The well-established DeFi protocols, NFT, emerging public chains, and many underlying technological innovations are all moving towards the direction of DePIN.

Author: Haotian

Recently, I have devoted some of my energy to the AI+DePIN track and have a feeling that this will be the driving force behind the value narrative of this bull market. Established DeFi protocols, NFT, emerging public chains, and many underlying technological innovations are all moving towards the DePIN direction. Next, I will share a few of my thought processes:

1) How to understand the concept of DePIN: Simply put, traditional CePIN servers, sensors, communication networks, and other physical infrastructure networks require centralized computing power services such as AWS and Alibaba Cloud to operate, which is too costly for many small and medium-sized enterprises.

DePIN uses blockchain tokens as incentives to allow users with "hardware devices" to establish large-scale collaborative relationships of physical devices, forming a service-capable infrastructure network, enabling small and medium-sized enterprises to access and use network resources economically without the need for high investment costs.

2) Some people say, isn't this just the narrative of "hardware mining" from the previous bull market, such as FileCoin, Chia, Arweave, etc.? Yes, but not entirely. This bull market has added the "AI" variable.

Decentralized storage has demand, but it is not a strong demand, and it may involve some pseudo-demands, such as data storage access. Although it can solve storage needs, the unstable network distribution and node efficiency in operation make it difficult for some real-time demanding applications such as online videos and games to be implemented.

With the introduction of AI scenarios, AI large model training will become a very rigid demand. I consulted some small and medium-sized AI companies that do AI model training, and the hardware and configuration costs of servers like AWS are not friendly to small and medium-sized AI companies.

If DePIN can enable GPU and other supply chain cloud services or mobilize the hardware devices of the entire network to form an infrastructure network, strong demands will be generated for large model training, distributed machine learning, data storage verification mining, distributed reasoning, and so on. If DePIN can rise with the wind in this round, it will mainly rely on the driving force of the AI track. At the beginning of this process, there may also be some projects based on a mere PPT narrative, but in the long run, the projects that can be implemented will not be too bad.

3) Most likely, AI+DePIN will take on the role of the previous DeFi Summer and become the main value narrative of this bull market. This explains why after BTC rises, MeMe rises, and the old DeFi that everyone is looking forward to remains quiet. Whether it's about trading new or old, or the heavy baggage caused by the poor expectations of the previous DeFi landing, the key is still the lack of a narrative opportunity that can drive the mixed linkage of funds inside and outside the industry.

Undoubtedly, in the previous bull market, NFT reshaped the digital market for artists and brought in traditional users and funds. This time, AI+DePIN may play a similar role.

Does this mean that the old DeFi has no chance? Not at all. In my opinion, this is precisely an opportunity for a reshuffle and transformation of traditional old DeFi:

1) Public chain aspect: In the previous DeFi, it was too constrained by the EVM environment, and the EVM-compatible narrative made the differences between chains smaller and the possibility of linkage greater. However, everyone is still working on chain infrastructure, and the application ecosystem has yet to land.

Therefore, the first thing that AI+DePIN needs to do in this round is to de-EVM-ize, allowing some high-performance chains to emerge, thereby giving birth to some killer applications, such as Solana, Sui, Aptos, etc. Especially on SOL, there is already a group of distinctive developer forces. Whether AI+DePIN can emerge directly on SOL will directly determine SOL's mainstream position in this bull market.

The slogan of challenging or surpassing Ethereum has been shouted out, and whether it can be achieved depends entirely on the landing of the AI+DePIN narrative on SOL. Recently, I came across projects like io.net, whose valuation is already very high, but after trying it out, I was a bit surprised and felt that it might unleash the potential power of DePIN.

2) DeFi protocol aspect: Not long ago, Vitalik talked about AI+ blockchain, which actually guided an entrepreneurial direction: AI+intent DeFi trading. Obviously, being able to evolve smart contracts into super smart contracts, encompassing demands such as reducing user thresholds, increasing user interaction experience, and reducing cross-chain transaction friction, is the direction where intent trading truly wants to make an impact.

Therefore, whether old DeFi can quickly advance the intent trading model + wallet front-end and a series of upgrades is crucial. By seizing this direction, it can be integrated into the main narrative of AI+DePIN without falling behind. There are already quite a few projects innovating in this type of DeFi. I would like to remind that the intent-centric narrative has not ended; it's just waiting for a project that can combine AI and actually land.

3) Other technological underlying innovations: The current web3 innovation environment is already very mature, and the product and innovation power of web2 has long since permeated. As a result, a series of narratives such as "modularization" and "chain abstraction" have emerged, all aiming to solve the problems of low efficiency in inter-chain interaction and high collaboration costs in the web3 environment. The direction is good, but constrained by the slow development of old chains, these micro-innovations have not truly exploded in potential.

Take ZK technology as an example. Everyone says that ZK is the endgame, but currently, ZK only solves the problem of trust in inter-chain interaction between the main chain and side chains. In fact, ZK can enable all EVM and non-EVM chains to achieve asset transfer with mutual trust. The true value of ZK is yet to be discovered. Recently, I have been paying attention to a project called @ProjectZKM, which has implemented ZK technology to achieve multi-chain interoperability, and combined with its hardware acceleration, it is very likely to find a key position in the new wave of DePIN narratives.

The above.

Note: I have briefly explained several thought processes that I believe AI+DePIN has great potential. They may not all be correct, but I am more inclined to deduce based on the value research and the mature evolution trend of the industry, without adding emotional elements of FOMO in the secondary market. The above content is for reference only, and I welcome feedback and mutual learning.

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