DePIN L1 Blockchain Landscape

Decentralized physical infrastructure network (DePIN) projects provide a crucial bridge for blockchain networks toward real-world value by creating more than chains and tokens: by improving modern society's foundations through this technology.

In the gold rush, the makers of picks and shovels (IE: the critical mining infrastructure) stood to gain the most, not the gold miners: history is likely to repeat itself in the third iteration of the web. 

Today, the combined market cap of DePIN projects stands at over $22bn. Analyst houses Escape Velocity (EV3) and Messari attribute this value to DePIN’s focus on utility rather than the speculative nature of, for instance, Memecoins. 

The number of these projects grows constantly - Depin.Ninja puts the number at over 1500 - and a comparative analysis of the top chains in the space is well past due. To that end, today the Minima team is publishing (part 1 of) a comprehensive overview of DePIN’s best and brightest Layer 1 blockchains.

We’ll evaluate these blockchains based on their:

• Decentralization & Security 
• Network Participants
• DePIN Use cases
• Consensus Mechanisms
• Storage Mechanics
• Node Operator Requirements 
• Tokenomics 

In no particular order, here are the major DePIN blockchains and how Minima stacks up at the end. We’ll also look at how modular infrastructure like Minima’s can impact DePIN projects. 

IoTeX

With the recent launch of the IoTeX 2.0 whitepaper on July 24th 2024, it’s a great time to see how this project is handling our chosen criteria. IoTeX provides modular infrastructure for DePIN projects.

• Decentralization & Security - since November 2020, IoTeX has been operated by decentralized community governance through the IoTeX Governance Working Group. IoTeX emphasizes the security of user data on its blockchain through ZK proofs and homomorphic encryption. 

• Network Participants - IoTex is casting a wide net with 2.0, broadly claiming to be “DePIN for everyone”, their focus has shifted from being an L1 for small teams and projects to infrastructure for, well, everyone. What this means in practice remains as the original set of participants: validators/delegators, app builders, and users. 

• DePIN Use Cases - inclusive of but not limited to Tokenizing IoT devices for data monetization and sharing and creating decentralized sensor networks for environmental monitoring and data collection.

• Consensus Mechanism - IoTeX uses Randomized Delegated Proof of Stake for its consensus mechanism: 24 of 36 community-voted delegates are responsible for validating the entire blockchain in exchange for rewards. This may harm its decentralization efforts in exchange for speed and scale.

• Storage Mechanics - IoTeX uses its tech to create a secure “machine-to-machine” (M2M) decentralized data exchange and marketplace. 

• Node Operator Requirements - In theory, anyone can run an IoTeX node, but in practice, they must meet several requirements: 1) have their identity registered 2) Self-stake at least 1,200,000 IOTX 3) Receive at least 2,000,000 total delegate votes 4) Adhere to high (for an end user) minimum hardware requirements. 

• Tokenomics - IoTeX balances its tokenomics between validator and user rewards/incentives and utility beyond inflationary and deflationary mechanisms. In 2.0, this includes re-staking IOTX. 

peaq

As a parachain, we’ll use peaq as an example of project-specific blockchains integrated with Polkadot and Kusama. peaq is an interoperable layer-1 for DePIN.

• Decentralization & Security -  As a parachain, peaq inherits it’s security from the Polkadot main chain which currently has 297 validators.

• Network Participants - a DePIN blockchain for RWA projects, peaq’s network participants are primarily EVM-compatible builders but also include individuals, vehicles, devices and even robots.

• DePIN Use Cases - peaq lists its major uses cases across four key areas: land, sky, sea and space. These include DAO-governed Robo-farms, electric boat charging, drone internet and satellite internet, respectively. 

• Consensus Mechanism - peaq combines Delegated Proof of Stake with Polkadot’s Nominated Proof of Stake for first and second finalizations, respectively. Data from peaq network’s Agung testnet - the project is in  pre-mainnet stage - suggests just under 3000 active wallets. The Krest “Canary network” has over 12,000 holders. There are no specifics about nodes at this point in time. 

• Storage Mechanics - peaq uses a system of decentralized data storage called Pallets for secure access.

• Node Operator Requirements - Collators generate proofs, whilst Delegators ensure finality. Both receive rewards. Collators must meet modest hardware requirements, Delegators must join the Delegator set.   Requirements mean that nodes cannot be run on small devices. All data is processed remotely.

• Tokenomics - peaq’s utility token use cases extend beyond the usual trifecta of fees, governance, and staking into building reputation and trust systems for the machines on the network, highlighting which will be “critical” participants. 

Solana 

A narrative-agnostic blockchain, Solana has increasingly found itself providing the infrastructure for DePIN projects such as Helium, and with the upcoming Firedancer upgrade, this is likely to continue.

• Decentralization & Security - Solana expands upon its decentralized Proof of Stake consensus mechanism with Proof of History, which creates a verifiable record of the passage of time for enhanced speed, scale and security.

• Network Participants - Solana’s primary network participants are node operators (stakers), developers and users.  This Dune Analytics dashboard tracks the number of Solana validators at just under 4000 (3933) with this breakdown of validator market share suggesting that large validators may be contributing to a centralization problem for Solana: Coinbase & Binance operate two of the largest validators.

• DePIN Use Cases - Solana is able to power DePIN use cases such as Helium’s wireless connectivity, decentralized compute power through Render Network and more. DePIN projects choose Solana because of its speed and scalability. 

• Consensus Mechanisms - Solana utilizes the Proof of Stake consensus mechanism and has restaking support, enhancing the flexibility and security of its apps and appeal for developers. 

• Storage Mechanics - Solana features highly customizable NFTs that can store data, along with data and program accounts which separate the data from the logic that interacts with the data. 

• Node Operator Requirements - to run a Solana node, a validator must meet hardware requirements but also enough SOL tokens to participate in consensus through a vote account. 

• Tokenomics - known as the Ethereum-killer due to its novel Proof of History powered consensus, Solana uses the SOL token for validator rewards and gas fees on the network, and when interacting with dApps. 

Soarchain

A layer-1 DePIN blockchain for building and connecting apps for vehicles, Soarchain creates incentivized app networks through the Cosmos SDK.

• Decentralization & Security - Soarchain creates and shares vehicle data through smart contracts, creating an ecosystem of decentralized apps. Beyond the security benefits offered by blockchain technology, Soarchain protects individuals’ data privacy through strict access control, allowing them to choose what to share and what not to. 

• Network Participants - Soarchain is for road users (vehicles), three types of nodes (challenger, validator and runner), ecosystem developers and the industries that stand to benefit from using Soarchain.  

• DePIN Use Cases - Soarchain is creating a community-driven, cost-effective network of in-car dApps that offer services including road safety through a device. 

• Consensus Mechanisms - Soarchain uses Vehicle-to-Network Proof of Availability as its consensus mechanism. This mechanism manages consensus by requiring Soarchain devices to respond to challenges issued by challenger nodes - with token rewards for accurate and honest responses. 

• Storage Mechanics - no entity on Soarchain collects or stores data, instead data remains off-chain and is accessed through cryptographic signatures on-chain.

• Node Operator Requirements - Soarchain requires the installation of both a Mini or Pro device and iOS or Android software. Full validator nodes have modest hardware requirements. 

• Tokenomics - $SOAR is a utility token for both distributing rewards for network participation and paying gas fees. It is an inflationary gas token and used to power Soarchain smart contracts. 

How Modular Infrastructure Boosts DePIN Projects

A principle tenet of web3 is the collaborative, community-driven nature of projects and platforms within the ecosystem. DePIN is no different, and Layer1 blockchains like Minima are able to offer three key benefits to builders in the space:

1. Speed - ready made modules cut development time.
2. Affordability - the cost of building and transacting are much reduced.
3. Value - cross-chain and cross-project builders can all contribute to the creation, capture and distribution of value. 

Empowered to pick and choose infrastructure layers, DePIN projects can grow faster than those built from the ground up.

Minima - The Embedded Blockchain‍

We will evaluate ourselves in the same way.  

• Decentralization & Security -  At mainnet last year, Minima launched with hundreds of thousands of node operators. These operators are all equal participants, contributing towards the scale, security and decentralization of Minima. All transactions are encrypted, offering improved security over traditional transaction methods.

• Network Participants - four primary groups: 1) Enterprises, 2) Other DePINs 3) Developers and 4) Individuals. Developers can create MiniDapps quickly and easily on Minima infrastructure, providing a convenient front-end for interacting with Minima-connected devices. 

• DePIN Use Cases - unlike Soarchain and other projects that require a device, Minima will become a complete System-on-Chip (SoC) solution, embeddable within any connected device. Minima is the only blockchain that allows nodes to run directly within the infrastructure they are securing, bringing the node to the data rather than data to the node. An example of this includes our proven value in the automotive sector, facilitating vehicle-to-vehicle communication and automated payments from EVs to charging ports. ‍

• Consensus Mechanisms - Minima uses a novel implementation of PoW called TxPoW (Transaction Proof of Work) requiring nodes to do a small amount of work to build and validate transactions which collectively contributes to the overall security of the network. A very efficient and accessible mechanism for all to participate in.  Throughput is currently 5 Tx/s on Layer 1, but block size may be scaled by community opt-in in order to increase this to a maximum of around 1000 TX/s. Future release of Minima’s Layer 2 technology, Omnia (an implementation of Lightning’s ELTOO network) will scale the network exponentially, bringing virtually unlimited transactions per second.

• Storage Mechanics - Minima nodes run the blockchain in full and are kept lightweight by using a cascading chain of TxPoW transactions and an MMR database for tracking outputs. This keeps the DB requirements low enough to run on all types of device.

• Node Operator Requirements - Minima is the only blockchain lightweight enough that it is possible to run an entire constructing and validating node on a smartphone, robot, vehicle or IoT device. Minima nodes run right at the edge, on device, with no reliance on central relays or remote transmission of data. 

• Tokenomics - the full supply of Minima’s 1 billion coins was issued at launch, removing the need for future governance related to issuing new coins. A deflationary burn mechanism comes into effect once the network traffic increases sufficiently to put a price on block space.  Until then, all network transactions are free.

Conclusion‍

Minima has the potential to outperform the other blockchains listed in this article because of its unique embedded node capability, which makes it the only chain that can operate directly within the infrastructure it secures. This eliminates the need for intermediaries and offers increased security, scale and decentralization.

Alongside DePIN, Minima can also power the AI and RWA blockchain solutions through enabling every device to run a full node. It is the only DePIN Layer-1 blockchain to do this: others require significant hardware requirements for full node operation.  

Through Collaborative Proof of Work, every Minima node can contribute to scaling the network without requiring significant resources, working together at the edge to construct and verify transactions.

This delivers the scalable data attestation, token generation and peer-to-peer real-time communication at the edge that DePIN and AI projects will require. 

It is our belief that Minima is of critical importance to growing and scaling the value of DePIN thanks to its compact but powerful nature as a comprehensive infrastructure solution. 

Minima is the easiest blockchain to share and install. A succinct node footpoint, shareable miniDapps, and a decentralised DappStore allow anyone to build and publish anything within their own set of rules. In the future, OEMs will be able to embed Minima on chips at the point of production - ushering in a new age of blockchain adoption.

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