The crypto industry has grown by leaps and bounds since its inception. Every month or two, there is a new narrative in the market that has the potential to disrupt its Web2 counterpart. Last year, it was RWAs that gained a lot of traction, and this year, it's something else. So let's know in detail about the next trillion-dollar narrative in #crypto, which is "DePIN".
What Is DePIN
1. DePIN refers to a Decentralized Physical Infrastructure Network.
2. It aims to develop the physical infrastructure in the service-based sector using blockchain and token rewards.
3. Now, let's use an example to understand its functionality.
Nowadays, almost every centralized digital platform utilizes community power to build resources for millions of users.
Take OLA Cabs as an example
? Drivers use their own vehicles (resources) and services (driving) to get paid, and OLA helps them get access to a wider user base through its platform.
? OLA Cabs uses fiat rewards and wider visibility as perks to bring more drivers onto its platform.
? They also keep control of the driver resources (vehicles) as long as they are on the platform.
? Along with that, providers and users both have to go through a process for using the services.
? Imagine a system where drivers will get paid more and will be hassle-free to use the services.
? Also, there will be a record of everything that is happening to prevent any fraud.
That's what DePIN is trying to do.
1. DePINs design a permissionless system for providers and users via the blockchain; anyone can provide the required services as long as they have sufficient resources.
2. DePINs can be used in a lot of fields, like transport, energy, and wireless connectivity.
How Does It Work ?
There are 3 major components in DePIN
1. Physical Infrastructure: It could be anything from a sensor or internet router to a solar panel.
2. Middleware: It helps connect the blockchain and the physical infrastructure.
3. Blockchain System: Data are sent to the blockchain, and based on the data, the blockchain rations demand across the providers and computes the rewards based on these activities.
Right now, the sectors DePIN is trying to disrupt are worth over $5 Trillion, which shows the immense potential it has in the future.