A new era in crypto and DeFi is rapidly evolving. When the growing influence of blockchain technology is combined with the rapid development of globalized information technology, a whole new playing field is unveiled. This is DePIN (Decentralized Physical Infrastructure Network). The concept of DePin is now a hot topic among crypto enthusiasts, promising a revolution in decentralized physical infrastructure.
How can DePIN benefit your startup? The main benefits of using DePIN in startups are rapid scale, neutrality with credibility, collective ownership, and frictionless payments. At IdeaSoft, we noticed trend about using this technology and how to create a blockchain application to succeed. We expect a wider adoption of the DePIN concept in the coming years, and that is why we aim to shed light on DePIN applications and the benefits of DePIN.
Table of Contents:
- Conceptual Understanding of DePIN
- Physical Resource Networks vs. Digital Resource Networks
- How DePINs Transform Web3?
- What are the disadvantages of DePIN?
- Examples of DePIN Projects
- Future DePIN Applications
- Conclusion
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Conceptual Understanding of DePIN
What is DePIN in crypto? DePINs, or Decentralized Physical Infrastructure Networks, are networks that use token incentives to motivate individuals to share their resources. This sharing of resources covers a wide range of areas, including storage, communications traffic, cloud computing, energy, etc. DePINs have transformed infrastructure provision by centralized enterprises into a form of crowdsourcing that involves users worldwide.
Why do we need DePIN? The answer to this question relates to the limitations of the current ICT (Information and Communications Technology) infrastructure. DePIN provides decentralized infrastructure and the possibility to address different limitations.
Our clients often ask us, “What are decentralized physical infrastructure networks (DePIN)?” When explaining, we mention that the term DePIN was first promoted and emphasized in the report of the investment research institute Messari. It set up DePIN-related statistics. This fact is important.
Ethereum is known as the main chain for DePIN projects, but Solana is also starting to take the position here. The market is currently dominated by leaders such as Filecoin, Render Network, Theta Network, Arweave, and Akash Network. Developers often explore Ethereum and Binance for DEX to leverage their advanced functionalities and ecosystem support for DePIN initiatives.
How does DePIN work?
Let’s explore how DePIN works. DePIN uses a token economy model to incentivize users to provide resources, including GPU power, hotspots, storage space, etc. In the early days of DePIN, tokens often had no real value, so users engaged in a behavior similar to that of venture capitalists. They invested in bullish DePIN projects, becoming “risk miners” and reaping the benefits of increased token acquisition and token price appreciation.
Modern DePIN projects have the following goals:
- Attracting supply-side participants through tokens. Adopting a well-established token economy model attracts early participants to contribute to the network construction and provide resources. They are rewarded with tokens in return.
- Attract consumers. As resource providers grow, some developers join the ecosystem to create products. Consumers are also attracted to DePIN once the provider can offer certain services at a lower price compared to centralized infrastructures.
- Positive feedback. As the number of users increases, this demand motivates supply-side participants with higher revenues, creating a positive feedback loop. It attracts more participation from both supply and demand.
Early projects in the DePIN space focused on storage and communication technologies, such as decentralized network Helium (2013), decentralized storage Storj (2014), and Sia (2015). With the development of the Internet, Internet of Things (IoT), and Artificial Intelligence (AI), the focus of DePIN innovations has expanded to include computing, storage, communication technologies, and data collection and sharing.
Physical Resource Networks vs. Digital Resource Networks
What is a decentralized network? We have prepared a comparison table to help you understand the difference between physical resource networks vs. digital resource networks. After it, the concept of the decentralized physical infrastructure networks will become more understandable for you.
| Physical Resource Networks | Digital Resource Networks | |
| Accessibility | Limited by geographical constraints; physical presence is often required for maintenance and operation. | Accessible globally, allowing remote management and utilization of resources. |
| Scalability | Expanding physical networks often involves significant time and cost investment in acquiring new assets and infrastructure. | Easily scalable by adding or adjusting virtual resources, offering greater flexibility and cost-effectiveness. |
| Maintenance | Regular maintenance and repair are necessary for physical components, with potential downtime during maintenance activities. | Maintenance involves software updates and digital security measures, with minimal impact on ongoing operations. |
| Resource Duplication | Physical assets must be replicated for redundancy, leading to higher costs and resource consumption. | Digital resources can be duplicated or backed up more efficiently, reducing costs and improving resilience. |
| Cost | Initial setup costs are typically higher due to the purchase of physical assets and infrastructure. | Initial setup costs are generally lower, but ongoing operational costs may include software licenses and cloud services. |
| Flexibility | Limited flexibility in reconfiguring physical networks, often requiring significant time and investment. | Highly flexible, allowing quick adjustments to resource allocation, configuration, and adaptation to changing requirements. |
| Security | Physical security measures are crucial to protect assets, and breaches can have significant consequences. | Digital security measures, such as encryption and cybersecurity protocols, are essential to safeguard data and systems. |
| Lifespan | Physical assets have a finite lifespan and may become obsolete over time, requiring regular upgrades. | Digital resources can have a longer lifespan, with the potential for updates and upgrades to extend functionality. |
The comparison table provides a general overview, and specific cases may vary based on the industry, context, and technology advancements. If you want to develop your own innovative Web3 application, we have many articles in our blog on how to create a Web 3.0 app, or you can contact us, and we will consult you regarding your ideas.
How DePINs Transform Web3
DePIN Web3 emerges as a solution to address critical challenges within the Web3 ecosystem, particularly the bottleneck associated with centralized infrastructure. This decentralized model can reduce the strain on any single point of failure, fostering a more robust and adaptable infrastructure for decentralized applications (dApps).
DePINs play a pivotal role in facilitating the creation of applications that require physical infrastructure support. These applications often demand significant computing power, storage, and bandwidth. DePIN in Web3 provides a decentralized network of resources that developers can tap into, offering improved resource availability.
Furthermore, the global accessibility of Web3 stands to benefit from DePINs. In regions with limited access to traditional centralized infrastructure, these decentralized systems allow the widespread adoption of innovative technologies. DePIN infrastructure contributes to a more globally accessible Web3, empowering users worldwide to engage with and leverage decentralized technologies. The benefits of DePIN are huge.
What are the disadvantages of DePIN?
Firms that want to embrace DePIN also have to look at the challenges of DePIN. These are not reasons to avoid DePIN, but spaces where careful planning and professional-grade engineering are used.
Fragmented Governance and Coordination
Decentralization distributes control, one of the assets of DePIN, but also makes decision-making more difficult. Challenges:
- Slow consensus. Tons or thousands of contributors needing to vote on proposal results in upgrades taking weeks.
- Conflicting incentives. Node operators would personally favor short-term rewards over network health, leading to gridlock.
- Fork risks. Chain splits tear the ecosystem apart when there are disagreements.
IdeaSoft addresses this by building robust governance frameworks (e.g., DAO-based, weighted vote, or council architectures) that decentralize and yet are flexible. We then utilize automated governance tooling to speed up those decisions that have to be made under urgency without diminishing community participation.
Regulatory Uncertainty
DePIN operates in a law gray space, especially when token incentivizations and user information are involved. Challenges:
- Compliance issues. Incentivization models can trigger securities regulations or telecom licensing obligations.
- Jurisdictional complexity. Global participation means that the network could be under multiple regulatory regimes at once.
- Shifting rules. Data privacy, token issuance, and infrastructure ownership regulations are changing fast.
Our legal-tech vision includes KYC/AML modules, jurisdictional tokenomics, and compliance reporting dashboards. With inbuilt regulatory safeguards from day one, we reduce the risk of shutdown or fines.
Scalability and Performance Issues
DePIN solutions will likely use blockchain transactions to record contributions, rewards, or service usage. This adds performance bottlenecks:
- Throughput constraints. Public blockchains barely support sufficient transactions per second for real-time data (e.g., IoT devices emitting streaming telemetry).
- High fees. Network congestion can make microtransactions expensive, deterring user participation.
- Latency. Multi-step smart contract calls can slow user interactions.
IdeaSoft engineers meet this with multi-layered architectures — combining L1 smart contracts for security with L2 rollups or off-chain computation for performance. We also use caching, batching, and light-weight consensus mechanisms to keep costs predictable.
User Experience (UX) Complexity
Decentralization introduces friction for end users:
- Wallet onboarding. Wallet initialization, private key handling, and payment of gas are all vexing to most users.
- Technical jargon. “Staking”, “slashing”, and “governance proposals” befuddle non-crypto-native participants.
- Bad incentives. Where reward systems are vague, users may lose motivation to engage.
We build seamless onboarding experiences with hybrid or custodial wallets, fiat ramps, and guided tours. Gamified dashboards show live incentives, encouraging frequent use.
Security and Data Integrity Risks
As DePIN distributes control to many nodes, security issues are always present:
- Bad nodes. Malicious actors can attempt to provide counterfeit data or scam on rewards.
- Sybil attacks. Multiple imposter nodes can break consensus if identity systems are violated.
- Data tampering. Without authentication, users will question the integrity of network data.
IdeaSoft implements cryptographic proofs of data, decentralized identity systems (DID), and slashing penalties that fine malicious actors. Real-time monitoring and anomaly detection also secure network integrity.
Examples of DePIN Projects
Here are 4 prime examples of DePIN crypto projects.
Filecoin & Arweave – The Leaders in Decentralized Storage
Filecoin and Arweave are redefining how data is stored. Filecoin drives distributed storage through token incentives based on the IPFS protocol, and Arweave provides a permanent storage solution. These innovations reduce the cost of storage and improve data security and reliability.
Helium – Leading the Way in Decentralized Wireless Networking
Helium is a pioneer in decentralized wireless networks, engaging users to build the Internet of Things (IoT) through token incentives. With significant progress in the IoT space and challenges in the 5G and WiFi markets, Helium’s success lies in its effective use of decentralized technology to solve the problem of high IoT infrastructure costs.
Render Network – The Rising Star of Decentralized Computing
The Render Network, a decentralized GPU rendering platform, provides a new image and animation rendering solution. The network effectively matches GPU supply and demand through a multi-tiered pricing strategy while facilitating the reuse of idle GPU resources, providing customers with a more affordable rendering option.
Theta Network – The Innovator of Decentralized Streaming Media
Theta Network leverages decentralized technology to optimize content delivery, lowering the cost and increasing the efficiency of image delivery. Theta Network features users contributing bandwidth and computing power as part of the video delivery, providing users with a better video viewing experience.
io.net – GPU Compute for AI Workloads
Spotlight of 2025, io.net is focused on decentralized provisioning of GPUs to help with AI and machine learning workloads. Users and data centers can lease out their idle GPU capacity. Based on Solana (to leverage high-throughput, low-cost), io.net has support for integration with AI frameworks and real-time compute scaling. It’s also a Web3-native alternative to cloud GPUs, which aligns perfectly with the vision of DePIN for shared access to resources.
DAWN – Decentralized Internet Infrastructure
One other such 2025 player worth mentioning is DAWN, developing a decentralized internet backbone using hardware termed “Black Box” nodes. Concept: allow communities to maintain their own Internet access points with token incentives, eliminating the focus on ISPs. Early pilots are designed in major cities, and the project supposedly ties in tightly with Helium’s infrastructure. Pushing not just wireless connectivity but real internet backhaul posits the next step of DePIN evolution.
Neuron – DePIN for Drone & M2M Communication
Neuron (also known as Neuron Innovations) has begun positioning itself as a DePIN player for machine-to-machine (M2M) communication and drone infrastructure. The project uses blockchain and AI to enable instant sharing of data in low-altitude airspace, saving high-frequency sensor data to a ledger (in partnership with Hedera) to enable traceability and safe coordination. With drone, automation, and IoT trends, such a physically embedded DePIN niche is a powerful signal about how far DePIN can reach.
Future DePIN Applications
The development of the DePIN domain has revealed many advantages, such as increasing resource efficiency, reducing costs, and increasing market transparency. At the same time, it also faces technical, market, and regulatory challenges. These challenges include improving the user experience, maintaining a competitive advantage, and complying with regulatory requirements.
The future of the DePIN space is full of opportunities and challenges. With technological advances and increased market awareness, these innovations are expected to address current challenges and revolutionize data storage, computing, and image delivery. Looking ahead, DePIN infrastructure has the potential to become a key infrastructure to support the digital economy, bringing real value to society, businesses, and individuals.
DePIN use cases are diverse, from WiFi to data storage and transportation. A great example is the global map of the Helium (IoT) network, which is updated every 30 minutes. It shows extensive use.
With DePIN, people can use WiFi, transportation services, storage, IoT infrastructure, data, maps, and so on while earning rewards. This is not just about trend growth but also about driving mass crypto adoption. This trend promises a major transformation in how we interact with technology and infrastructure daily.
Conclusion
Now, you have an answer to the question ”What is DePIN?” It is not just a trend in the crypto world but a step forward in integrating blockchain into our daily lives. With its potential yet to be fully tapped, the future of DePIN looks bright, opening up new opportunities in the crypto world.
DePIN is not something new in the crypto market. At IdeaSoft, we possess vast experience working with such projects and are glad that trends are returning. If you want to implement the DePIN technology, we are ready to help you with this venture!
