The Hottest Topic At ETH Denver Wasn’t DeFi This Year

DePIN, an emergent crypto sector, is coming for the real world

By: André Beganski

March 8, 2024

DeFi’s lead as the hottest thing in crypto didn’t last long.

An emergent crypto sector known as DePIN, short for decentralized physical infrastructure networks, attracted significant buzz at ETH Denver in Colorado this year — yet its projects have little to do with catering to Web3’s established artists, degens, or developers.

In lieu of tapping crypto’s current crowds, DePIN’s focus is on taking inefficient industries and making them more efficient through decentralization, according to Akash Network co-founder and OverClock Labs CEO Greg Osuri. The goal is to disrupt areas that already have broad appeal — and think outside the blockchain in terms of Web3’s new users.

“Crypto is starting to go mainstream and DePIN, by all means, is positioned very well to capture the mainstream audience that DeFi could not,” Osuri said. “DeFi targets a very niche [group of] financial experts and not traditional mom-and-pop shops or grandmothers.”

Getting the elderly into crypto may sound like a tumultuous ordeal, considering the technical complexity and pitfalls associated with the digital assets. But as a backbone underpinning networks for daily-life devices they may use, blockchain tech could become more palatable for the masses, advocates said: sprinkle in the right token-based incentives, and a service or product is primed for success.

Speaking on a panel at the annual Ethereum conference this year, Osuri shed expertise on the growth of artificial intelligence and how blockchain-based marketplaces can broaden access to high-powered GPUs. Many of Akash’s users “do not have experience with crypto,” Osouri said, and they’re tapping the service for the purpose of machine learning.

Not that long ago, the DePIN label didn’t exist. The term only solidified this year, but projects have looked to pioneer real-world applications for blockchain tech since projects, such as the InterPlanetary File System (IPFS), were founded in 2009. However, the computational strain associated with AI’s explosion has sparked a renewed focus, Osuri said.

“There is a lot of compute — be it CPU power, GPU power, storage power, [or] bandwidth power — all around us, while the costs of these resources are increasing because they're gate kept by a few companies,” he said. “DePIN is excellent at removing these gatekeepers.”

In the case of Akash, it would appear the market is somewhat sympathetic toward its disruptive ambitions. Akash’s native token has increased nearly 1400% over the past year, according to CoinMarketCap data, rising to $5.92 from $0.36 in that period of time.

Akash allows GPU owners to rent out computational power like a digital equivalent to Airbnb, but other projects have settled into lanes of their own. A common name among DePIN’s backers is Helium Mobile, a wireless phone service created by Nova Labs, and Filecoin, a decentralized network for storing and retrieving data. Filecoin launched in 2014, yet the emerging narrative around DePIN has pushed the project back toward crypto’s forefront.

“Crypto people are very good at creating these acronyms to describe something that already exists in a more sexy way,” said ​​Aaron Stanley, head of special projects at the Filecoin Foundation. “But with DePIN, I really think it was the growth of artificial intelligence … more people have had the lightbulb moment.”

The Filecoin Foundation estimates that the storage network hosts around 2 billion gigabytes of data across nearly 3,000 different so-called Storage Provider systems. In a recent blog post, it also said that as many as 700 organizations actively use Filecoin for storing and retrieving data today. Still, the bar is high for any DePIN project, Stanley said.

“The journalist in me is also a little skeptical of the DePIN narrative,” Stanley, a former CoinDesk reporter, acknowledged. “We need to get [solutions] to the point where they're at least as good as the existing alternatives.”

In order for DePIN projects to truly become successful, developers will likely need to offer solutions that are “at least on par” with their Web2 equivalents, he explained. And that can present challenges when it comes to courting enterprise clients who have high expectations and are putting themselves out there by even suggesting to “use this weird token, blockchain thing that [they maybe] heard about at a conference,” he said.

But whether it’s monetizing data gathered from moving vehicles or creating decentralized power grids that reward solar panel owners, a broad landscape of projects attempting novel things exists today, said Jing Sun, co-founder of the Web3 platform IoTeX. Rewarding users with tokens for supporting infrastructure has broad appeal too, she added.

“Even my parents, they can easily understand that, and they can easily participate in the Web3 economy,” she said. “They become the contributor as well as the beneficiary.”

IoTex’s network is designed to connect smart devices to decentralized applications, and — not only has Sun seen DePIN’s rise as a term — the sector’s growing enthusiasm has been reflected in IoTeX’s in-person events. One initiative called R3al World at Denver, which gives investors and developers a space to connect, was quite busy this year, she said.

“Last year, when we decided to do this event, it was actually hard to find different use cases. We only found 20-something projects, and [it was] small scale,” she said. “This year we hosted another R3al World event … Hundreds of different projects came to showcase.”


View All