The Past of DePIN Before Helium: Bitcoin, Arweave, and STEPN
This article is sourced from an article written by Zuo Ye titled “The Past of DePIN Before Helium: Bitcoin, Arweave, and STEPN,” compiled, translated, and written by DeepTech.
Summary:
Helium’s ecological token has been skyrocketing! MOBILE, IOT, HNT, and DATA are all up 90%.
Background:
Helium Mobile fights against “professional mining and selling”: rewards for MOBILE tokens can only be claimed after eight days of subscription.
Table of Contents:
Messari Review: The Origin of the Archaeological Name DePIN
The Sanctity of Physical Hardware
Arweave&FIL: Long-termism VS Short-term Speculation
Helium represents a dedicated DePIN narrative, but before that, there were at least three important contributions that, together with dedicated hardware, formed the main part of the next DePIN narrative.
The Sanctity of Physical Hardware: Bitcoin and PoW Mechanism
FIL&AR: Ordinary Hardware + Web3 Incentive Layer
STEPN: Out-of-Bounds Mechanism + “Expected Cash Flow Discount” Selling Mechanism
Helium’s resurgence didn’t happen in December but in July when it was listed on Coinbase. Before that, DePIN received some attention from the market, but Helium had suffered from falling prices and successive complaints from miners, leaving a lingering feeling of uncertainty.
Today, discussing Helium is inseparable from 5G mobile plans, which has successfully attracted users with real needs, rather than merely treating it as a financial game. It requires a sufficient number of users to form a large enough community of holders to counteract the impact of selling pressure. The rumored Martian and Sun brothers’ exchange is essentially a variant of selling pressure and redemption.
Analogous to the relationship between StepN and various X2E projects, the DePIN (Decentralized Physical Infrastructure) name preceded the project that combines “IoT/ICT/AIoT + Chain Upgrade.” Helium plays a pivotal role in this process. If Helium were to fail, DePIN would have a hard time recovering. However, as Helium continues to struggle, newcomers only need to make slight improvements to survive:
Micro-innovation: Improving on the leading Helium project, similar to how WiFi is an improvement on 5G, or satellites on the ground.
Changing scenarios: Adapting the Helium model to different fields, such as VPP (Virtual Power Plant) Starpower or green energy Arkreen.
To fully understand the DePIN name, we need to continue exploring actual projects. The most important aspect of DePIN is the hardware, not the blockchain (software), so a rough division includes both hardware and blockchain:
2007/8/9: Various Bitcoin mining machines were developed, evolving from personal CPUs to ASICs, establishing their reputation as power consumers.
2014: The Filecoin model was introduced, gradually attracting attention from Huaqiangbei. The price has been rising, and its relationship with the original design of data storage has become less important while its relationship with mining and earning coins has become more significant.
2017: The establishment of IoTeX, although not particularly prominent among many public chains at the time, is more of a remnant of the frenzy of chain upgrades. It is now mentioned purely by coincidence.
2021: Helium reached its all-time high of $50, although it is not as high as Ethereum in the same era. Comparing it to Ethereum now reveals its formidable nature.
End of 2022: Messari officially categorizes it as DePIN. Messari categorizes it into four main sectors: server networks, wireless networks, sensor networks, and energy networks. It is essentially a combination of off-chain data generation and on-chain data confirmation, with the core being proof of rights and economies of scale. It does not place high demands on anonymity, decentralization, and extreme “full-chain execution.”
Furthermore, the classification within is overly complex. For example, although decentralized databases (DDB) also involve hard drives at the underlying level, the relationship between modern databases and underlying hardware has been greatly decoupled. The forced classification raises doubts about its purpose of meeting the word limit.
In my opinion, to meet the requirements of DePIN, there are two types: first, customized dedicated hardware, such as Helium; second, dedicated incentive layers that transform or incorporate commonly used hardware into the Web3 network, such as Render Network, which allows individuals to sell their idle GPUs to others.
Although Bitcoin has long been criticized for its energy consumption, when viewed from another perspective, it establishes a benchmark pricing effect. The consumed electricity represents the burning of civilization, and one unit of electricity is a beam of light shining on the value of Bitcoin.
As Ethereum transitions to PoS, the debate has become more intense. Environmental friendliness is not only correct but also politically correct. However, PoW (specifically the work done by physical hardware) possesses advantages that PoS cannot generate – a connection to the physical world and the ability to migrate that connection.
Although OFAC may not necessarily control the Ethereum network, it certainly cannot control the Bitcoin network. This is the difference between the two. I call it the sanctity of physical hardware. Under the dominance of virtualization technology, only Bitcoin can persist.
Secondly, the recognition of the great power of creating incentives based on existing physical hardware by FIL&Arweave is evident. FIL’s madness doesn’t need much explanation. If you’re interested, you can find a miner and listen to their bitter tears about the miserable history of being repeatedly harvested by FIL.
The importance of Arweave has been overlooked in the market for a long time. In my opinion, AR represents a classic model where a not-so-successful project can survive. Although AR has recently made headlines due to its internal conflicts, it has a significant difference in terms of node quantity, network scale, and stored data compared to FIL. However, AR can still survive because the current Web3 is still a realm of niche demand and a large amount of hot money, and the maintenance cost is not high.
As long as the project is not overly extravagant, most projects, especially public chain-level projects, can survive.
The challenge lies in breaking through. In this aspect, Helium successfully “harvested” a group of old miners. Now, what is trending is Helium 5G, not the earlier Helium WiFi model. The only project that has successfully transitioned to Web 2, apart from Bitcoin, is likely STEPN. STEPN and DePIN, as well as Bitcoin mining machines, are similar in that they involve “expected cash flow discount + hardware targets.” The only difference is whether it’s a mining machine or a pair of shoes.
However, there is a universal principle: the pricing of DePIN mining machines at $99, $999, or $9999 is certainly not due to the high technical content of Huaqiangbei. It’s because miners expect a short payback period or a long passive income. This is not similar to the STEPN model but completely consistent. However, STEPN has one difference compared to dedicated DePIN hardware: fitness is not only a demand for the Web3 community but also a large market worldwide. Even without income, there is a need for fitness.
STEPN: Fitness market, providing additional incentives beyond regular fitness activities.
Dedicated DePIN: Web3 mining market, mining coins or selling hardware for a single purpose.
General-purpose hardware + additional incentives: Able to speculate on FIL or gradually attract attention to Arweave.
This is not to promote any particular model but to emphasize the importance of understanding one’s own needs before participating in mining or speculation. If there is a genuine need for fitness, it is not too late to participate in STEPN. If you spend $999 to buy Web3 WiFi, the risk is yours because normal people wouldn’t do that.
Related Reports:
What is DePIN? Decentralized Hardware Leads the New Data Economy
Is DePIN the Dark Horse in the Next Web3? Hear what the Leading Projects Say
Drive to earn? In-depth analysis of the business model of DePIN project Dimo
Tags:
Arweave
DePIN
FIL
STEPN