Analysis on the DePIN track

Source: Daoshuo Blockchain

In the previous articles, I shared some basic views on the AI ​​+ blockchain track and my views on some projects.

Most of the projects mentioned are far from the ideal decentralized AI in my mind; they are even far from my expectation of using AI to the blockchain or using the blockchain. There is a certain gap between the two directions of utilizing AI.

Although I like the creativity of some projects and recognize their direction, it will take time to test whether they can finally be implemented. Some of these projects have already issued tokens. But from a cost-effective perspective, its price is not low now. For a project that is still under exploration but whose price advantage is not so obvious, whether this is good or bad can only be left to the market to test.

In addition to AI, another track that will also be hotly speculated in the coming bull market is DePIN.

This track actually has many similarities with AI+blockchain: they both hope to make extensive use of physical equipment in the real world, and both emphasize the use of "idle" resources.

So many existing so-called AI + blockchain projects can also be regarded as DePIN projects.

But compared to AI+blockchain, I think DePIN projects have a unique feature: it has already taken a certain shape and exists widely in our real life.

In my opinion, Didi Taxi is a project very close to DePIN.

However, it is not decentralized, just a distributed system. Because it is not decentralized, all the problems we see in centralized systems can be seen in it. Therefore, our natural logical extension is to use blockchain to transform this industry (such as adding incentive mechanisms) and remove all its shortcomings.

This is not only the thinking of many DePIN projects now, but also the thinking of many projects as early as 2017 when ICO was popular.

However, after these years of development, the vast majority of these projects do not seem to show a crushing advantage over their "centralized" competitors.

On the contrary, I saw another phenomenon worth noting: when these projects developed, they basically did not use "idle resources", but used brand-new resources. How many of us actually use their unused second-hand hard drives, second-hand XX,... to participate in the mining of the project? I'm afraid they are more likely to purchase new equipment with stronger performance and higher advantages to participate, right?

This not only fails to improve the utilization of existing resources, but also creates more "idle resources" in the future.

In terms of improving the utilization of existing resources, they are not as good as Didi Taxi. Didi's efficiency in utilizing idle resources (idle cars) exceeds that of most DePIN projects in the encryption ecosystem.

If the improvement of resource utilization through decentralization is not outstanding in the practice of most projects, then what is the real significance and comparative advantage of the DePIN project?

Is this business idea unworkable or is there something wrong with the current technical solution?

For these questions, the DePIN projects that emerged in 2017 did not answer well. I think the large number of new projects that have emerged now do not give very clear answers, or at least the ideas are similar to those of past projects. There is no essential difference.

Of course, among the many DePIN projects, some have made bold explorations and proposed new ideas and new plans. These innovations are worth noting, but whether they can achieve the desired results during the implementation process It remains to be tested.

I often emphasize this point of view:

When a new track or a new project is just born, if the public thinks that this track and this project are worth looking forward to, then On the contrary, I will be more cautious, because there is a high probability that this expectation will fail or will be realized, but it is likely to be realized in a way that we can't imagine at all.

Take the two projects Arweave and Filecoin. When Arweave was launched, it was deserted and received very little attention, but Filecoin was full of aura and attracted a lot of attention even before it was launched. We have all seen the subsequent results.

Similarly, for the DePIN track, which is now "exploding" again, I certainly expect it to really explode. But so far, I always feel that most projects still don’t have much essential innovation. What I see in them is more the halo of capital support and innovation in conceptual application, rather than substantial breakthroughs.

Of course, the above questions will most likely not affect the ability of token holders of these projects to make money in the next bull market. But there is a huge difference between making quick money and discovering real long-term projects. Making quick money is a game, but discovering real long-term projects is to improve your thinking level and discernment ability.

I always expect myself and our readers to remain calm and independent while participating in the game.