What are DePINs?
DePINs leverage blockchain-based distributed ledger technology (DLT) to create decentralised, transparent, and tamper-proof systems for managing physical assets. They sit at the convergence of crowdsourcing, the gig economy, AI, and Web3 which is built on decentralised blockchain.
Crowdsourcing accesses a crowd of contributors willing to respond with ideas and suggestions, or offers of help, in response to competitions, challenges, or gig economy work opportunities.
For many people the gig economy is a useful side hustle to earn a secondary income. For others it can be the main income source, such as for Airbnb hosts managing multiple properties, ride sharing car owners, or “last mile” delivery drivers completing online purchases.
AI and blockchain technology provide additional features to what we have come to recognise as “traditional” online crowdsourcing and gig economy opportunities, e.g. open invitation challenges; work accessed through platforms including Mechanical Turk, Upwork, Fiverr and Roamler; and sharing personal resources through the likes of Airbnb and Uber.
Payment can be automated through smart contracts, with payment triggered by receipt of data that represents task completion, confirming when predetermined terms and conditions have been met. This transparency creates trustless transactions in which all stakeholders know the terms under which payment will be definitely made.
This blog gives some examples of DePINs, and then looks at how the DePIN model is being used to run major city infrastructure on a smart city basis.
DePIN examples
DePINs create a network for physical things, allowing people to share resources directly with other users without requiring an intermediary.
JustPark is a UK crowdsourcing platform that connects motorists needing a parking space with homeowners willing to make their private driveways available. A newer example along similar lines, now categorised as a DePIN, is PowerPod. This is a US platform that connects motorists who need to charge their electrical vehicle with a decentralised network of owners of private chargers. This demonstrates the evolution from crowdsourcing to “crowdsourcing plus” through DePINs.
Image source: PowerPod
By being rewarded with crypto-style tokens, the PowerPod charger owners are able to create an income stream, comparable to working in the gig-economy as an Airbnb host or an Uber driver. The concepts are similar, the difference is that on top of crowdsourcing and gig economy principles, DePIN startups like PowerPod have Web3 sites incorporating blockchain technology to manage smart contracts and make the crypto payments.
Image source: NATIX DePIN
DePINs can involve using more common everyday devices than EV charging points. NATIX is a ground-breaking entry into the multibillion-dollar geospatial data market that lets anyone with a smartphone camera provide geospatial data (images) in exchange for $NATIX tokens. This market is highly valued because much of the data is held behind intellectual property paywalls, accessed through expensive subscriptions. NATIX is democratising access to data for all its users. What was previously termed as crowdsourcing data from a network of gig economy workers is now a DePIN due to the blockchain smart contract overlay. Data is updated in real-time to include roadworks, accidents, even the location of speed traps.
Established projects such as Helium allow individuals to earn cryptocurrency rewards by hosting hotspots that enable IoT device connectivity. This distributed physical network model democratises access to wireless networks, fostering innovation in smart cities, agriculture and logistics.
Bitcoin is considered by some to be another good example of a DePIN. It relies on a physical network of miners to “mint” a decentralised monetary system that exists on blockchain which is outside the control of governments or banks.
From smartphone images to city infrastructure
Physical infrastructures such as transport systems, energy and water supply networks, and public utilities are usually centrally managed. The public relies on governments, private corporations, or public utility companies to act as a single entity and oversee, operate, and maintain delivery of these essential services.
However, such centralised control can often bring inefficiencies, higher operational costs, a lack of transparency in decision-making processes, and these days they also provide a focal point for ransomware cyber attacks.
The possible collapse of the UK’s Thames Water, a company which supplies a quarter of the country’s homes with water and sewage services, is a topical example of inefficiencies and opaque financial protocols. Despite three decades of customers paying their bills, Thames Water has inadequate funds to stay in business, let alone update its crumbling infrastructure, mainly because of paying excessive dividends to shareholders.
Unlike centralised systems such as Thames Water where a single point of control manages operations, a DePIN utilises AI, smart contracts (self-executing agreements with pre-defined rules embedded in blockchain code) and distributed nodes (a communication endpoint) to automate and govern infrastructure processes based on data. In a DePIN setup, infrastructure systems such as energy grids or transportation networks are connected to a blockchain network, which records every action or transaction on an immutable ledger. This can include financial performance.
A DePIN therefore offers a solution by decentralising the control and management of such physical infrastructures through blockchain technology. AI-driven and data-led decision-making through smart contracts can improve efficient use of resources. Along with greater transparency over spending to reduce fraud, corruption and inefficiency, DePINs can build greater trust and confidence among stakeholders – principally providers and users.
Growing use of IoT technology will improve the real-time data available on energy or water usage, traffic congestion and journey times, air pollution levels, hospital bed availability, even the availability of parking spaces. Dynamic pricing is then one way to steer user behaviour to restrict use of resources when supplies are low and boost demand at cheaper times of abundant supply.
Decentralised control can also broaden the ways infrastructure responds to a population’s requirements, making it more accountable. Homeowners or small companies that generate sustainable energy, for example, will be able to far more easily sell their surplus to the national or a locally organised grid system.
Smart City DePIN Examples
It’s one thing to base energy, transport and water supply infrastructure in new futuristic cities on DePIN principles at the design stage. For example, Woven City, near Mount Fuji in Japan, is a real-world laboratory experiment mounted by the Toyota Motor Company. The city will be fully connected, with homes, buildings, and streets wired with IoT devices. It’s another matter to incorporate DePIN principles in to established cities. Nonetheless, there is a growing list of impressive examples.
Barcelona, Spain
Barcelona is incorporating crowdsourcing and blockchain into its energy grid to improve efficiency and reduce its carbon footprint. Its decentralised energy network enables residents to sell surplus energy from their renewable sources, such as solar panels, back to the grid. This creates a decentralised market in which energy is traded in real-time based on supply and demand, and blockchain ensures transactions are secure, transparent, and recorded immutably.
Decentralisation of energy grids also provides opportunities to startups who can accelerate the process. The Barcelona-based energytech startup Bamboo Energy coordinates distributors and consumers in a bidirectional energy flow in which the consumer can at the same time be a producer – a prosumer – and choose the best moments to buy and sell energy.
Perth, Australia
Image source: Powerledger
The Australian tech company Powerledger, based in Perth, provides a significant example of DePIN in action. Powerledger’s blockchain technology enables homeowners with solar panels to sell their excess energy directly to their local neighbours in a peer-to-peer energy market, or to the wider grid. Powerledger’s model has been adopted by several other Australian cities, and internationally, and there are schemes for property developers and commercial building owners.
In October 2024 Powerledger announced it will halt its own SVM blockchain, and expand its POWR token into the Solana ecosystem as a native SPL token. Solana is a blockchain platform which uses a proof-of-stake mechanism to provide smart contract functionality.
San Francisco, USA
Most cities around the world have been unable to invest in enough electric vehicle charging points to match the take-up of electric vehicles. Concerns over running low on power and difficulties of recharging are holding back EV sales, hampering the delivery of air pollution and CO2 reduction targets.
Owners of private EV charging stations living in San Francisco can list their location on a blockchain platform, allowing EV drivers to find and use available charging stations across the city. All charging sessions and payments are recorded on blockchain, ensuring transparency and security. Smart contracts handle payments between the charging station owner and the vehicle owner, with no need for a central intermediary.
Planning permissions and approvals have been eased to encourage more people to install roadside charging points on non-commercial use routes. This could create a gig economy income stream. Greater access to chargers will also encourage residents who do not have off-road parking to join the transition to electric vehicles.
Singapore
Singapore is a major global logistics hub, and has been incorporating blockchain technology into its supply chain management systems to enhance transparency and efficiency. The Singapore Government Blockchain Initiative is using DePIN to decentralise logistics operations, ensuring that goods moving through the city’s ports are tracked securely, speedily and transparently.
What’s more, Singapore hosted a DePIN Day in September 2024, which examined multiple other uses of the DePIN model.
Los Angeles, USA
Los Angeles has faced air pollution challenges for decades, and blockchain is now being used to decentralise air quality monitoring efforts throughout the city. Los Angeles has been deploying IoT sensors to monitor air quality in real time. These sensors are connected to a decentralised blockchain network that records data on pollution levels, humidity, and temperature.
Decentralizing air quality data helps the city ensure that the information collected is accurate, secure, and accessible to the public. Residents can use the data to monitor the air quality in their specific neighbourhoods and take preventive or avoidance measures. City officials can also use the data for better decision-making about traffic management, zoning, and public health interventions to reduce pollution levels.
Benefits of DePINs
DePINs enable direct interaction and collaboration between infrastructure providers and consumers instead of relying on centralised authorities.
Crypto rewards for contributions to a DePIN network form a compelling incentive for individuals to invest in, maintain and utilise infrastructure that improves the lives of stakeholders.
Blockchain records of all activity, plus automated sharing of rewards, ensures openness and confidence between stakeholders who know that everyone is following the rules. Smart contracts linked to IoT data automatically execute transactions when required criteria are met, ensuring everything runs smoothly and transparently.
To protect against cyber threats, DePIN security protocols and encryption secure sensitive data, such as infrastructure configurations and any unauthorised changes to the infrastructure’s operational data. This is like having secure locks to protect the community’s shared resources.
DePINs demonstrate a blockchain-based future of decentralised crowdsourcing.
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