately acquire the same ability. As millions of robots share their experiences, the capabilities of the entire network can improve rapidly.
2.6 Healthcare
With wearable devices becoming commonplace, we are already generating enormous amounts of health data. Apple Watch records heart rate and sleep patterns; Fitbit tracks activity and caloric expenditure; continuous glucose monitors track blood sugar in real time. Yet there is a fundamental problem in how this data is owned and used. The individuals who generate the data reap almost no economic benefit from it, while platform companies monopolize the data and extract value from it.
DePIN flips this structure. Individuals directly own their health data and can choose to sell it or provide it for research in exchange for rewards. Suppose a pharmaceutical company is conducting an epidemiological study on a particular disease. It needs health data from people with that condition. Traditionally, it would have to acquire such data through hospitals or research institutions. In a DePIN network, individuals themselves can contribute their data and receive token rewards.
This is possible because blockchain can guarantee both data ownership and privacy. Personal health data is stored in encrypted form, and only the data owner controls access rights. Researchers must pay tokens and obtain explicit consent from individuals to use their data. All transactions are recorded on-chain, so it is possible to track how and where data is used.
Maintaining healthy habits is something everyone knows is important, but few manage to sustain. Resisting immediate temptations and working for long-term health requires strong willpower. Without short-term rewards, most people quickly lose motivation. DePIN healthcare networks introduce economic incentives at precisely this pain point. For example, users may receive tokens for walking 10,000 steps a day, get additional rewards for meeting recommended sleep durations, and earn even more for getting regular health check-ups.
This reward system might sound simple, but it can have a powerful impact on behavior. Gamification combined with financial incentives can turn health management from an obligation into an enjoyable, rewarding activity. Accumulated tokens can be used in various ways—for example, paying for healthcare services, receiving discounts on health-related products, or being exchanged for other cryptocurrencies or fiat. Some networks form partnerships that allow tokens to be used to get insurance premium discounts or pay for gym memberships.
From the perspective of companies or governments, such systems are attractive. As public health improves, healthcare expenditures fall, productivity rises, and the overall societal burden decreases.
The most ambitious goal of DePIN in healthcare is the decentralization of medical research itself. Clinical trials today are extremely expensive, heavily regulated, and largely the domain of big pharmaceutical companies. It typically takes over ten years and billions of dollars to develop a new drug, so treatments for rare diseases with limited market potential often go undeveloped.
The decentralized science (DeSci) movement aims to change this structure. Individuals directly participate in clinical studies, share their data, and make the research process transparent while drastically reducing costs. Participants contribute their health data and experiences to the network and are rewarded with tokens. Researchers, in turn, can obtain needed data faster and more cheaply. In traditional clinical trials, recruiting participants alone can take months. In a DePIN network, participants from around the world can voluntarily gather, dramatically accelerating research.
Data accessibility is even more important. In traditional models, clinical trial data is monopolized by the sponsoring pharmaceutical company, and other researchers cannot access it. On DeSci platforms, clinical data can be made open-source or made available to other researchers for a token fee. Once collected, data can thus be reused across many studies, dramatically improving the efficiency of medical research as a whole.
3. Infrastructure for DePIN
3.1 Blockchain Layer
Blockchain is the foundation of DePIN. It transparently records participants’ contributions, automatically distributes rewards, and provides a trust system that no one can arbitrarily tamper with. However, not every blockchain is suitable for DePIN. Operating physical infrastructure requires handling a large volume of transactions in real time, which is impossible on slow and expensive networks like Bitcoin or early Ethereum.
For this reason, DePIN projects typically choose high-throughput, low-cost blockchains. Chains such as Solana, Polygon, and Avalanche are popular because they can process thousands of transactions per second while keeping fees to just a few cents. In Helium’s case, it initially built its own chain and later migrated to Solana to secure both performance and ecosystem connectivity. Layer 2 solutions are also gaining attention. Building DePIN projects on L2s like Optimism or Arbitrum makes it possible to leverage Ethereum’s liquidity and security while achieving practical performance.
Choosing a blockchain is not only a technical performance decision. The choice of chain also affects which users are accessible and which DeFi protocols and services can be integrated. For example, Ethereum-based projects can connect to the largest DeFi ecosystem but must tolerate higher gas fees. Solana-based projects enjoy faster speeds and lower costs but start in a relatively smaller ecosystem. Each DePIN project must therefore choose infrastructure that fits its characteristics and goals, striking a balance between technical constraints and ecosystem advantages.
3.2 Wallet Layer
To participate in a DePIN network, users need a wallet. A wallet is not just a place to store tokens; it is the gateway for interacting with the network. Users register hardware, prove their contributions, and receive rewards through the wallet. However, traditional crypto wallets are far too complicated for mainstream users. They must securely store 12- or 24-word seed phrases, understand concepts like gas fees, and troubleshoot failed transactions on their own. For DePIN to reach mass adoption, this complexity must be removed, making user experience critical.
This is where Wallet-as-a-Service (WaaS) comes in. WaaS abstracts away the complexity of wallet management and offers it as a service, allowing users to interact with the network as easily as with a normal app. A user can simply sign up with an email and password, while the WaaS provider creates and manages the wallet in the background. The reason Helium was able to attract tens of thousands of participants was that users could easily create wallets and register hotspots through a mobile app.
WaaS providers may manage private keys in a centralized manner or use techniques such as Multi-Party Computation (MPC) to distribute key storage, pursuing both security and convenience.
The most decisive moment is the very beginning. If users fail to see value in the first few minutes after installing an app and signing up, most will churn. That is why many projects provide immediate gratification: a small token airdrop upon signup or rewards for completing a tutorial. They also try to hide blockchain jargon as much as possible—using familiar terms like “Pay” instead of “Send Transaction,” or “Register” instead of “Execute Smart Contract”—and automatically handle gas fees in the background. Ultimately, the mass adoption of DePIN is less about technology itself and more about how well the technology is hidden from users.
3.3 Token Economy Design
The token economy is the heart of DePIN. No matter how advanced the infrastructure, the ecosystem will collapse if the economic incentives that keep participants contributing are poorly designed. In the early stages, high rewards are necessary to attract participants, but over time, token issuance must be reduced and the system must transition to real revenue models. If this transition fails, token prices can crash, participants can leave, and the network can fall into a death spiral.
Successful token economies tend to follow a few principles. First, tokens must have real utility. It is not enough that they are merely distributed as rewards. Tokens should be required to use network services or participate in governance. Second, supply should be predictable. If a large amount of tokens suddenly hits the market, prices can collapse. Vesting and gradual issuance mechanisms are used to control supply. Third, network growth and token value must be linked. As the number of participants and usage increase, token demand must also rise.
In the early stages, inflationary rewards are essential. When the network has no real revenue yet, newly issued tokens must be used to compensate participants. However, such rewards cannot continue indefinitely. As the network grows and real users begin paying for services, this revenue can be shared with participants. Token-burning mechanisms are also important. If tokens are burned whenever network services are used, supply shrinks, creating upward pressure on token prices. Balancing supply and demand in this way is key to a stable token economy.
3.4 Hardware Deployment and Management
DePIN is not just a digital network; it is physical infrastructure. Real hardware such as solar panels, telecom base stations, GPS sensors, and servers must exist for the network to function. The most common model is for participants to purchase and install hardware themselves. In Helium’s case, individuals buy hotspot devices and install them at home. From that moment, they begin contributing to the network and receiving tokens. The advantage of this model is that, because participants invest in the assets themselves, they have a strong incentive to maintain the devices properly and place them in optimal locations.
Standardization and management of hardware is another key challenge. Allowing everyone to use any device they want increases flexibility but makes quality control difficult and can lead to inconsistent network performance. Restricting participation to specific hardware ensures consistent quality, but creates dependence on particular suppliers and limits participant choice. Most projects seek a balance by defining minimum specifications and allowing devices from various manufacturers that meet those criteria.
Remote management systems are also essential. When thousands or tens of thousands of devices are distributed across the globe, operators must be able to monitor the status of each device and respond quickly when problems occur. They need systems for pushing software updates remotely, tracking performance in real time, and detecting and blocking abnormal behavior. Without robust infrastructure management tools, network quality suffers and participants’ experiences deteriorate.
3.5 Oracles and Data Verification
Blockchains cannot inherently access external reality. They do not know whether a solar panel actually generated electricity, whether a courier completed a delivery, or whether a GPS sensor is reporting accurate locations. Oracles are responsible for bringing this real-world data onto the blockchain. In DePIN, oracles are particularly critical because rewards depend on verifying that participants actually contributed. If rewards were given without verification, people could submit fake data to siphon off tokens.
Verification methods vary by project. Helium, for example, uses a Proof-of-Coverage system in which hotspots exchange wireless signals to verify that neighboring hotspots are genuinely operating. When one hotspot transmits a signal, nearby hotspots must prove they received it before rewards are released. In IoT sensor networks, data from multiple sensors may be cross-checked. If one sensor reports an anomalous value, its reading can be compared against data from nearby sensors.
Decentralized oracle networks are also emerging. Projects like Chainlink have multiple independent nodes collect the same data and then determine a final value via consensus. Even if one or two nodes provide incorrect data, the correct value can be obtained if the majority report accurate data. Oracle providers also stake tokens and can lose their stake if they deliver bad data, giving them economic incentives to behave honestly.
3.6 Incentive Mechanisms
For a DePIN network to grow, participants must have ongoing reasons to contribute. Simply distributing tokens is not enough; rewards must be differentiated according to the type and value of contributions. The most basic incentive is usage-based rewards. The more data flows through a user’s hardware or the more services it provides, the more tokens they earn. While intuitive and seemingly fair, this can create a problem: hardware may become concentrated only in high-demand areas, leaving low-demand regions underserved.
To address this, many projects introduce geographic incentives. They pay bonuses for installing hardware in regions that have little or no coverage. Helium, for example, reduces rewards in areas that already have many hotspots and increases rewards in under-served regions to encourage even geographic distribution. Quality-based rewards are also important. Nodes with high uptime, fast response times, and accurate data should receive more tokens, encouraging participants to maintain their hardware well.
Some networks adopt reputation systems. Nodes that operate reliably over long periods build up trust scores. Nodes with high trust scores are assigned more tasks and receive higher rewards. This setup makes it more advantageous for participants to focus on long-term, stable contributions rather than chasing short-term gains. Ultimately, effective incentive mechanisms do more than simply distribute rewards; they naturally guide participants toward behaviors that align with the network’s goals.
3.7 Governance Structures
Who runs a DePIN network? If a centralized company makes all decisions, the meaning of DePIN is diminished. Yet a completely leaderless system can be highly inefficient. In practice, most projects are initially led by a core team. When the network is small and unstable, fast decision-making and deep technical expertise are needed. As it grows, authority is gradually transferred to the community, often via a DAO (Decentralized Autonomous Organization) structure where token holders propose and vote on decisions.
Governance topics span many areas: how to adjust reward structures, which new features to add, whether to form partnerships, and how to manage token issuance. Voting power is usually proportional to token holdings, based on the logic that those who have invested more in the network should have a greater say. However, this approach has its own problems. A small group of large holders can effectively control decisions, and ordinary participants may be apathetic, resulting in low voter turnout.
To mitigate this, some projects implement delegated voting systems. Participants can delegate their voting power to trusted individuals who vote on their behalf. This allows knowledgeable, engaged members to participate more actively in governance, while ordinary users do not have to spend time on complex decision-making. Effective governance ultimately means striking the right balance between decentralization and efficiency—an area that DePIN projects will need to continue experimenting with and refining.
4. Future Prospects of DePIN
DePIN is still in its early stages but is already producing tangible results in several industries. Helium is challenging traditional telecom carriers with an IoT network built by tens of thousands of participants. Daylight is demonstrating the potential of decentralized energy markets. Distributed computing marketplaces are accelerating the democratization of AI development. As these success stories accumulate, more industries are beginning to experiment with DePIN models. The potential application areas are vast, spanning logistics, agriculture, manufacturing, and even space.
However, significant hurdles remain. Regulatory uncertainty is one of the biggest. It is still unclear how governments will classify and regulate DePIN. In highly regulated sectors like telecommunications and energy, DePIN may clash with existing laws. There are also unresolved technical challenges. For distributed systems to match the speed and stability of centralized ones, further improvements are needed. User experience must continue to improve for DePIN to be adopted by the mainstream. Above all, achieving strong network effects is critical: projects must successfully attract early participants, keep them engaged, and transition to sustainable revenue models.
In the long run, DePIN has the potential to fundamentally change how physical infrastructure is owned and operated. Infrastructure that used to be monopolized by a small number of large corporations could be transformed into distributed networks owned and operated by millions of individuals. This would distribute economic benefits more broadly, intensify market competition, and improve service quality. Most importantly, individuals would gain direct control over their assets and data, along with the value created from them.
This is not merely a technological shift but a transformation of the economic system itself. DePIN will not replace every industry, but in areas where centralized monopolies create inefficiencies, it can offer a powerful alternative. Ultimately, the future of DePIN depends less on how fast the technology advances and more on how widely people embrace and participate in this new model.
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