Slow Burn
Why Does DePIN Matter?
At Slow, we conceive of crypto’s progression in three “eras”:
Era 1 marked the immaculate conception of Bitcoin post 2008, and the introduction of internet-native money.
Era 2 focused on “just making the infrastructure work” and enabling developers globally to begin experimenting on general-purpose blockchains, such as Ethereum and Solana.
Era 3, our current epoch, will be defined by “making the infrastructure useful,” which requires apps (and supporting infrastructure) that serve the real world and real users.
Our optimism about the utility of RWAs (real-world assets) and games is well-documented. In the next few weeks, we’d like to introduce and explore another theme we believe will be important to Era 3: decentralized physical infrastructure networks (DePIN).
Framing DePIN's potential requires acknowledging how disjointed and uncoordinated real-world networks are today. For example, power grids consistently struggle with capacity limitations at peak hours, cellular & wi-fi coverage is spotty or non-existent in many areas, “IoT” networks require massive capital expenditure, and, in the age of AI, GPU inventory already constrains the speed of innovation. In the abstract, DePIN helps to connect, align, and catalyze the disparate fragments of physical networks through on-chain incentives and access points.
Early implementations of DePIN have shown progress in:
(1) Solving the cold start problem for capital-intensive networks where expensive specialty hardware is needed at scale.
(2) Mobilizing latent resources and coordinating them to augment existing networks.
If successful at scale, these efforts should, in theory, mature physical networks that struggle with economics at inception. Most importantly, DePIN can fortify physical networks that would benefit materially from the decentralization that secures their on-chain counterparts. Looking ahead, we’re excited to dive into learnings from DePIN experiments and investigate how they’re “making infrastructure useful.”
About Slow Burn
Weekly explorations into emerging crypto trends and how to navigate 2023 from the Slow Crypto Team, Sam Lessin, Clay Robbins, and Caroline Cline.