Are most DePIN projects not utilizing blockchain technology effectively? True or false?

DePIN projects, short for Decentralized Physical Infrastructure Network, have been gaining a lot of attention in the crypto world lately. These projects connect physical devices that collect and share data, like wireless networks or energy grids. But do they actually use blockchain technology as much as they claim?

It turns out, many DePIN projects don’t rely fully on blockchain networks. Even with blockchains running at a million transactions per second, they still might not have enough bandwidth for these projects. Helium, a popular DePIN project for wireless networks, moved to Solana in 2023 for faster processing, but even Solana isn’t always fast enough for real-time computation needs.

Shuyao Kong, co-founder of MegaETH, a new project launching soon, says that current DePIN use cases aren’t completely on-chain. While MegaETH aims to process 100,000 transactions per second, suitable for some DePIN projects, it’s clear that real-time computation capabilities are still a challenge for blockchain networks.

Some projects may claim to use blockchain as a marketing ploy, but the reality is that fully on-chain DePIN applications can be inefficient and costly. Many projects opt for a hybrid structure, doing off-chain computations and then recording the results on-chain.

Zhe Wang, CEO of DEPHY network, which connects off-chain DePIN data to blockchains, explains that there are two main types of IoT devices: sensors and executors. Sensors collect data and don’t need immediate message delivery, while executors act on command. Delays in executor computations can be dangerous, so real-time capabilities are crucial.

Despite challenges, blockchain technology is useful for DePIN projects to coordinate the activities of many devices without needing them to trust each other. Wes Levitt, head of strategy at Theta Labs, explains that blockchain incentivizes participation by rewarding contributors with tokens. For example, DePIN marketplaces like CUDOS and Akash allow users to contribute computing power and earn tokens in return, creating a more sustainable system.

Overall, while blockchain is important for decentralized infrastructure of DePIN projects, real-time computation is often handled off-chain. Ethereum, the largest blockchain, might not be suitable for DePIN due to its slow transactions per second. Layer 2 solutions like Base and Arbitrum could be better suited for the fast-paced world of DePIN projects.