The Rise and Fall of DePIN Projects: The Difficult Path from Hype to Reality

The Web3 world seems to always repeat a pattern: economic incentives combined with scene packaging. In the last wave of enthusiasm, the GameFi concept was all the rage, and earning tokens from playing games and running became a hot topic. However, although these projects once thrived, they failed to find a sustainable business model and ultimately could not escape the fate of decline.

Today, the concept of DePIN(, a decentralized physical infrastructure network), has emerged, sparking heated discussions in the Web3 community once again. It not only emphasizes "earn while you use," but also expands to "everything can be DePIN": charging, making calls, installing sockets, driving, watching ads, and even drinking water can earn token rewards. This model seems to be closer to reality than GameFi, as fields such as electricity, communication, and transportation appear to hold more practical value.

However, upon closer observation of the implementation and economic models of these projects, we have discovered a concerning phenomenon: most DePIN device suppliers come from Huaqiangbei in Shenzhen, and the prices of these devices are often 30-50 times the wholesale price. Almost all hardware investors have suffered significant losses, and the DePIN tokens they purchased are also difficult to rebound, leaving investors to watch their assets shrink, waiting for the "ecological landing" and the "next round of airdrops" that may never come. This phenomenon is less about infrastructure innovation and more about a hardware scam dressed in new clothes.

Project Case: The Blood and Tears Lessons of Investors

Helium: From a rare commodity to being overlooked

Helium was once a star project in the DePIN field, with its Helium Hotspot devices building a decentralized LoRaWAN network. The project later partnered with large telecommunications companies to launch mobile communication services, attracting a large number of users with low-cost packages.

However, the story of Helium devices has become a typical case of "retail investor harvesting": hotspots that once cost dozens of dollars were speculated to $2,500 each, claiming a return on investment in just three days. But the reality is harsh: due to domestic nodes being banned by authorities, investors in China suffered complete losses, and the mining machines became worthless scrap metal, with the coin's price plummeting, leaving investors with nothing. The once dream of "mining equals financial freedom" has now been shattered.

Hivemapper: High-priced cameras make "mining" difficult to recoup costs.

Hivemapper has launched a dashcam priced at $549, claiming that users can upload geographic data during driving to earn token rewards. This "drive-to-earn" model seems easier to get started with than traditional mining, but there are actually many issues:

• The expensive hardware prices lack strong token support, resulting in the long-term sluggish performance of the HONEY token price, with a prolonged payback period.
• The quality and update frequency of map data are questionable, and it remains uncertain whether a network can truly be built to rival mainstream map services.
• Its map network mainly covers developed countries, with almost no practical application scenarios in the Asian market.

Although Hivemapper has generated over sixty million dollars in revenue through hardware sales, this reflects more of the income from "selling equipment" rather than the healthy performance of the DePIN economic model.

Jambo: The Web3 Mobile Myth of the African Market

Jambo has achieved great success in the African market with the combination of "DePIN + Web3 wallet". The mobile phone, priced at only 99 dollars, has sold over 400,000 units and activated more than 1.23 million wallet addresses. This success does not stem from investors' confidence in the project, but rather relies on the surging popularity of a certain well-known token and the rapid development of its ecosystem, resulting in a blatant "marketing maneuver".

The mobile phone comes pre-installed with dApps, allowing users to earn JAMBO tokens, but the liquidity and value of the tokens remain questionable. Achieving a closed loop for data sales is difficult due to a lack of large data buyers, and the mobile ecosystem struggles to support the long-term usage needs of Web3 users.

Ordz Game: The Web3 Variant of Retro Handhelds

The Ordz Game features a "play-to-earn" model along with the handheld device BitBoy, with pre-sold units quickly selling out at a price of 0.01 BTC, and over 2000 units of the regular version have also been sold.

However, this project has the following issues:

• The gaming experience basically stays at the level of retro handheld console ROMs, lacking innovation.
• After the token ORDГ transformed into GAMES, it still lacks liquidity and actual value.
• Essentially a replica of the GameFi mining model, just dressed in the guise of a "handheld console."

The project struggles to achieve long-term retention of players and sustainable profits. The promised airdrops may be illusory, but the funds lost by investors are very real.

TON phone: An expensive "senior phone" experience

During the peak period of a well-known instant messaging platform and related blockchain projects, the TON phone was born. Priced at nearly $500, it has good sales, but users have rated it as having a "senior phone feel." The configuration is mediocre, with only 6GB of RAM and 128GB of storage, running on Android 14. Although it comes with a phone case and claims to have "airdrop expectations," the actual situation is:

• The quality of the airdrop is far inferior to similar projects.
• The user interface and experience lack differentiation, and the phone itself is completely unoriginal.
• The payback period is long, and ecological construction is still in the conceptual stage.

The buyer is for "future airdrop hope", but this hope seems to lack the foundation for realization.

Starpower: An Incomprehensibly High-Priced Plug

Starpower claims to be a smart power DePIN project under a well-known public chain ecosystem, selling smart sockets, car chargers, batteries, and other hardware, and has received support from multiple institutions. It is said that tokens will be issued in the second quarter, with one plug priced at $100, while the same product on e-commerce platforms only costs 91 yuan.

The project company has a short establishment time, lacks transparency in technology, the ecological incentive model has yet to be clarified, and relies entirely on "storytelling" to sell equipment.

Looking back at the history of the "mining machine futures scam" of early DePIN projects, and then looking at the development roadmap of Starpower, it is not difficult to find the astonishing similarities between the two.

The Dilemmas and Reflections of DePIN Projects

DePIN is essentially an extension attempt of the Web3 "economic incentive model" into the real world. Theoretically, it has limitless possibilities:

Real-world infrastructure ( such as communication, electricity, maps, and devices ) can be decentralized to build large-scale user network effects, achieving fair incentives and transparent governance through token design.

However, at the current stage, the majority of the truly implemented DePIN projects rely on selling hardware to harvest retail investors: token models with hardware attributes are generally a combination of "air + bubble," and the so-called "ecological empowerment" often relies on opinion leader packaging, concept hype, and airdrop expectations to attract new users. Most project parties come from the hardware supply chain, earning equipment income through "supply chain + exorbitant pricing," rather than actually building networks.

Successful DePIN projects require strong supply and demand model design, transparent and continuous incentive mechanisms, and a deep understanding of the hardware and infrastructure sectors. The biggest bubble in the current DePIN market lies in the fact that most projects are not solving real problems but rather packaging concepts to harvest users. When hardware becomes a speculative tool in the form of "futures," when equipment tokens degenerate into worthless "digital vouchers," and when all narratives revolve around airdrop expectations, DePIN is merely another round of Ponzi scheme in the Web3 space.

We look forward to seeing some DePIN projects in the near future that do not rely on hardware sales, not just on storytelling, but on real use cases and actual revenue for survival. Only in this way can DePIN truly realize its vision of decentralized infrastructure and make a substantial contribution to the development of Web3.