AI And NodeFi Expected To Drive Growth In Decentralized Finance

According to Cointelegraph, AI and the emerging 'NodeFi' market may become the most active verticals in the decentralized finance sector, as per a report by Ethereum blockchain analytics platform Nansen and lending protocol MetaStreet. The report, published on Oct. 14, suggests that cryptocurrency markets are evolving beyond their initial focus on ERC-20 tokens and DeFi, with these dominant technologies expected to eventually plateau. Emerging blockchain-based verticals, such as distributed computing and GPU-as-a-service programs, are anticipated to show significant growth as the generative AI industry matures. The report highlights decentralized physical infrastructure network (DePIN) projects as having the greatest potential for growth. DePIN projects encompass decentralized energy distribution, data storage, distributed computing, and GPU-as-a-service programs. Research from Fortune Business Insights indicates that the market for distributed graphical process units (GPUs), also known as GPUs-as-a-service, was valued at $3.2 billion in 2023. The primary use case for GPU-as-a-service clusters is to train artificial intelligence models, suggesting that demand is likely to increase in 2024 and beyond. The report states, 'Overall, AI-related compute DePIN appears to be in a prime position to become the next major vertical, with a sizeable and fast-growing market, high yield potential, predictable asset prices, and comparatively low implementation complexity.' Despite leading firms potentially being years away from profitability, the generative AI boom has led to substantial investments throughout the AI technology stack. While there is no guarantee that blockchain-based projects will secure the majority of investments, the intersection between AI and blockchain appears to have significant long-term potential. Additionally, the report notes that the NodeFi vertical, an incentivization market for node operators, may also experience growth. However, unlike the AI sector's rising tide, NodeFi's viability is project-dependent.