DePIN

How do DePIN networks work?

Decentralized physical infrastructure networks, or DePIN, use tokens to coordinate services delivered by distributed hardware. Examples include wireless coverage, storage, computing and sensor networks. Participants supply equipment or capacity, while customers use the resulting service. The blockchain usually accounts for some combination of payments, rewards and proofs; the actual service still has to work in the physical world.

How it works

Early rewards can encourage providers to build capacity before demand arrives. That makes it essential to distinguish token incentives from customer revenue. Coverage maps, installed devices and advertised capacity do not by themselves show useful, paid usage. A network also needs to detect fake activity and verify service quality. Hardware costs, maintenance, geography and changes to reward rules can strongly affect providers, while a token holder may have no ownership of the equipment or operating business.