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Ask CryptoVantage: What is DePIN? Crypto + Physical World

Several crypto hype cycles have come and gone or died down. From massively popular blockchain games to NFTs, several trends have defined the evolution of the space. And now, experts think that another concept is the next relevant innovation for Web3: decentralized physical infrastructure networks (DePIN). 

Industry observers are praising DePIN as the first true application of cryptocurrencies. The New York Times called one application for the concept the first crypto project that has “normie utility” — meaning one that solves problems outside the esoteric world of crypto speculation culture. 

Are decentralized physical infrastructure networks the next frontier for crypto? 

What is DePIN (Decentralized Physical Infrastructure Networks)

Demystifying Decentralized Physical Infrastructure Networks

DePIN, short for Decentralized Peer-to-Peer Infrastructure Networks, is a crypto niche comprising blockchain projects or other P2P protocols.

DePIN programs incentivize users to participate in the ecosystem by rewarding them with crypto tokens, which they can use for payments within the network or trade for fiat or other cryptocurrencies. Such participation entails users plugging in their real-life devices — that is, physical infrastructure, to the network.

DePIN is not a new concept. It’s been around for years under different names, such as EdgeFi, Proof of Physical Work (PoPw), and Token Incentivized Physical Networks (TIPIN). Different publications have used different names when discussing the phenomenon.

But last November, leading blockchain data analytics and research firm Messari settled on DePIN after conducting a Twitter poll where most users voted in its favor.

Messari has become the leading voice in constructing knowledge around DePIN, characterizing it as “a rapidly growing sector that taps into existing, real-world, non-speculative demand sources.”

According to the company, the year-to-date growth in market value for top DePIN protocols has resulted in a total market cap of over $12 billion, reflecting a growth of 42%.

The standout feature of DePIN is its incentivization mechanism, which encourages communities to participate in the network. The more users join the network, the more secure and resilient it is against attacks.

DePIN can be deployed for a wide range of applications, from WiFi networks to sensors, energy systems, storage systems, and financial systems.

Examples of Decentralized Physical Infrastructure Networks

There are dozens of DePIN projects with varying degrees of success. Here are three of the top DePIN projects:


Although the project’s squeaky clean image was marred after a Forbes investigation alleged corrupt behavior, we include Helium on this list for being a pioneer and one of the finest examples of a Decentralized Physical Infrastructure Network.

Also called the “People’s Network,” Helium allows users worldwide to connect to a decentralized WiFi network through hotspots or nodes known as Helium hot spots.

Over 500,000 hot spots had signed up for the network one year ago, with thousands joining every day. To start earning HNT, all you need to do is set up a node and start providing coverage.


Launched in 2014, Filecoin is a decentralized, P2P network that incentivizes users to supply storage space to other users and earn crypto in the form of Filecoin (FIL) tokens.

The Filecoin network employs proof-of-replication (PoRep) and proof-of-spacetime (PoST) consensus mechanisms for nodes to prove they are storing and providing access to storage space in exchange for FIL.

Filecoin, which is built on the InterPlanetary File System (IPFS), aims to provide a safer and cheaper alternative to legacy cloud storage solutions such as Amazon Web Services and Google Cloud.


This is one of the most exciting applications of DePIN. DIMO is a Drive-to-Earn application that lets drivers gather and share their vehicle data. Drivers can join the network using a DIMO-approved device or a smartphone. Once connected and moving, they can share data with the open P2P network and start earning $DIMO tokens.

Also, they can receive helpful information on vehicle diagnostics, such as fuel efficiency, engine health, battery life, and more. A wide range of developers could leverage the DIMO network, such as:

  • Decentralized car insurance apps devs
  • Traffic monitoring and planning apps devs
  • Smart city planning (Such devs could use data on DIMO to help streamline traffic and reduce congestion)
  • Ride-sharing and carpooling apps devs

It’s not just app developers who stand to benefit from DIMO’s data-sharing capabilities but also other parties, such as car parts manufacturers.

Pros and Cons of Decentralized Physical Infrastructure Networks

While DePIN is undoubtedly a game changer for crypto, it’s still a relatively new frontier and is far from perfect. Here’s a rundown of its upsides and downsides.


  1. Cutting costs: DePIN can reduce the costs of building and maintaining centralized mortar and brick buildings.
  2. Increased security: DePIN networks are infinitely more secure than centralized networks because they remove a single point of failure
  3. Expanding access: DePIN networks allow a wider pool of users from everywhere to plug into the ecosystem, even in areas where centralized infrastructure is not available or too expensive to build
  4. Community-driven: Unlike centralized networks, DePIN networks are developed and maintained by communities of users, creating a more democratic decision-making environ
  5. Transparency: Decentralized physical infrastructure networks are radically transparent as transactions are recorded on a public ledger that everyone can see, reducing the potential for fraud or corruption.


  1. Technical sophistication: For beginners, setting up a DePIN device can be daunting and may require some time to get the hang of it
  2. Interoperability challenges: DePIN protocols can struggle to interoperate with existing systems that have different protocols and standards
  3. Potential for abuse: Decentralized physical infrastructure networks can be an easy target for abuse, as evidenced in Filecoin’s case

Closing Thoughts: Waiting for a Killer App

Decentralized physical infrastructure networks are the next big thing in cryptocurrency applications. Coming out of a space that’s often received flak for being solely profit-driven, it’s refreshing to see such innovative applications demonstrating that crypto has much more to offer.

It will be exciting to watch where DePIN goes from here.

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Hope Mutie

About the Author

Hope Mutie

Hope Mutie is a professional writer and editor whose interests include fintech, cryptocurrency, and blockchain. She engages with crypto audiences by curating content that’s fun-to-read, educational, and offers unmatched value. Hope is part of the brilliant team at Go Full Crypto – a podcast and service that enables your transition into crypto.

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