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**How DePINs Could Revolutionize the Trillion-Dollar Telecom Industry**
*By Rachel Wolfson*
*Last updated: July 4, 2024, 10:14 EDT | 6 min read*
Decentralized Physical Infrastructure Networks (DePINs) have become a focal point within the cryptocurrency sector due to their potential to address substantial challenges in data and energy sectors.
DePIN networks function by integrating with physical infrastructures, employing blockchain technology and token incentives to optimize business operations efficiently.
Research from Messari suggests that the current market value of DePIN stands at $2.2 trillion and could potentially reach $3.5 trillion by 2028.
Given these figures, it’s unsurprising that numerous DePIN projects have emerged, including those targeting the telecommunications industry.
**DePINs Resolving Telecom Industry Challenges**
Data from The Business Research Company indicates that the global wireless network infrastructure market is currently valued at $3.1 trillion, projected to grow to approximately $3.9 trillion by 2028.
However, the telecom sector faces persistent connectivity and technological hurdles.
Carlos Lei, CEO and Co-Founder of Uplink, emphasized to Cryptonews the current dysfunctionality of the connectivity market. “With billions of devices requiring reliable connectivity and many organizations seeking cost-effective solutions, traditional infrastructure deployment methods are financially unsustainable,” Lei stated.
He further elaborated on the significant capital expenditures (CaPEX) that telecom giants face without clear return on investments.
DePIN aims to resolve these challenges by adopting a decentralized approach. For instance, DePIN projects enable individuals to purchase antennas for setting up network connectivity, thereby reducing dependency on centralized providers while enhancing coverage.
Domenic Carosa, Co-Founder and Chairman of Hivello, a DePIN network aggregator, highlighted how decentralization minimizes redundancy and inefficiency in infrastructure development. “By decentralizing ownership and management of telecom infrastructure, DePIN enhances resource utilization, reduces costs, and expands access in underserved areas,” Carosa affirmed.
**Examining DePIN in Telecom**
Though DePIN is relatively nascent, several projects are demonstrating its potential applications in telecom.
Amir Haleem, CEO of Helium Mobile and Nova Labs, outlined Helium Mobile’s mission to disrupt wireless telecom with a community-built and owned network, offering affordable, unlimited mobile services.
Helium Mobile allows individuals to operate “mobile hotspots,” enabling anyone to become a network operator and expand coverage within their community.
Amir Haleem explained, “Setting up hotspots is straightforward; they simply need to connect to an ethernet cable and power source. Additionally, a builder app facilitates hotspot onboarding and management, while users set up a wallet app.”
Operating on the Helium protocol built on Solana, this network comprises WiFi hotspots and CBRS nodes owned and deployed by the community, with operators rewarded through tokens based on their service contributions.
Helium Mobile reports deploying over 14,000 hotspots, with user sign-ups exceeding 97,000.
**DePINs Gain Momentum Among Telcos**
Uplink, a DePIN platform, recently secured a $10 million funding round led by Framework Ventures, focusing on decentralized solutions for connectivity challenges.
Lei explained Uplink’s strategy of incentivizing users to deploy connectivity infrastructure in regions where enterprises and consumers demand it.
He described two stages: “Stage 1” or the marketplace stage encourages individuals to provide specific players with connectivity in designated regions. “Stage 2” or the offloading stage enables telecom companies to relieve strain on existing networks by leveraging deployed infrastructure for improved service and coverage.
Uplink is in talks with multiple telcos and plans to pilot and deploy solutions under Stage 2, alongside launching a token later this year.
**Challenges to Adoption**
Despite promising prospects, DePIN faces challenges hindering widespread adoption.
Haleem noted resistance from telecom operators in transitioning infrastructure, many of whom have long-standing operational methods.
He emphasized the learning curve in embracing decentralized networks and the challenge of scaling infrastructure.
Nevertheless, Haleem expressed optimism, citing Helium Mobile’s partnership with Telefónica as pivotal for expanding network usage and coverage.
**Incentivization Beyond Deployment**
Lei cautioned against relying solely on incentivizing infrastructure deployment, stressing the need for genuine demand-driven solutions.
He highlighted Uplink’s advanced tools like coverage mapping, surge mechanisms, and a reliable 3-Proof system to ensure deployed infrastructure meets required standards, delivering high-quality network services.
Ariel Seidman, Founder and CEO of Hivemapper, underscored the importance of sustainable tokenomics and product usefulness in DePIN projects, urging a balanced supply-demand approach for successful commercialization.
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