Solana DePIN projects aim to take gig economy to next level

Quick Take

  • DePIN projects on Solana, like Hivemapper, Render and Helium, showcase the potential of Decentralized Physical Infrastructure Networks to take the gig economy to the next level, according to Solana Foundation DePIN lead Kuleen Nimkar.
  • The upcoming launch of Jump Crypto’s Firedancer validator client will further the often-criticized decentralization of Solana’s network, Nimkar added.

Decentralized Physical Infrastructure Networks (DePINs) are reshaping traditional infrastructure models, providing an opportunity analogous to today's gig economy, according to Solana SOL +9.25% Foundation DePIN lead Kuleen Nimkar.

While many people today earn supplemental income from driving for Uber or delivering for DoorDash, over time people can also generate additional income by contributing hardware to DePIN protocols, Nimkar told The Block in a recent interview.

More powerfully, Nimkar argues, contributors to DePIN networks can generate significant income from supporting a network early on, earning tokens that later appreciate as the network grows. "That's something that never happened with the web2 gig economy, early Uber drivers didn't see an outsized benefit for supporting Uber before it became a giant," he added.

DePIN protocols leverage token incentives, composable with the broader DeFi ecosystem, to help bootstrap hardware networks, offering services like computing power and storage.

Hivemapper, Render and Helium

Nimkar highlighted Solana DePIN projects such as Hivemapper, Render RNDR +7.71% and Helium HNT -11.03% as examples — incentivizing contributors to build network growth and reducing upfront investment costs compared to traditional infrastructure models.

Hivemapper offers tokens to drivers who install a dashcam and collect mapping data as they drive around. Render allows anyone with excess GPU power to connect their hardware to its protocol and earn by providing computing power for customer use cases such as machine learning training. Decentralized wireless network Helium, which recently debuted a 5G mobile service in Miami at $5 a month, enables distributed node runners to generate revenue by hosting dedicated hotspots from their homes or businesses to provide mobile connectivity to nearby users.

Organizations can pay for DePIN project services with their respective tokens. However, Nimkar suggested this may switch to stablecoins as these new platforms mature, with protocol token utility focusing on governance instead.

While the Solana Foundation occasionally grants or invests in such projects, its focus is on accelerating the ecosystem and giving leverage to the best builders, Nimkar said. "Whether or not a team received a grant or investment doesn't impact that focus."


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Why Solana is the 'default' DePIN network of choice

Nimkar believes Solana is now the "default choice" for decentralized physical infrastructure projects due to its low transaction cost, high-throughput speed, scalability and existing DePIN ecosystem.

Helium is a case in point, migrating from its own blockchain to Solana, which, along with existing DePIN projects, has "catalyzed a ton of tooling and infrastructure development for DePIN on Solana that makes it even easier for new DePIN projects to leverage Solana," Nimkar said.

Solana's decentralization journey

Often criticized over perceived centralization and occasional downtime, Nimkar argues Solana has become one of the most decentralized blockchains today by most measures. Nimkar pointed toward the network's approximate 2,000 globally distributed validator nodes and its Nakamoto Coefficient, a measure of network security, outpacing many of its peers.

As an example of Solana's distribution, Nimkar highlighted German data center operator Hetzner's blocking of Solana activity last year, which resulted in 1,000 validators temporarily falling offline, stopping them and their delegators from earning stalking rewards. Because the remaining validators were decentralized across other infrastructure providers, the network operated "without a hitch," Nimkar said, with nearly all the affected validators back online at different data centers within a few days.

Nimkar added that the Solana Foundation was particularly excited about the launch of Jump Crypto's validator client, Firedancer. Firedancer is an open-source, independent Solana validator client, which can help identify bugs, vulnerabilities or inefficiencies in the original client and provide network redundancy in case issues arise with one client, Nimkar said.

"Once Firedancer is live, Solana will be the only large Layer 1, aside from Bitcoin and Ethereum, to have multiple independently managed validator clients," Nimkar added.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

James Hunt is a reporter at The Block, based in the UK. As the writer behind The Daily newsletter, James also keeps you up to speed on the latest crypto news every weekday. Prior to joining The Block in 2022, James spent four years as a freelance writer in the industry, contributing to both publications and crypto project content. James’ coverage spans everything from Bitcoin and Ethereum to Layer 2 scaling solutions, avant-garde DeFi protocols, evolving DAO governance structures, trending NFTs and memecoins, regulatory landscapes, crypto company deals and the immersive metaverse. You can get in touch with James on Twitter or Telegram via @humanjets or email him at [email protected].


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