Need help getting started? The following will cover terms specific to DePIN as well as important terms general to Web3 and crypto. Consider this the 'glossary' in your DePIN 101 text book.

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Airdrop - when a predetermined amount of tokens are automatically sent to wallets in the community. This is similar to a customer loyalty program in traditional industry. Airdrops can be a means of generating initial brand awareness, as after receiving tokens the recipient is more likely to get involved in the project. Airdrops are commonly used as a means of retroactively rewarding early adopters in a project. It not only helps projects develop traction but can serve as a way to collect early user feedback.

Blockchain Explorer - The crypto wallet Ledger offers a nice definition: "a software application that allows users to extract, visualize, and review blockchain network metrics, including vital information about crypto transactions, such as transaction history, wallet balances, transaction fees, etc."

Burn & Mint - this is a tokenomics model used to create balance in supply and demand for a token. It sets rules for how a token is emitted (‘minted’), analogous to the Fed printing dollars in the US, and how those tokens are utilized and taken out of circulation (‘burned’). It is essentially a method to avoid inflation. Other models exist, but 'burn and mint' has proven to be very popular in crypto projects.

Exchanges - this is where you go to buy/sell crypto. They are analogous to stock exchanges, in particular, digital exchanges like the Nasdaq. Exchanges provide liquidity that allows you to buy and trade crypto. Exchanges have the important role of serving as an on-ramping and off-ramping point (see definitions). Crypto exchanges come in 2 flavors: Centralized Exchanges (CEX) and Decentralized Exchanges (DEX)

Centralized Exchange - sometimes referred to as CEX for short; the most common examples are Binance and Coinbase. Centralized exchanges are when one central body manages liquidity. They may tap into liquidity through institutional investors, large token holders (known as "whales"), banks, crypto projects, themselves, or various other means. The balances in their books, management of trading pairs, KYC, transaction speed, etc., is all managed by this one primary entity, in whom users trust when they trade. 

Most CEXes also offer wallets and the ability to view and manage your holdings, i.e. to view all of the tokens you have and their current value translated into fiat currencies like USD.

Composability - the ability for one technology to interact with or enable another technology. For example - “DIMO devices in cars leverage Helium’s IoT network to transmit data.” This demonstrates the composability of DePIN projects, in this case Helium and DIMO.

DAO - Decentralized Autonomous Organization. This is a form of uniquely crypto governance. Basically, the web3 alternative to a Board of Directors and Shareholders. A DAO is a type of digital management structure governed by smart contracts with decisions recorded on a blockchain. Members of a DAO vote on the details of these smart contracts. DAO members usually hold tokens.

Decentralized Exchange - referred to as a DEX, is the yin to the CEX’s yang. A DEX is a peer-to-peer marketplace where users can trade cryptocurrencies through blockchain transactions without the need for a centralized intermediary. They are a cornerstone of decentralized finance (DeFi) and serve as a key component in the growth of the cryptocurrency ecosystem. To use a DEX, users need a wallet compatible with the smart contracts on the exchange's network, and they can interact with the platform without the need for an email address or sign-up process.

DePIN - Decentralized Physical Infrastructure Networks 

To understand the unique variation and innovation of DePIN, it’s best to first align on:

Physical Infrastructure - tangible real-world ‘stuff’. In the case of DePIN, these are electronic devices that usually feature some type of sensor. Examples include satellite dishes, cameras, WiFi routers, etc.

Physical Infrastructure Networks - when these tangible devices are linked together via some kind of data backbone and usually with some type of central entity, often a corporation. Examples can be a network of electric vehicle chargers or a telecom network. Think of Google Maps, AT&T, or AWS. 

When the “De” is placed in front, it means the network model is ‘decentralized’ and allows for crypto dynamics to take play.

Decentralized Physical Infrastructure Networks utilize an innovative network deployment and management model where networks go from following a centralized, top-down implementation to a bottoms-up, crowdsourced implementation. 

The DePIN model has numerous benefits, perhaps the most obvious two (from a utility point of view, and less idealistic) are:

• a huge reduction in cost 

and

• a huge increase in speed of network rollout

The more virtuous, or idealistic, benefits are many: 

• greater transparency
• governance extended to all participants
• lower prices
• the ability for everyone to share in the profits

Exchanges - this is where you go to buy/sell crypto. They are analogous to stock exchanges, in particular, digital exchanges like the Nasdaq. Exchanges provide liquidity that allows you to buy and trade crypto. Exchanges have the important role of serving as an on-ramping and off-ramping point (see definitions). Crypto exchanges come in 2 flavors: Centralized Exchanges (CEX) and Decentralized Exchanges (DEX)

Fork - this is a technical change in a blockchain where it splits and a second blockchain is created. The forked version shares the previous history with the original, but the future blockchain will be different. 

A fork occurs when a community make changes to the original blockchain’s protocol, or basic set of rules

Forks can occur in order to make a blockchain more secure or perform better, but they can also occur when a rift forms within the community and a group of people want the blockchain to follow a different set of rules

Forks can take place in two forms - hard and soft

• Hard fork - creates an entirely new cryptocurrency. The new version created is no longer backwards compatible with the original

• Soft fork - a change that eventually becomes the blockchain’s new standard. Similar to an ‘upgrade’. Soft forks do not result in a new blockchain

Gaming - this takes place when users of a DePIN network abuse elements of the network’s protocol in order to enhance their earnings. 

An example of this could be if people installed Helium hotspots lined up together in a basement providing no meaningful coverage but reaping tokens anyway.

DePINs need to build their systems in ways that avoid gaming as much as possible to ensure the healthy operation of their network and to ensure the don’t waste valuable token reserves rewarding malicious actors in the network

Gm  - how hardcore crypto heads greet one another. Weird because it stands for “Good morning” but it’s used at any time of the day, including the night

Hex - Hexes are units in the H3 system - the most common mapping system used in DePIN projects. “Hex” is short for ‘Hexagonal hierarchical geospatial indexing system’. Essentially, it’s a system to index geographic coordinates onto a hexagonal grid overlaid atop the earth. There are different resolutions (read: zoom levels) that can go down to square meter resolution. H3 was originally developed for Uber to address their data science challenges.

HODL - crypto speak for ‘hold’. Refers to maintaining strict discipline to hold onto a token even if the market proves really rocking, usually due to genuine belief in the token/project

Layer 1 - often referred to as L1 for short, layer ones are synonymous with blockchains. An L1 is the protocol layer, and can be thought of as the most basic programmatic layer in web3 architecture. Layer ones have their own tokens. DePINs are either built on top of an L1 (such as Solana) or they can be more hands-on and even create their own L1.

Layer 2 - network protocols that run on top of a Layer 1 blockchain. The layer 1 blockchain is used for fundamental networking and security infrastructure, but the additional layer 2 is utilized to improve other areas such as transaction speed, network throughput, and costs. 

Some of the most famous Layer 2 solutions are Polygon and Arbitrum

Mainnet - a fully operational blockchain; in ‘production’; cryptocurrency transactions are verified and recorded to the blockchain. On the other side you have testnet. 

Mainnet is an independent blockchain that has its own network and protocols

Launching mainnet is considered a major milestone to any crypto project. It means it now has reached a proven level of stability and reliability

Testnet - as opposed to mainnet, as the name implies, testnet blockchains are used for testing purposes. They can be thought of as either an early-stage prototype version of mainnet or a fork (see definition) for testing purposes.

Testnets can be used for testing speed and reliability of a network, especially for things like spotting bugs and code vulnerabilities.

Transactions taking place or tokens used on a testnet will never be reflected on the mainnet blockchain. However, some testnets are incentivized by their development teams to motivate people to test the blockchain

Liquidity - the ability to buy/sell an asset. In DePIN, these assets are tokens.

Map Explorer - the most common place where you will see hexes in action is on a map explorer. A map explorer is a way to visualize DePIN deployments geographically. It is basically a blockchain explorer with a map-like graphical user interface

Mining - the physical act of creating tokens following a set procedure defined by a project and managed programmatically. Bitcoin mining is the most well-known example. Bitcoin mining uses a Proof of Work (PoW) model. Many DePINs use a ‘Proof of X’ model with the ‘X’ depending on the industry they operate in and the value they hope to provide. E.g. Helium is known for pioneering a “Proof of Coverage” system.

Moon - crypto speak for ‘going to the moon’. It means when a project takes off and the token sees exponential growth. This is the dream come true for project owners and investors, although sudden massive jumps in value can also bring about their own set of problems. You may hear this used in ways like ‘I think this project will moon soon.’

On-Chain / Off-Chain - you may hear a lot of references to ‘on-chain’ and ‘off-chain’ data or transactions. 

• On-chain means any exchange of information that is recorded by the blockchain. This information is publicly accessible, although it may be highly technical complex to extract it. 
• Off-chain refers to all the rest of the data that is not captured in the blockchain. This data will need to pass through what is known as an oracle, to pull it on-chain.

In the case of Helium, a lot of RF data around signal strength, frequency, cells etc., is off-chain data. While information about IoT rewards is managed within Solana’s blockchain. It can be verified using blockchain scanning applications.

On-ramp - can be a noun or verb, you may hear it used as "on-ramping". This is the process of transferring money between crypto and fiat. This is required as crypto is essentially an entirely different monetary system with its own rules and infrastructure. On-ramping is the process of how you enter the crypto ecosystem.

Off-ramp - this is the inverse to On-ramping. This is how one exits the crypto monetary system to return back to the fiat system. It's like 'cashing out' in other activites such as gambling.

One common on and off-ramping mechanism is a Centralized Exchange. This allows for a connection to be made between the user's bank account and a crypto wallet. The user can use this to go from fiat to crypto and crypto back to fiat.

Rekt - for a project to rekt or get rekt, means for it to get destroyed. This can be due to bad press, legal concerns, or other reasons. It means their community has lost faith in the project and abandoned it. This is often due to the project team doing scammy things such as building pyramid schemes.

Rug pull - a rug pull is a highly negative event when a project team suddenly does something to remove all value from its token, erasing the value of the community’s investment in the project. This allows the project team to essentially manipulate the community into working for free, offering nothing in return.

Smart contracts - programmatic agreements that define how interactions will take place in an application or on a protocol. This is often related to the procedure for mining and trading tokens. It allows for the removal of human intervention and the need for centralized authorities. Smart contracts have many benefits including great speed of transactions and the reduction of the influence of bad actors.

Token - a system of value, similar to a point in a reward system, utilized in crypto-based networks. Tokens serve as the incentive mechanism that drives participation in DePINs. 

For the retail DePIN participant, tokens are usually the most important aspect, as they are the equivalent to holding stock in a traditional company. They are accrued either by trading/purchasing them via some type of exchange (this is an investing model), or by mining them (through participating in the network in some specific way).  Tokens can occasionally be acquired in other ways, such as airdrops, via allocations in return for venture capital investment, or as grants.

Wallet - in Web3, a ‘wallet’ refers to a digital wallet. This is where your crypto tokens are held. However, it is more nuanced. Cryptocurrencies are not “stored” anywhere, but are actually data in a database. Wallets gather all of the bits of data assigned to you, add up the value and display it in the wallet’s interface. Your wallet is equivalent to your bank account (e.g. IBAN, routing nr, etc.), but its contents can only be interacted with through the use of either a private key or seed phrase. 

This is a big difference - contrary to your bank account, everyone can see what is on your crypto wallet, because it is public information. But people only know it is your wallet once you tell them it is.

Wallets come in 2 flavors - custodial and non-custodial. This refers to how the wallet’s digital keys are managed.  Custodial wallets are hosted by a third party that manages your keys for you, while non-custodial wallets require you to take responsibility for your own keys.

Wallets also come in 2 additional varieties  - hot and cold. Essentially hot wallets can connect directly to the internet, often through a web app or phone app. Cold wallets are offline on physical hardware.

Anyone who wants to interact with DePINs in a meaningful way will eventually want a wallet to hold tokens. Many of these wallets are virtual and simply require an app on your smartphone.

Web3 - a new model of interacting with the internet. An evolution of WWW, or the World Wide Web. The ‘web’ is essentially a software application (or ‘protocol’) for computer applications to interface with the internet. 

The initial phase of the ‘web’; the 1990s to the turn of the millennium, can be considered Web1 and was marked by static websites that primarily served data, such as text and images. 

Web2 made this dynamic. Now anyone could write and share data from their machines. Web2 saw a great shift to centralization as large sharing platforms became dominated by a handful of incumbents. 

Web3 is the latest evolution and allows for additional layers of protocols to interact on top of the traditional web2 layer. These protocols allow for decentralization, greater privacy by emphasizing encryption, and the use of tokens. 

DePINs incorporate elements of Web3, but the level varies depending on the project. Many combine elements from Web2 and Web3. Sometimes this is referred to as ‘Web2.5’. This approach is often necessary in DePIN, where projects need to ensure real-world adoption. Many of the industries DePINs disrupt are far behind the bleeding edge of technology.

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DePIN Categories

DePINs can be divided up into a handful of primary Categories and then further into Sub-categories.

Much of the original categorization started with the blockchain research firm Messari when they built a DePIN sector map. Since then, various layer ones and investors have created their own tweaked versions.

DePIN Hub uses the following system:

Categories

Servers - these are decentralized versions of core networking infrastructure services such as AWS. They can include general and specific purpose compute networks, including, for example, decentralized GPUs specifically for training AI inference models. 

They can also include decentralized content distribution networks (CDNs) (think: Cloudflare); virtual private networks (VPNs) (think: NordVPN ); storage networks for files or relational databases (think: Microsoft Azure). 

This category is often the least physical of the DePINs, as the resources are often virtualizations of computing infrastructure you may already have

Sensors - basically the ‘Internet of Things’; networks of interconnected devices embedded with sensors that collect real-time data from the physical world. This data is then transmitted to a gateway for processing and analysis.

This is the most ‘classic’ form of DePIN as it often involves a physical device and specific, optimizable usage. This encompasses many of the largest DePINs, including DIMO, Hivemapper, WeatherXM, and GEODNET.

Wireless - originally called DeWi for Decentralized Wireless, this is how DePIN started, namely with Helium`. This is basically a decentralized telecom industry use cases.

Manufacturing - this is tiny category at present, but with room to grow. Currently only one DePIN belongs to this category - 3DOS.

The top-level categories can be further broken down into Sub-Categories as follows:

• Servers
  • Compute
  • Storage
  • VPN
  • CDN
  • Data Warehouse
  • GPU
  • Database
  • Computing
  • Proxy

• Sensors
  • Mobility
  • Environmental
  • Energy
  • Smart Home
  • Geo-location
  • Smart City
  • Compute
  • General
  • Healthcare
  • Wearables

• Wireless
  • WiFi
  • Cellular
  • IoT
  • Bluetooth
  • LoRaWAN
  • Geo-location

• Manufacturing
  • 3D printing

It is important to note that the above designations are non-binary; the lines are often blurry, DePINs can fall into multiple classifications, or cross-pollinate over time. 

Moreover, many sensor networks are choosing to abandon physical sensor devices in favor of leveraging the increasing power of smart phones. These are essentially data collection networks that may not involve ‘sensing’ as much as sourcing human-generated reviews. Phone-based review networks could possibly be considered a new category.

There is also a segment of mobility-focused DePINs, such as DIMO. While these could also be considered sensor networks, their deep connection to vehicles could merit a standalone category, or at least sub-category.

Another emerging trend are decentralized marketplace-style service businesses. They use a DePIN model to decentralize the management of the marketplace's's services and to empower the community participants. An example is Teleport who is creating a decentralized Uber.

Another possible category is Energy Networks.

The flagship example here would be the former React Network, which was attempting to build a network of distributed energy resources that could work as ‘Virtual Power Plants’. React has since pivoted away from token incentives, however some other projects have taken the baton and maintained the token angle; such as SRCFUL and Arkreen.