February 24, 2023
What is DePIN: Your guide to Decentralized Physical Infrastructure Networks

The term DePIN (Decentralized Physical Infrastructure Networks) seems to be on the lips, tweets, and minds of the entire crypto community. But what is DePIN, exactly? And why does everyone see it as the long-awaited bridge between Web3 and the real world?
In this article, you’ll get your answers to these (and other) questions, as detailed as possible. For those in a hurry, here’s a quick overview of the key takeaways:
What is DePIN?
If there’s one thing Web3 loves more than narratives, it’s acronyms — from NFT and DeFi to DAO and POAP and beyond. And let’s be real, there’s a good reason these acronyms exist. Non-fungible tokens and decentralized autonomous organizations sound far less sexy than NFTs and DAOs. Not to mention, they’re a mouthful to say. But these acronyms aren’t just shortcuts. They’re how Web3 turns complex concepts into movements. And the latest movement everyone seems to be getting behind is DePIN.
DePIN is an acronym for Decentralized Physical Infrastructure Network. We’ll get into exactly what that jumble of words means in a bit. For now, you just need to remember that DePIN is focused on the intersection of blockchain technology and real-world business cases. It brings Web3 into the real world. Which is exactly why so many people find DePIN so exciting.
But what exactly is a “Decentralized Physical Infrastructure Network” and how could it fundamentally change the way we think about things like energy, telecoms, mobility, smart homes and cities, and even the environment? Let’s take a closer look.
Decentralized Physical Infrastructure Network: a definition
We know that DePIN stands for Decentralized Physical Infrastructure Network. But that, by itself, isn't very helpful. To truly understand the significance and potential of DePIN, we need a more concrete definition of the term:
A DePIN is a decentralized application that uses tokens to incentivize people to crowdsource and build connected real-world physical infrastructure.
Let's break that down:
- A DePIN is a decentralized application — this simply means that DePINs are apps that run on blockchain networks
- that uses tokens — DePINs use digital tokens and/or cryptocurrencies
- to incentivize people to crowdsource and build — to reward people with tokens for funding, setting up, and running
- connected real-world physical infrastructure networks — networks of interconnected machines, devices, vehicles or robots which provide goods and services to people and other machines in the real world.
Still confused? Let’s take a look at a concrete example: MapMetrics is building a mobility DePIN that lets you earn while driving your car. All you have to do is download MapMetrics’ free navigation app to your iOS or Android smartphone and start using it in place of the standard Web2 navigation apps we’re all used to.
But why would you want to do that?
Traditional navigation apps farm your data without giving you anything in return. With MapMetrics, though, you willingly contribute anonymized geo-location data and get token rewards for your efforts. This data is used to provide real-time traffic updates and ensure the best and most accurate navigational experience for users.
Each phone (or other type of device) connected to the MapMetrics network is part of the MapMetrics DePIN. Here’s how:
- The network is decentralized, since users from all around the world can join it
- The users’ phones are physical pieces of hardware
- Together, they form an infrastructure network that provides a real-world service.
Simple, really.
Other ways to think about DePIN
…or maybe not that simple, actually. While the above definition is comprehensive and clearly covers everything a DePIN is, you can use the word DePIN in other ways too. Here are a few:
- DePIN is a business model that flips the traditional approach to deploying infrastructure on its head by allowing organizations to bootstrap their way to scale instead of relying on huge amounts of upfront capital. Bottom-up. Grassroots.
- DePIN is an industry focused on providing real-world services to people via real-world vehicles, robots, and devices, on the open, community-governed Web3.
- DePIN is a global infrastructure revolution, governed by the many, not the few, enabling a new era of economic participation in the tangible world we all share.
- DePIN is a movement in which every person can contribute to the community they're part of and earn for the services they provide — it is a physical embodiment of the paradigm shift from corporate-controlled Web2 to community-owned Web3.
We know that humans don’t come to consensus quite as neatly as blockchain nodes, and we’ve established that DePIN can mean different things to different people. But to make matters even more confusing, there are also multiple names for the core idea of DePIN. In fact, you may have already heard about this trend under one of those different names, like EdgeFi, Proof of Physical Work (PoPw), or Token Incentivized Physical Networks (TIPIN).
In essence, DePIN isn’t actually a new trend. It’s an idea that goes back to the very dawn of the blockchain era. However, given its rapid development and increasing importance within the industry, it now warrants a single, defining name.
We’ll side with Messari and call it DePIN, for the sake of consistency and the importance of consensus. After all, consistency is crucial when talking about what is Web3’s ostensibly best shot at not just a rebound, but of actually becoming the default Web, worldwide.
How does a DePIN work?
Like any other network, a DePIN boils down to two fundamental components: the physical infrastructure (duh) and the digital backbone it runs on. The physical infrastructure can be made up of any variety of devices. For example, desktop or laptop computers providing CPU compute power for decentralized cybersecurity services. The digital backbone is simply a host of smart contracts running on a blockchain and handling various aspects of the network.
The blockchain serves as a ledger for the entire network, recording transactions and other value exchanges between network members. An example of such an exchange would be purchasing broadband access from someone renting out their router. The network rewards its participants with tokens for specific activities, like providing the hardware needed to keep things running or sharing data with the network.
These tokens work as an incentive mechanism, encouraging the supply side — solar panel owners, connectivity providers, sensor array owners, et al. — to build up the network’s capabilities to the point where it can compete with the legacy names currently dominating the market.
The increasing demand, for its part, incentivizes more players to join on the supply side, creating a self-reinforcing long-term growth loop, also known as the DePIN flywheel.
What is the DePIN Flywheel?
The DePIN Flywheel is a self-sustaining cycle of growth. Sounds cryptic, right? But it’s really simple. Here is the idea: as a decentralized network grows, more people and devices join to provide data and services. This increases the value of the network as well, prompting more users to join. More users create more value, more value brings more users, and so on in perpetuum.
Let’s break it down real quick:
- More and more people start using a DePIN and its services, leading to a higher token value and better rewards for those providing the services.
- The promise of rewards serves as an incentive for others to join the network as service providers / device owners.
- As more people join the DePIN as service providers, the network’s capacities grow.
- This growth on the supply side attracts more investors, entrepreneurs, and, most importantly, users — leading us right back to step 1.
At its core, the DePIN Flywheel demonstrates how DePINs incentivize people to build out these physical infrastructure networks for other people and machines to use, without the need for massive upfront investments (the default mode of traditional business models). Tokens attract people to deploy hardware that offers services to other people. People on the supply side earn from providing new or existing hardware to those seeking out the goods or services that hardware provides. And since there are no middlemen, everything is often far cheaper and way faster than in traditional business models.

Why is DePIN so important?
Web3 is a vast industry encompassing a wide variety of applications and use cases. But if you think about it, most of those (at least the most popular ones) are linked to the digital world. NFTs, cryptocurrencies, Metaverses, etc. all aim at changing the ways we interact in digital space.
DePINs, on the other hand, are tightly focused on changing the ways we interact with the physical world. Yes, there is an inevitable digital aspect to DePIN as well, thanks to its reliance on blockchain technology. But as opposed to other Web3 use cases, DePIN brings blockchain into the real world. It aims to revolutionize key industries that govern our everyday lives. Industries that make up the underlying infrastructure of our world and that have traditionally been controlled by a handful of powerful and highly centralized players. The DePIN model is all about giving control of those industries back to the people whose lives are shaped by their inner workings.
DePIN has the potential to reshape our daily lives, redefine the concept of ownership, and transform the very infrastructure our world is built on. That’s why it’s so important.
What are the biggest DePIN sectors?
DePIN can be applied to almost any industry or sector that relies on physical infrastructure for its daily operations. Some of the main sectors DePIN is currently being applied to include:
- Energy
- AI
- Mobility
- Telecoms
- Healthcare
- Agriculture
- Logistics
- Geospatial networks
- Digital storage
- Bandwidth networks
- Cloud computing
- And many more

So you can have DePINs providing everything from mobility, to energy, to connectivity, to storage services. But are all DePINs equal? Isn't mobility more of a physical resource than data storage?
Physical Resource Networks vs. Digital Resource Networks

According to Messari, DePINs can be sorted in two buckets depending on the hardware and resources, goods, and services a particular network offers.
Physical Resource Networks (PRNs) incentivize people to direct or deploy location-dependent hardware to offer real-world,
non-fungible goods and
services. Think mobility, energy or connectivity. When ordering a taxi, you want to get from point A to point B; when buying power, you care about its availability in the target area; when buying local weather data, you want it, well, to be local. Location matters.
Digital Resource Networks (DRNs) incentivize people to direct or deploy hardware to offer fungible, digital resources. Think storage, bandwidth or compute networks. You don't really care where the data center is as long as it holds your vacation pics, and the location of the computer running your machine learning model isn't of that much importance either; you just care about the service it provides. That makes the PRN/DRN distinction.
Now that we understand the difference between PRNs and DRNs, let's move on to why and how DePIN is going to change the world.
What are the advantages of DePIN?
You’ve probably realized by now that there are many benefits to the DePIN model. But why would anyone risk venturing into such a new and unexplored field as DePIN instead of doing things the old-fashioned way? To answer that question, let’s take a closer look at exactly what DePINs offer.
Lightning-fast scaling
By crowdsourcing physical infrastructure, DePINs can hyper-scale faster than traditional projects at a fraction of the cost. Example: Counting thousands of users, NATIX is mapping the world faster than Google.
Community instead of corporation
Instead of relying on centralized corporations interested primarily in profit margins and quarterly reports, communities can actually own the hardware comprising their infrastructure networks. This aligns the interests of the stakeholders with fostering adoption and growth. Example: Through its DAO for decentralized autonomous machines, XMAQUINA enables everyone to benefit from automation.
Open governance
While traditional infrastructure projects often have a centralized entity dictating all the terms and conditions of use, DePINs are open, democratic, and accessible. Example: Traditional electric vehicle charging companies set their prices as they please and pick new locations for their chargers in line with profit considerations. But a DePIN like charge, for example, could leverage community governance mechanisms to determine optimal pricing and locations, while enabling any charger owner to become a service provider.
No gatekeeping
DePINs aren’t just permissionless and open, they’re also censorship-resistant, with no centralized gatekeeper capable of denying anyone access for any reason. Example: While centralized platforms often only share data with researchers that fit their interests, anyone can freely access the global noise pollution data gathered by the Silencio network.
New investment opportunities
By leveraging tokenization and fractional ownership, DePINs unlock an entire new asset class for the global Web3 community, enabling it to provide liquidity for APY-generating real-world machines. Example: penomo lets anyone invest in green energy storage batteries and earn a share in the revenues those batteries generate.
While a lot of the above sounds (and is) great, true innovation must always be underpinned by a clear-cut business advantage to make it long-term. Thankfully, DePINs do have a lot going for them on that front too, offering a variety of competitive edges over the traditional model:
- By crowdsourcing hardware and its maintenance, DePINs operate at a fraction of the capital expenditure and operating costs of traditional companies. Let’s look at telecom companies as an example. Traditional telecoms have to invest billions into their infrastructure and the real estate required to host it, as well as retain armies of employees to support and maintain it all. DePINs, on the other hand, incentivize network members to take care of all this while everyone profits.
- By leveraging blockchain technology, DePINs offer their members secure peer-to-peer payments without having to rely on a payments processor or other intermediary taking a cut.
- DePINs also grant network participants direct access to a variety of Web3 tools and DeFi services that can unlock even more revenue streams for them.
- By slashing upfront capital requirements and reducing the barriers to entry, DePINs bring new competition into a variety of industries that have been dormant for a while, incentivizing innovation across the board.
Example: Tracking noise pollution
Noise pollution is a pervasive problem plaguing modern population centers, both big and small. It causes a whole variety of health issues, from sleep disruptions to headaches and loss of hearing. These issues often result in significant economic impacts and cause distress across communities, making for a near-universal problem.
While it’s safe to assume that decision-makers would have been happy to solve this problem, this is easier said than done — especially as noise pollution data is often scarce. How would you measure it, after all? Would you be happy with having a private company set up microphones all across your city? Just imagine the upfront costs of that. And how far would its reach extend? Would it be able to set up shop only in certain areas? Would it be able to go international? How fast can it scale?
Well, the Silencio DePIN has more than 350,000 noise pollution sensors deployed across more than 180 countries. All of these are privately-owned, in the sense that Silencio doesn’t own them; in fact, all these sensors are microphones on the phones of the people who installed the Silencio app.
Privacy is a huge concern when it comes to sharing any type of data, especially the type that comes from your phone’s mic. Silencio is well aware of that, which is why the app doesn’t actually record or send the actual feed from the mics anywhere. What it does is simply measure the overall noise level in the vicinity; this data, properly anonymized, is what leaves the phone.
Now, noise pollution data has value — not just for decision-makers and researchers, but also for a whole bevy of businesses. A real estate developer could use it to offer buyers estate in a quieter area, as that could be factored into the price. Brokers would want that data too, pretty much for the same purposes. Restaurants and hotels would love to quantify their claims of being in a quiet location with hard data. That’s where the liquidity comes from in the Silencio ecosystem. And since the valuable data is provided by device owners, Silencio grants them rewards in the form of tokens.
This allows Silencio to incentivize the deployment of a network that would have been unimaginable for a traditional company, and they can do all this at a pace that a regular business wouldn’t have been able to keep up with. All of this also comes at a fraction of the expenses a regular business would have, and with full commitment to privacy and community ownership.
DePIN for traditional business and enterprise
While the DePIN model is innovative at its core, it has tons of advantages to offer to traditional businesses as well, from small-scale companies to the Fortune 500 list.
For one, DePIN provides small businesses with cheap, accessible, and community-owned infrastructure that runs on open and transparent terms. For example, some businesses don’t really need the most powerful or most expensive cloud computing services available. They just need a place to host their website or app without any hassle. So, instead of paying high premiums to traditional cloud service providers who can change the terms and pricing of their services at any point, those businesses could choose to join the Acurast DePIN, leveraging its serverless cloud service for transparent and accessible hosting.
But it’s not just small businesses that benefit from DePIN. Large-scale corporations have much to gain from crowdsourcing valuable data and digital resources from their users. And DePIN lets them do just that, but without the additional overhead of deploying their own infrastructure or the need to worry about privacy regulations. For example, the Roam Network DePIN provides telecom companies with granular insights into their local coverage and signal quality, all gathered directly from users. This data gives the telecom companies a detailed insight into the quality of service they deliver and allows them to improve their networks accordingly.
Cybersecurity is a concern for all businesses, regardless of their size. And while malicious actors build up armies of infected devices, recruiting them into powerful botnets, the cybersecurity industry often lacks that same firepower. But by allowing anyone to lend their computing power to help fight cybercrime, the DATS Project DePIN is building up defense mechanisms tailored to modern cybersecurity needs — something both small businesses and enterprises can take advantage of.
Finally, there are DePINs specifically focused on providing enterprise-grade services. Like Touchbrick — an AI-powered DePIN for safeguarding sensitive data in a compliant manner. Touchbrick’s AI agents let enterprises securely store things like patient records or user transaction histories without the need to worry about the various region-dependent regulation frameworks in place around the world. By training these AI models to their specific needs, enterprises even have the option of monetizing their data repositories without compromising the privacy of their users.
What challenges does DePIN face?
Like any emerging industry, DePIN faces its own set of specific challenges — from scaling and adoption to security and incentivization. Let’s take a closer look at the hurdles DePINs need to overcome to successfully bring in the era of the Machine Economy.
Scaling & interoperability
Integrating millions of devices across hundreds of separate DePINs, all while ensuring those devices can communicate and transact with each other seamlessly requires standardization. DePINs need to agree on an underlying protocol that would allow all machines, regardless of their type, operating system, or specific hardware to interact efficiently. Without this type of standardization, DePIN faces the risk of fragmentation, which could drastically hinder its growth and global adoption.
Data security and integrity
DePINs rely on vast networks of decentralized, interconnected devices exchanging data. And often, that data is sensitive. Which is why robust encryption and data verification protocols are a must for the success of DePIN. Without a secure mechanism for ensuring all interactions across all types of machines are trustworthy, DePINs are vulnerable to data tampering and fraud.
Incentivization mechanisms
To truly reach their full potential, DePINs need users. Lots and lots of users. The best way to encourage such widescale user participation is through incentivization. However, when it comes to DePIN, in most cases simply offering token rewards isn’t enough. The rewards mechanisms DePINs are built on need to provide a strong balance between immediate incentivization and long-term sustainability to ensure the economic model a specific DePIN is built on remains viable over time. To do this effectively, DePINs need to align their incentives with the creation of real-world value and ensure all participants — from individuals contributing small-scale devices to organizations deploying large-scale infrastructure — are rewarded proportionally to their contributions.
Adoption
Widespread adoption is a challenge for all emerging industries and technologies, and DePIN is no exception. Blockchain alone has proven a complicated enough concept for most mainstream users, and the DePIN model adds a whole new layer of complexity as it strives to integrate blockchain into the real world. DePINs need to find ways to educate users, businesses, and even entire industries about their value proposition, while addressing skepticism and misconceptions about decentralized business models. They also need to design seamless user experiences and create smooth onboarding mechanisms for their users. But most importantly, DePINs need to demonstrate clear, real-world benefits, like cost-savings, higher levels of efficiency, and enhanced security in order to convince individuals and businesses to transition away from traditional systems. Building trust through successful pilot projects and partnerships with established players can help increase trust and pave the way for DePINs to achieve their full potential.
peaq: the home of DePIN
peaq is a layer-1 blockchain built specifically for DePINs. In fact, peaq was setting the groundwork for the DePIN revolution before DePIN even got its new name. Even back then, peaq was building the Machine Economy — the new, hyperconnected economy where smart devices take on more and more roles in the value creation chain. DePINs are the building blocks of this system, and to power the Machine Economy, peaq has to be the home of DePIN.
For this reason, everything in peaq’s toolkit is laser-focused on the DePIN model and helping DePIN builders build better DePINs. Here’s a quick rundown of some of the core features and benefits peaq offers to real-world dApps:
- An array of versatile Modular DePIN Functions, including self-sovereign identities for machines/Things (peaq ID), role-based access management (peaq access), peer-to-peer payments (peaq pay), data verification (peaq verify), and much more. These Modular DePIN Functions let builders quickly set up the foundations of a DePIN without having to build everything from scratch.
- A Web3 machine control center (peaq control) that provides a holistic way to onboard any machines, devices, sensors, vehicles, or robots to any DePIN building on peaq.
- A tokenomics model tailored to the needs of DePINs, including token incentives for dApps and all connected machines, devices, sensors, vehicles, or robots working as their earnings amplifiers, and subsidization pools for new machines added to the network.
- A multi-chain strategy that ensures interoperability with other layer-1 networks and DeFi services, including peaq ID compatibility with Polkadot, BNB Chain, and Solana, and bridges to dozens of blockchains via Wormhole.
DePINs looking to start building on peaq can also make use of the Ecosystem Grant Program for the extra oomph.
If that piqued (or peaqed) your interest, you'll love this piece on why DePINs that build on DePIN-focused blockchains have an unfair advantage over those that don't.
Welcome to the home of DePIN
- Is this blog a must-read for anyone you know? Sharing is caring!
- Want to help change the world? Start building on peaq today or get your idea funded.
- Build peaq. Join the community.