Recently, I have devoted some of my energy to the AI+DePIN track, and I have a feeling that this will be the value narrative main uptrend that will drive this round of the bull market. Old DeFi protocols, NFTs, emerging public chains, and many underlying technological innovations are all moving towards DePIN. In this article, which originated from the author’s online observations, I will share a few of my logical thoughts:
1) How to understand the concept of DePIN? Simply put, traditional CePin networks, such as servers, sensors, and communication networks, rely on centralized computing clusters like AWS and Alibaba Cloud to operate, which is 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. This allows some small and medium-sized enterprises to access and utilize network resources in an affordable way.
2) Some people say that this is just a rebranding of previous “hardware device mining” narratives like FileCoin, Chia, and Arweave. Yes, that’s true, but not entirely. This round of the bull market has added the variable of “AI”. Decentralized storage has demand, but it is not a strong and urgent demand. It may be mixed with some pseudo-demands, such as data storage and access. Although it can solve the storage demand, the unstable network distribution and node efficiency execution make it difficult to support real-time applications such as online video and gaming.
With the introduction of AI, AI large-scale model training becomes a rigid demand. I have consulted some small and medium-sized AI companies that do AI model training, and they find that the server hardware and configuration costs of platforms like AWS are not friendly to small and medium-sized AI companies. If DePIN can utilize GPU and other hardware devices in the supply chain cloud services or mobilize the entire network to construct infrastructure networks, there will be strong demands for large-scale model training, distributed machine learning, data storage verification mining, and decentralized inference. If DePIN can start with the wind and be primarily driven by the AI track, there may be some projects that rely on PPT narratives initially, but in the long run, the projects that can be implemented will not be too bad.
3) It is highly probable that AI+DePIN will take on the role of the previous DeFi Summer and become the value narrative main uptrend of this round of the bull market. This explains why after BTC rises, MeMe rises, while the expected old DeFi has been relatively quiet. Whether it is because of the focus on new projects rather than old ones or the heavy burden caused by the poor expectations of the previous DeFi landing, the key is still the lack of a narrative opportunity that can drive the integration of on-chain and off-chain funds.
There is no doubt that in the previous bull market, NFTs reshaped the digital art market and brought in traditional users and funds. In this round of the bull market, AI+DePIN may play a similar role.
Does this mean that old DeFi has no chance? Not at all. In my opinion, this is actually an opportunity for the traditional old DeFi to undergo reshuffling and reshaping:
1) On the public chain side: In the previous DeFi wave, it was too constrained by the EVM environment. The EVM-compatible narrative made the differences between chains smaller and increased the possibility of interconnection. However, the application ecosystem has yet to be fully realized. Therefore, the first thing AI+DePIN needs to do is to “de-EVMize,” allowing some high-performance chains to emerge and give birth to killer applications, such as Solana, Sui, Aptos, etc. Especially on SOL, there is already a group of unique developers, and whether this wave of AI+DePIN can directly determine SOL’s mainstream position in this round of the bull market depends on it.
The slogan of surpassing Ethereum has been shouted, and whether it can be achieved depends on the landing of the AI+DePIN narrative on SOL. Recently, I came across projects like @ionet_official, which already have high valuations, but after experiencing it, I was pleasantly surprised. I feel that it could be a potential force that will ignite DePIN.
2) On the DeFi protocol side: Vitalik recently mentioned AI + blockchain, which essentially guided an entrepreneurial direction: AI+intent DeFi transactions. Obviously, being able to evolve smart contracts into super smart contracts that lower user thresholds, increase user interaction experiences, and reduce transaction friction across chains is the direction where intent transactions truly want to exert their strength. Therefore, it is crucial for old DeFi to quickly advance the intent transaction model + wallet front-end upgrades and be able to integrate into the main uptrend narrative of AI+DePIN without falling behind. There are already many innovative projects in this DeFi space, and I would like to remind you that the intent-centric narrative is not over yet; it just needs a project that combines AI and can be practically implemented to appear.
3) Other technological innovations: The current web3 innovation environment is already quite mature, and the product and innovation power of web2 has long been integrated. As a result, a series of narratives such as “modularization” and “chain abstraction” have emerged, all aiming to solve the problems of low inter-chain interaction efficiency and high collaboration costs in the web3 environment. The direction is good, but these micro-innovations have not truly exploded due to the slow development of existing chains.
Taking ZK technology as an example, many people say that ZK is the ultimate solution, but currently, ZK only solves the problem of trust in the interaction between the main chain and the side chain. In fact, ZK can enable asset transfers between all EVM and non-EVM chains. The true value discovery of ZK is yet to come. Recently, I have been paying attention to a project called @ProjectZKM, which has implemented multi-chain interoperability at the underlying level of ZK technology. Coupled with its hardware acceleration and other DePIN designs, it is very likely to find a key position in the new wave of DePIN narratives.
Note: This article briefly elaborates on some logical thoughts about the potential of AI+DePIN. They may not all be correct, but they are based on the thinking of value investment research and the mature evolution trends of the industry. It does not include the emotional elements of FOMO in the secondary market. The above content is for reference only, and I also welcome constructive criticism for mutual learning. [img]