What is DePIN?
Introducing Decentralized Physical Infrastructure
TLDR; DePIN is a thriving area within Web3 that combines tokens with hardware. The term refers to projects that have an infrastructure component, where the token obtains it’s value from the used of the infrastructure. Our infrastructure is sensors and the value proposition is data.
NB: Nothing in the below is investment advice.
When you work in any area for a long enough time, the jargon becomes part of your thinking, and you forget what it is like to be a beginner. The world of Web3 is like that. Insider terms like decentralized, self-sovereign, tokenomics, and staking can be a little overwhelming for beginners.
A good writer can introduce the audience to their world by degrees, uncovering a little more with each page. So today, we need to teach you about DePIN.
Decentralized Physical Infrastructure
DePIN is a phrase used in Web3 to describe hardware networks connected to a token-based reward. It is that simple. An infrastructure provider is a node or member in the network, and the provider sells a service to the network: the infrastructure in exchange for a network reward.
Of course, the original DePIN network was Bitcoin. Still, nobody thinks about it that way now. Other examples like the Helium Network for wireless communications and Arweave or Filecoin for decentralized storage are categorized as DePIN more regularly.
“The key idea in a DePIN network is that the network rewards participants (infrastructure providers) with a native token.”
The key idea in a DePIN network is that the network rewards participants (infrastructure providers) with a native token. The services offered by the network are paid for in the token, and the network typically has a ledger for recording the use of its services. As the service is consumed, the network charges transaction costs and (hopefully fair) usage costs, which are denominated in the native token. Generally, at the early stage of a network’s development service providers are heavily incentivized to add capacity to the network with higher than expected rewards offerings. Think of it as the early adopter's bounty.
What does that have to do with Earthstream?
Monitoring biodiversity is a big deal and will take cooperation, reporting, and resource allocation. Handling the reporting side of biodiversity systems is a network job. So, when we say we are a DePIN startup, we mean that we’re building a network of sensors that can monitor biodiversity.
Earthstream is building a DePIN network that sends data to the blockchain: People who collect the data on behalf of the network are sensor owners; sensor owners receive rewards for working with us. We process the data with AI so that 3rd parties: funders, governments, certifiers, credit markets, and NGOs can use the data effectively. The value of the network comes from “biodiversity data” collected by the network.
It’s a bit like the mycelium…
