Home / Opinion / Technology / Is Standardization the Secret Sauce to Effective DePIN Monetization?

Is Standardization the Secret Sauce to Effective DePIN Monetization?

Last Updated June 14, 2024 7:07 AM
Last Updated June 14, 2024 7:07 AM
By Matthijs de Vries
Verified by Ana Alexandre
Key Takeaways
  • Standardization is key for DePIN networks. It can unlock data sharing and monetization potential.
  • Using trustless data infrastructures gives access to quality datasets. This enables fair data monetization. As a result, network utility and participant income both increase.
  • Creating standard methods for data sharing and monetization can draw in more stakeholders and speed up the adoption and impact of DePINs.

Decentralized Physical Infrastructure Networks (DePINs) are rapidly transforming the Web3 economy. They have a wide array of use cases, from providing GPU power and internet connectivity via hotspots to capturing vast amounts of data.

Despite their diverse applications, these networks share a common trait: they generate significant data that demands substantial computational power for processing.

DePINs and IoT devices are driving a surge in data production, requiring robust computational capabilities to make sense of this data. Generating token income from DePINs often hinges on network usage and market demand.

Low usage can translate to fewer rewards, creating challenges in scaling and achieving competitive advantages. For these networks to thrive, achieving an economy of scale is crucial, effectively aligning supply and demand.

As DePIN adoption grows, stakeholders need reliable frameworks for data sharing. Without standardized mechanisms, DePINs’ potential  for effective collaboration and fair monetization remains untapped.

Standardized protocols in DePINs can simplify data collaboration. They provide clarity and consistency, building trust among users and promoting adoption. Standardized data transforms into a valuable resource, separate from the utility of the network itself, opening new avenues for monetization.

How standardized protocols can shape DePIN’s future

Data is vital within the DePIN economy. The usefulness of DePIN protocols relies on how well user-generated data is utilized. Projects like HiveMapper illustrate compelling examples of how user-generated data can fuel innovation and transform traditional business models.

Users collectively contribute to mapping the world, creating valuable data. This data enhances maps, trains autonomous vehicles, and supports other use cases.

A similar dynamic played out in traffic monitoring. A major mapping technology competitor faced challenges because its business model relied solely on installing devices to gather data, limiting scalability.

In contrast, Waze used smartphones already owned by users to create a network of small IoT devices for traffic monitoring. This approach made traffic data collection more accessible and scalable.

Despite empowering users to control their data and its value, DePINs lack protocols for collaboration and monetization.

Running private networks is costly and often lacks external funding. This makes it hard to attract hosts and sustain operations without enough resources.

To succeed, DePIN initiatives need trustless data infrastructures. These infrastructures must manage and commercialize data gathered from network participants. Using trustless architectures can drive a cycle of transformative impact. As more users join the DePIN network to earn rewards, the data pool grows, boosting users’ utility and income.

The role of trustless data infrastructure

DePIN needs a trustless data infrastructure to commercialize data collected from network users. Some smart data platforms already offer significant benefits to DePIN projects by providing high-quality datasets, valuable industry insights, and fair data monetization opportunities.

Standardizing and contextualizing data makes it easier to analyze and use. Converting raw data into high-quality smart data boosts AI models and helps businesses enhance production efficiency and predictive analytics. This leads to better outcomes, especially for consumer-facing companies.

Add to it the use of advanced AI tools, and you get a tool capable of analyzing data from sensors, human input, and third-party sources to create actionable insights.

Reliable data flow optimizes processes and creates new business opportunities. This fosters a data-driven economy where collaboration and standardized monetization are key to success.

Driving the data economy forward

Standardized mechanisms for data collaboration and monetization are crucial for DePIN networks. While users providing infrastructure are rewarded in tokens, DePINs can better leverage their data opportunities. Current systems often fail to fully leverage the value of the data they generate.

Communities can harness DePINs’ true power through collaborative efforts. Standardization can simplify access to diverse data sources and eliminate fragmentation. It will create a transparent, equitable system where data contributors can rightfully monetize their assets and actively participate in the data-driven economy.

Standardization breaks down barriers and encourages more stakeholders to join, from individual contributors to large enterprises. This inclusivity accelerates DePIN network adoption and broadens its impact. By ensuring fair compensation and access to data, standardization helps create a sustainable ecosystem.

As DePIN networks progress, embracing standardized protocols will be key to unlocking their full potential. Such protocols ensure that data is collected and effectively used, driving the entire Web3 economy forward.

Disclaimer: The views, thoughts, and opinions expressed in the article belong solely to the author, and not necessarily to CCN, its management, employees, or affiliates. This content is for informational purposes only and should not be considered professional advice.