DePIN in Cryptocurrency: Meaning and Best Projects

Cryptocurrency and its technologies are becoming more and more integrated into the real sector every year. One such unique and quite important technology is DePin, which provides opportunities for any user to exchange their infrastructure for cryptocurrency.

What is DePIN

DePIN (Decentralized Physical Infrastructure Networks) is a concept of decentralized physical infrastructure networks that connects blockchain and real-world objects. Unlike traditional centralized systems, DePIN uses distributed control mechanisms and tokenized incentives, allowing community members to provide and use physical resources without intermediaries.

This technology has been applied to a variety of applications: communication networks, cloud storage, computing power, and even transportation and energy infrastructure. DePIN allows to reduce dependence on large centralized providers and increase resource efficiency.

How do DePIN projects work?

DePIN projects work on the principle of tokenized incentives, where users provide infrastructure resources (e.g., access points, server capacity, or data storage) in exchange for rewards in the form of cryptocurrency.

1. basic principles of DePIN operation

1.1 Decentralization of physical infrastructure

Conventional infrastructure networks (e.g. mobile networks, data centers, sensor networks, logistics, etc.) are traditionally managed by large corporations. In DePIN projects, this infrastructure is created in a distributed manner by network participants who contribute their equipment and capacity.

1.2 Use of blockchain

DePIN projects record network, transaction and reward data on a blockchain. This provides transparency and prevents censorship or manipulation by centralized players.

1.3 Economic motivation through tokens

To incentivize users to deploy and maintain infrastructure, DePIN projects use tokens. These tokens can be used for:

• Paying for the use of services (e.g., internet, cloud storage).

• Rewarding participants for network support (e.g., hardware deployment).

• Voting for changes to the protocol (Governance).

2. Components of a DePIN network

2.1 Providers (Resource Providers)

These are users or companies that deploy the physical infrastructure. They can provide:

• Internet routers and access points (e.g. Helium).

• Data centers and computing facilities (e.g., Render Network).

• Data storage (e.g. Filecoin, Arweave).

• Sensor networks for IoT (e.g., Hivemapper).

2.2 Users (consumers of services)

People or companies that use network resources, e.g., rent computing power, pay for internet access, or use data stores.

2.3 Blockchain and smart contracts

Smart contracts automate interactions between network participants:

• Manage rewards to ISPs.

• Control compliance with network rules.

• Guarantee transparency of transactions.

2.4 Tokenomics

Tokens are used to reward and pay for services. They can be:

• Utility tokens - used to pay for services within the network.

• Governance-tokens - give the right to vote for the development of the project.

• Mining-tokens - given for providing resources.

DePIN cryptocurrency

Features and differences of DePIN cryptocurrencies:

• Binding to real infrastructure

Conventional cryptocurrencies exist only in a digital environment, whereas DePIN tokens enable networks based on physical devices. For example, users install internet routers on a Helium network or allocate hard disk space for Filecoin.

• Utilitarian function

Unlike Bitcoin, which serves mainly as a means of accumulation, DePIN tokens are used to pay for services within the network. In Helium, they are used for wireless access, and in Filecoin, they are used to pay for data storage.

• Incentivizing participants

DePIN projects use tokenomics to reward users for supporting the network. In Helium, access point operators receive tokens for deploying equipment, while in Filecoin, server owners earn tokens for data storage.

• Link to the real economy

The price and demand for DePIN cryptocurrencies depend not only on market speculation, but also on the real demand for the services the network provides. For example, the more companies use Filecoin for data storage, the higher the value of its token.

Helium

Helium is a project that creates a global decentralized wireless network. Unlike traditional telecommunication companies, the Helium network is built by users themselves, who install access points and distribute the signal.

• The main difference from conventional cryptocurrencies is that the HNT token serves not just as a digital asset, but is used to operate the network. It is used to pay for services, reward access point operators, and keep the infrastructure running.

• To mine HNT, users install devices that cover an area with a signal and verify that other nodes are up and running. Unlike Bitcoin, where mining requires powerful equipment, in Helium a small device with minimal power consumption is sufficient.

• Earlier Helium worked on its own blockchain, but later switched to Solana, which reduced fees and increased transaction speed.

Filecoin

Filecoin is a decentralized storage network that competes with centralized cloud providers like Amazon S3 or Google Drive. 

Unlike conventional cryptocurrencies, the FIL token is used to pay for storage, not just as a medium of exchange.

• Filecoin works on the principle of a marketplace: users can rent storage space for their files, and server owners offer their resources in exchange for FIL. This makes the network more resilient, as data is spread across many independent nodes rather than being stored in a single data center.

• Mining in Filecoin is not based on processing power, but on the allocation of disk space. To earn FIL, users donate space on their hard disks and undergo algorithmic checks to prove data integrity.

• Filecoin is actively used in the Web3 ecosystem and is becoming an important component of the decentralized internet, providing secure and resilient storage of information.

DePIN projects

With the development of technology and the emerging demand for it, fundamental DePin projects have formed.

Chainlink

Chainlink is one of the first decentralized oracle networks that links the blockchain to external data. Unlike traditional cryptocurrencies, LINK is used to enable smart contracts with reliable real-world data.

Chirp

Chirp is a project that creates distributed communication networks for internet infrastructure. It uses tokens to reward network participants who provide devices and infrastructure.

Script

Script is a DePIN platform that provides decentralized cloud storage. Unlike Filecoin, the project is developer-oriented and provides tools for integration with applications.

Benefits of DePIN cryptocurrencies

1. Real-world application and connection to physical infrastructure

Conventional cryptocurrencies such as Bitcoin are mainly used as a means of saving or exchange. DePIN tokens, on the other hand, fulfill specific utilitarian functions, for example:

• In Helium (HNT), tokens are used to access decentralized IoT and 5G networks.

• In Filecoin (FIL), tokens are used to pay for cloud storage.

• In Render Network (RNDR), tokens are needed for distributed graphics rendering.

Due to this, the value of DePIN cryptocurrencies depends not only on speculation in the market, but also on the demand for the real services they provide.

2. Incentivizing users and democratizing infrastructure

Traditionally, infrastructure services (internet, cloud storage, computing) have been controlled by large corporations. In the DePIN model, the network is built by the community and users receive tokens for participating.

Examples:

• Helium access point owners earn HNT by providing network coverage.

• Filecoin hosts earn FIL for storing data.

• GPU owner in the Render Network earns RNDR for providing computing power.

This mechanism makes the infrastructure more resilient as the network is not dependent on a single provider.

3. Reduced cost of services

DePIN projects work on the principle of a distributed market where users provide resources themselves and other participants pay for their use. This reduces the cost of services compared to centralized counterparts.

For example:

• Filecoin offers data storage at a lower price than Amazon S3 because there are no middlemen.

• Render Network allows rendering 3D graphics cheaper than traditional data centers.

• Helium creates an alternative to costly mobile operators.

By decentralizing and automating through smart contracts, the need for middlemen is eliminated, further reducing costs.

4. Greater resilience and fault tolerance

Centralized infrastructures are prone to failures, censorship and cyberattacks. DePIN networks are built on a distributed architecture where:

• Data is stored in different nodes (Filecoin), which protects against information loss.

• Internet access is provided by thousands of independent points (Helium), reducing dependence on large ISPs.

• Computations are distributed across the network (Render Network), reducing the risk of failures.

This makes DePIN projects more resilient.

5. Decentralization and user control

In centralized services, corporations control the infrastructure and usage rules. In DePIN projects, management is done by the community through a DAO (Decentralized Autonomous Organization).

For example, FIL owners in Filecoin can vote on changes to the network. This allows users to determine the rules of the platform themselves and prevents abuse by individual companies.

6. economic sustainability and token value growth

DePIN cryptocurrencies have built-in supply and demand mechanisms:

• As network utilization increases, the demand for tokens increases.

• Participation rewards incentivize infrastructure expansion.

• Deflationary mechanisms (burning tokens) can increase their value.

For example, in Helium, a portion of HNT tokens are burned when the network is utilized, which reduces the total supply over time and makes the asset more valuable.

7. Flexibility and scalability

DePIN networks can expand by attracting new users and integrating with other Web3 projects. For example, Filecoin can be used in the IPFS ecosystem to store content in a decentralized internet.

In addition, many DePIN projects are moving to faster blockchains (e.g., Helium moved to Solana), which increases their scalability.

Conclusion

DePIN has become a new narrative in the world of cryptocurrencies and the real world, allowing users to participate in the creation of physical infrastructure while interacting with the cryptocurrency environment. Projects such as Helium, Filecoin and Chainlink demonstrate the potential of decentralized networks to solve real-world problems. DePIN cryptocurrencies provide new opportunities for investors, users and developers, helping to create a more sustainable and independent digital economy.

FAQ

1. What is a DePIN in cryptocurrency?

DePINs are decentralized physical infrastructure networks that use blockchain and tokenized incentives to manage resources.

2. How do decentralized physical infrastructure networks work?

They connect physical devices into distributed networks and users are rewarded for providing resources.

3. What advantages do DePIN projects offer?

The main benefits are decentralization, cost efficiency, security and earning potential.

4. In what areas are DePIN technologies used?

DePIN is used in communication networks, cloud storage, computing, transportation and energy systems.

5. How can users participate in DePIN projects and receive rewards?

They can contribute infrastructure resources (e.g. access points, servers, storage) and receive tokens as rewards.