The range of applications for such architectures is very broad. For example, it can be used to run and manage an AI crypto bot for retail trading or for AI development and machine learning. Electrical grids, physical manufacturing, supply chains, and more can be also improved through the use of these platforms and the implementation of real-world asset fractionalized ownership.
Despite the utility, the size of the sector is still relatively small. Only DePIN blockchain companies focused on procurement of computational power for different software applications have been enjoying the attention of investors. However, the success of Render, Filecoin, and the Graph indicates that users are very interested in the practicality of services offered by these massive interconnected hardware and software fusions.
Retail investors seeking new ways to diversify their portfolios should not sleep on these interesting platforms that offer a way to invest in a rapidly evolving technology.
What is DePIN crypto?
Tokens that are issued by companies in this section of the larger cryptocurrency ecosystem are quite popular among tech-savvy investors who recognize the utility of tools such as Render and Filecoin. Sharing computational resources and allowing for their smart allocation for various purposes makes many industries more accessible and, as a result, more competitive.
For example, training AI models is a resource-intensive endeavor that many individual developers cannot do efficiently due to the sheer price of computational power and specialized hardware. By offloading the load on GPUs offered by participants of a large computational grid during times when the demand is lower than expected, developers with a tight budget can save money and still deliver a great, competitive product to the large audience of consumers.
The same is applicable to other resource-hungry industries. Video rendering is another technological process that prevents many aspiring creators and freelancers from efficiently utilizing their time and creativity. Render is an excellent example of a platform that allows everyone to significantly speed up video rendering.
This sector of the larger industry is a great example of achieving tangible results using mostly software solutions. With many people owning overpowered hardware, idling excess computational and storage capacity can be used efficiently and produce benefits to everyone. This incredible utility is the biggest selling point of the sector with many tokens reaching high evaluations and demonstrating stable performances.
How DePIN crypto works
In the real world, many types of contemporary resources are often created, maintained, and taken advantage of by centralized entities. For example, individuals do not have the necessary capital and connections to invest in massive data processing, transportation, utilities, or electric grids. These are almost entirely owned by corporations and governments.
Some disruptive technologies showed that it is possible to democratize many types of resources through the smart use of web 2.0 concepts. Two most successful examples are Airbnb and Uber. These two tech startups are using different frameworks comprised of separated physical assets owned by individuals who can use them for profit. The issue here is that centralized entities are driven by profits and have to operate within clunky traditional financial ecosystems preventing them from actually focusing on perfecting the technology in ways that benefit end users and asset owners.
The world of crypto has many great solutions for various issues. For example, the bulk of promising startups are fully transparent, trustless, and permitionless. They operate efficiently, do not need massive staffs to remain functional, and offer hardware owners an easy way to sell excess computational power, data storage, or even power.
Let’s take a look at some prominent use cases for these next-gen solutions:
- Filecoin is one the pioneers in the industry. This storage platform competes against centralized cloud digital ecosystems by offering a less centralized approach where users with excess storage capacity can provide it to others to earn rewards. The price for storing data is paid in FIL tokens which are also rewarded to the most active participants to ensure a high level of incentives for users willing to dedicate their hardware to Filecoin.
- Render is another similar platform that focuses on the computational power of GPU chips owned by owners of nodes. This power is used to render videos quickly. The video rendering procedure is time-consuming and resource-intensive making the demand consistent. The load can be spread across multiple machines instead of a single GPU which is often the case for many individual creators and even professional video editors.
The leading bunch of the industry is offering something tangible to consumers and a financial reward to providers creating a self-balancing ecosystem fully managed by innovative technologies. This democratization is especially important today when the world is in the heat of a global race toward artificial general intelligence. Some of the best DePIN AI tokens are issued by interesting startups that focus on democratizing computational power to ensure easier access to machine learning for individual developers and non-profit researchers.
Benefits of DePIN projects
Many of these innovative platforms are quite interesting for many reasons. The current landscape of this sector of the crypto industry is diverse enough to test multiple hypotheses about the value of networks with practical real-world applications. Proponents of the idea argue that using unconventional approaches is extremely efficient and useful while the skeptics point toward potential market manipulations, technological risks, and scalability issues.
Let’s assume that you are among enthusiasts and want the sector to succeed. In this case, you should know about the advantages of top DePIN crypto projects:
- Low operational costs. The bulk of the cost of utilizing tangibe things from the real world is related to the presence of various intermediaries. Research suggests that centralized electric grids are more costly to end consumers. The introduction of fragmented ownership and management can reduce costs by at least 30% in the long run. At the same time, smart contracts and automation through the variety of modern solutions deployed without any centralization can significantly improve resource allocation methods and prevent wastage.
- Trust and transparency. The immutability of the information on the ledger is the key selling point of the industry as a whole that makes all operations within an ecosystem to be easily verifiable by anyone. Fraudulent activities and corruption so prevalent in centralized systems is estimated to cost over $3.6 trillion to the global economy. If transactions become auditable, all involved parties will have stronger faith in digitalized ecosystems.
- Secure and resilient. Contemporary technological startups focused on building somethign tangible spread responsibilities and control over a spreading multitude of nodes to completely prevent single point failures and improve security of the network. In theory, this architecture reduces the likelihood of outages and network-wide attacks which can save up to $1 trillion for the global economy according to experts. Another layer of resilience is added through cryptography which improves data safety.
- Scalable and flexible. Some experts believe that the modular architecture of ledger-based applications is the key to unlocking the scalability potential and quickly deploying the necessary changes as they become required. One example of potential practical application of the technology is the way they can effortlessly incorporate new energy sources and providers into existing electric grids. The theoretical limit to the scale of the sector does not exist since they can operate globally.
- Equal access to infrastructures. The ethical argument for the development of democratic technological solutions is that they can deliver energy, water, internet, and other critical resources to remote or poorly served areas by facilitating collaboration and framework development across the board. Decentralized energy is a dream that can provide power to over 600 million people worldwide who desperately need it.
The future of the industry
Retail investors are mostly concerned with future applications of any technology. If there are promising prospects for growth, their investments will produce returns. Among specialists and hopeful experts, many depin crypto coins are praised for their long-term potential and possible appreciation due to the increased demand of real-world decentralized physical infrastructures.
While the trajectory of the industry is still unclear, we are all hopeful that the success of new brandslike Render and Filecoin will be instrumental in the growth of the sector and the slow realization by governments and centralized entities that this method is the only way to go if we want to create useful instruments used by everyone equally and fairly.
Here are factors that makemany of these innovative platforms look promising:
- The demand for unconvenitonal solutions is growing globally. The internet made it possible for individuals to find ways to be less dependent on centralized authorities. Whether through obtaining eye-opening information or through the smart implementation of various DeFi solutions in their day-to-day lives, people can survive without relying on governments and large institutions. Interestingly enough, centralized entities are also interested in less centralized methodologies with over 55% of organizations surveyed by Deloitte expressing their hopes to remove oversight in some of their structures.
- Economically sound. The cost reduction afforded by the some of the finest players in the industry is a very attractive proposition to many individual retail investors and end users of democratically shared resources. Since the new technological approach can be used for any existing services like transportation, supply chains, data handling, and more, it is possible that the shift to solutions without centralization will happen sooner than later. A report by McKinsey suggests that using these advanced methods can reduce costs related to running logistics and supply chains by $450 billion annually.
- Environmentally friendly. In the distant future, smart energy use and distribution alongside the gradual introduction of renewable energy sources will cut global emissions by as much as 3.5 billion metric tons by 2050 according to IRENA. Some other estimates suggest that heavy use of modern technologies for electric grids can cut greenhouse emissions by at least 39% globally.
- Technological advancements. Advanced technological solutions can be instrumental in building massive physical frameworks relying on heavy use of digitalized components. For example, using them for the IoT can make the idea of smart homes actually feasible and bring it from the niche corner occupied by tech geeks to the forefront of consumer electronics retail field. On a larger scale, using less centralized solutions for smart cities can be another way to enhance our way of living. The smart city industry is expected to reach over $2.6 trillion by the end of 2025.
- Social, ethical, and economic breakthroughs. With millions of people living without access to critical commodities like energy, water, and the internet, it is hugely important to support this technological concept as it can be the driving force behind the deployment of interconnected useful systems that can deliver essential resources to remote and underserved areas in Asia, Africa, and South America.
However you cut it, the future is bright for this sector meaning that investing in tokens from these startups can be a sound financial decision. On the other hand, it is important to monitor some of the most prominent platforms in the sector and scrutinize them meticulously before buying their tokens for long-term holding.
Earning with DePIN tokens
Since many of startups in question are not limited to a specific field and can implement a variety of assets in its architecture, the diversity of ways in which one can make money by investing in modern technological hardware solutions united in an interconnected web is quite impressive. We want to give you a couple of examples. Below is our selection of methods for income generation.
Staking and yield farming
Many coins are stakable. By providing tokens to the network, you support its security and longevity while receiving annual rewards that may range from 5% to 12% depending on the platform you choose. At the same time, providing liquidity or lending tokens can be quite profitable with some yield farming systems offering APYs close to 20%.
Participating in the architecture
Some of these advanced hardware frameworks are quite attractive on their own. Many investors can focus on building foundational components of such architectures and earn money by being active participants. For example, joining a community like the GreenPower Network can yield up to 8% return depending on sales.
Another great example is the Helium network that allows participants to provide wireless coverage to receive rewards in HNT. During the peak popularity of this particular startups, users reported monthly earning in the ballpark of $300.
Providing resources to the grid
The variety of Ai-oriented startups is quite limited at the moment, but it can change with more of them joining the industry. The demand for computation power to train artificial intelligence models is growing rapidly. The same is fair for data storage. Some of newly established household names like Filecoin or Storj. Depending on the demand, users of Filecoin earn up to $20 per month per terabyte of data stored on their hardware.
A perfect example of earning with computational power is one of the best Solana DePIN projects Render. We already covered how it makes video rendering cheaper and more affordable. Users can earn up to $150 per GPU per month depending on its performance and demand.
Trading and speculation
All of the digital assets in this sector have a strong potential for long-term appreciation due to the increasing demand for this kind of services which is expected to grow rapidly during the next decade. One of the most notable performers in terms of crypto DePIN price has been Filecoin with a massive 1000% increase within the first launch post launch.
Many tokens are openly traded on centralized trading platforms making them excellent targets for any trading bot platform that uses advanced speculation strategies like GRID or DCA. Some of the best new DePIN startups are immediately listed on Binance, KuCoin, and other CEX platforms allowing users to trade them for profit.
The best DePIN crypto projects in 2024
We have our own DePIN crypto list with several great companies that you should be aware of:
- Filecoin has been mentioned several times in this article. It is a great example of a hardware framework that maintains a high level of demand and provides a useful service that can be used by individuals, small development teams, enterprises, and more. The token has been performing impressively. Despite falling off dramatically after its initial surge, it has been traded consistently within the $4.5 — $6 range for a while and has a $3 billion market cap at the time of writing.
- Golem is gaining traction thanks to the growing interest from researchers and individual enthusiasts toward machine learning and demanding computational tasks. The GLM token is doing just fine. It fluctuated a lot throughout the decade but the community of investors definitely sees value in Golem and the recent surge in price serves as proof.
- Render is the best performer among startups meaning crypto enthusiasts are very happy with the metrics demonstrated by this next-generation video rendering platform that also offers computational power of available GPUs for other purposes like AI training. With a massive $3.2 billion market cap and a huge potential for growth thanks to the growing demand for computational power that can be used in machine learning, Render seems like a great investment target for retail crypto investors.
- Arweave is another top performer in the larger ecosystem. It is a fragmented cloud storage and hosting platform that allows end users to host web applications and sites without worrying about data stability and accessibility. Arweave is capable of providing the necessary technological foundation and tools for developers interested in deploying web 3.0 solutions quickly and reliably while making them compatible with the internet as a whole. The AR token has a solid $1.9 billion market cap at the time of writing.
- THETA Network offers a wide range of solutions tailored for AI training. It has a massive amount of devices unified in a net and leads the pack of AI-focused companies. Investors and developers alike recognize this platform as one of the most useful in the current age of rapidly developing AI technologies. THETA is traded at $1.7 and has a respectable $1.76 biillion evaluation.
Should retail traders even think about investing?
Hardware resources are a tangible foundation for contemporary digital networks. It means that there are real assets behind the proposition of value. This fact alone puts many of the discussed startups on a different level compared to many other DeFi and DeSci platforms that often look completely speculative and made of nothing but smoke and a couple of mirrors for a more convincing image.
If you are interested in investing in long-lasting digital assets, you should be checking out some of the digital assets from this sector. Some of them have been around for over a decade and often do not correlate too much with Bitcoin and Ethereum making them prime candidates for the inclusion in a crypto portfolio that needs diversification.