The Rapidly Changing Landscape of Compute and Storage
Why Decentralized Solutions Make More and More Sense
The Decentralized Storage Alliance presented a panel in June alongside Filecoin Foundation featuring some of the top names in the decentralized physical infrastructure space (DePIN), including representatives from Eigen Foundation, Titan Network and IO.net.
The panelists were Robert Drost, CEO and Executive Director, Eigen Foundation, Konstantin Tkachuk, Chief Strategy Officer and Co-Founder, Titan Network, and MaryAnn Wofford, VP of Revenue, at IO.net, moderators by DSA’s Ken Fromm and Stuart Berman, a Startup Advisor and Filecoin network expert. The event was hosted by the DSA and the Filecoin Foundation.
One of the points made early in the discussion was about the growing consensus on what the nature of DePIN is and why it’s so important. DePIN approaches not only move governance of compute and storage resources to the most fundamental levels, they also create global markets for unused and untapped compute and storage. These resources can be within existing data centers, but even in consumer and mobile devices.
Panelists were also quick to agree that the benefits of these new approaches are being realized right now with exceedingly tangible results. Instead of traction being far off in the distant future, it was clear that developers are using DePIN infrastructure now and benefiting from it.
Other topics explored included their strategies for gaining institutional adoption as well as their visions of DePIN in the future. Here are some highlights of the conversation.
On The Benefits of Their Solutions
Robert Drost, Eigen Foundation
EigenLayer has three parts to its marketplace that allows ETH and any ERC 20 holder to restate their tokens in EigenLayer and direct it towards any DePIN as well as any cloud project that wants to have elastic security and ultimately be able to deploy not just decentralized infrastructure but verifiable infrastructure.
By restaking tokens and securing multiple networks, users create a shared security ecosystem that allows for the permissionless development of new trust-minimized services built on top of Ethereum's security foundation.
MaryAnn Wofford, IO.net
IO.net hosts 29 of the biggest open source models on our platform through one central API. That's one build that you have to have, and then all of a sudden you have all of these various models that you could test your applications with. We provide free tokens to gain access to models. We'll give you a certain amount a day and with some models like DeepSeek, we'll give you a million.
IO.net is one of the unique players that allows you to pay in crypto as well as gain rewards for doing so. For example, many organizations that have excess capacity with GPUs can post these to IO.net. They can say that their GPUs are available and they will get a reward from us because we are leveraging the Solana crypto network to support resources.
This decentralized approach gets you away from single siloed vendors who want to take over the entire marketplace and be defined as early winners. At the same time, we give the power to developers to create new alternatives, new options, new functionality, and bring new things to market, which is what we all live for and want to bring to our daily lives.
Konstantin Tkachuk, Titan Network
Titan Network is a DePIN network building an open source incentive layer that supports people across the globe to aggregate idle resources and power process globally connected cloud infrastructure. Essentially we help people to share data idle resources and we help enterprises to leverage those idle resources for their benefit at a global scale.
A powerful feature of the Titan Network is the ability to return the power to people to benefit from the growth of AI storage, compute, and beyond with the devices that they already have and they already own. We have this ability to share your resources, whether you have a personal computer that you want to share – which is how Bitcoin allowed you to do so in the early days – to providing your mobile phone for Titan Network applications to run TikTok and other CDN-like services right from your device.
On the Need for DePIN
Robert Drost, Eigen Foundation
DePIN is a whole re-imagining of what the public cloud looks like. The public cloud is something that in many ways looks decentralized but has actually become pretty centralized in terms of the governance and the control as well as the API software stack that AWS, Azure, and Google Cloud offer.
It's part of the reason why it's so hard for somebody to write software once and deploy it on all three clouds. It's also led to a lot of pricing inefficiency and also led to data being stuck in certain clouds. All of the cloud providers love data to go in for free and then leaving the cloud costs about $40 per terabyte for bandwidth, which some people have estimated in the US is approaching a 99% gross margin, meaning that it's a hundred times the raw cost.
DePIN allows us to actually move the governance all the way down to the fundamental level. It opens up the ability for anyone to run hardware using great technology like IO.net on the AI compute side and Filecon on the storage side. Blockchains give us a lot of flexibility in the ability to create and run almost any possible software to replace the current infrastructure stack – and ultimately the platform-as-a-service and software-as-a-service stacks – to one unified one across all clouds, including the big three. It's actually one big cloud of compute and storage.
MaryAnn Wofford, IO.net
To add to this, DePIN is a compute resource that is truly global because you're not really tied to a particular data center. The workloads for AI inference, for example, can be served to your end users at the point of access of where they're at.
That's one of the key things people come to us for – the ability to be agnostic and to be highly flexible in terms of compute resources. You're not dedicated to long-term contracts and you're not dedicated to one particular region. There's just a tremendous amount of flexibility as to where the access point of compute lies, creating a wider marketplace for compute resources.
Konstantin Tkachuk, Titan Network
I would also like to add that we often forget in the DePIN space that a large supplier of resources is average people around the globe getting the opportunity to share and benefit from the infrastructure that they already own. These physical devices, computers, data center-grade infrastructure, and anything in between can now be shared and the people who own these devices can get a benefit from it.
So all of this infrastructure is part of a movement that enables people around the globe to start contributing and be part of this value creation loop. Whether we talk about AI, storage, or compute – all of the amazing developments that are happening – people are able to share their resources and companies are able to benefit from this infrastructure. This is a fascinating movement that brings back the power from centralized data center-grade complexities to just people around the globe.
On DePIN Success Stories and Traction in the Market
Robert Drost, Eigen Foundation
EigenLayer is very much a channel partner play that includes B2B2C as well as B2B-to-Institutions. We have increasing relationships directly with public cloud providers. This means we're integrating and supporting their software stack. It also means that these major cloud providers are becoming operators inside of EigenLayer. We have over a thousand – many of them serious data center providers – who are happy to operate on the networks.
I think the misconception about it is that decentralized physical infrastructure means that we would not have the big three cloud providers. They can totally play in the market, they just have to actually operate and run nodes. And with EigenLayer we're seeing that we actually have operators being run by the cloud providers themselves for various [web3] protocols.
MaryAnn Wofford, IO.net
We are seeing a number of really key wins, particularly in multimodal AI applications specifically on the inference side of things – which we feel is a major use case going forward. We're working with a number of vendors who are building their own models – such as voice and imaging models – who want to make sure they're serving these in a timely manner to their end users.
We are seeing millisecond responses in terms of inference with these models and in other interactions. We know that we're just at the tip of the spear in terms of what we're able to do with AI applications and serving up multi-model capabilities, but [this use and its responsiveness] stands out as one of the key use cases we're seeing with the DePIN infrastructure that we have.
Konstantin Tkachuk, Titan Network
The biggest successes that we find is that we're enabling enterprise customers of traditional web2 services such as content delivery networks and/or compute and storage services to really benefit from the infrastructure we are aggregating at a community level. This really shows the potential of distributed DePIN systems in general where infrastructure is crowdsourced.
For example, we're actively working with TikTok in Asia and enabling TikTok to save more than 70% of their CDM cost savings, just from the pure perspective that they are connecting to user devices and using these devices as CDN nodes to share the content in Asia. This capability is possible due to our coordination layer which brings a level of transparency and a reward infrastructure all the while maintaining performance at a level, and sometimes even better, than traditional cloud infrastructure.
This is where we see a lot of shift compared to previous cycles where blockchain was perceived as something slower or more complicated to use compared to traditional cloud. I think now we are at the inflection point of blockchain where we can do the same things with the same quality or even better due to some new features that are enabled by the blockchain primitives.
On Gaining Institutional Adoption
Robert Drost, Eigen Foundation
Our success with pulling in very important platforms-as-a-service and software-as-a-service middleware means that developers are able to much more rapidly build and deploy decentralized applications.
It means that over time when we're looking at the transition, we will actually see major software providers, software vendors such as Snowflake, CloudFlare, and others will start supporting and deploying their software entirely using blockchain middleware.
It's going to inject real world revenue on the financial side of blockchain, complementing real world assets. If you look at the revenue in the public cloud space, you can see citations on the big three US public clouds of many hundreds of billions of dollars of revenue. If you add in the software and others, you start looking at trillions of revenue that's being run in the infrastructure space. Just imagine all of that being settled via tokens in the crypto space.
MaryAnn Wofford, IO.net
Our ideal customers are the developers in small teams who are testing new applications, testing new capabilities – these exist inside of enterprises and big industries.
We interact a lot with the innovation lab side of big enterprises. We interact with test and dev groups. Although we're new, there are pockets within enterprise organizations that need speed, that need a really fast way to get a project up and running to prove value to the senior executive teams without significant exposure.
We saw this working recently with a couple of oil and gas companies where they wanted to build out test models for some applications they were thinking about, and they just wanted to move quickly. They didn't want to go through the internal process of getting approval.
This is just one aspect but our true North Star and the type of profile that we want to grow our business on is really these types of developers, the small teams that want to innovate and deliver quickly and then make sure that they can continue to grow their applications and ideas out.
Konstantin Tkachuk, Titan Network
What really shines and what really helped us to capture this institutional adoption was focusing on providing the service for an enterprise that's complete and whole. The web3 space made a little bit of a mistake in the beginning where we tried to provide access to one specific resource and weren’t solving the customer problem as a whole.
Now we are all maturing and figuring out that customers need complete solutions. They don't want to figure out how to do the integration. They want to just get the service and run with it. We are at this level where we're starting to provide services to those who just need it [as is] as well as providing additional functionality on top of it for those who want to build their own infrastructure and solutions by themselves.
More and more teams will see the value in using infrastructure that is functional and will deliver more value while also being cheaper or designed in a different way. The way we are building our infrastructure is that the end user of our partners should never know whether they use traditional cloud or DePIN infrastructure.
Stuart Berman, Filecoin Network Expert
Providers like Filecoin have massive capacity. We have exabytes of data that we store in a fully decentralized fashion. Anybody can spin up a node and start storing data or it can be a client and start using Filecoin services from any one of or multiple providers across the world, irrespective of location. You can specify location or say I don't care where it's located.
Moving forward is going to take a bit of effort to get us to this vision of what we're talking about, which is that users shouldn't really care about the underlying technology, but they should care about its capabilities, its features and their ability to control systems, monetize their data, and get the most amount of value out of the information that they either own and control or are part of some ecosystem.
Public data doesn't have severe requirements around privacy and so access control is a good place to start and that's where we've made a lot of inroads, but there's a lot of work to be done to get us there where the vision of full decentralization and the promises it brings get us there.
On The Impact of DePIN on the Future
Robert Drost, Eigen Foundation
EigenLayer also supports things that you don't have in the regular web2 space, such as Proof of Machinehood, which is an analog to Proof of Humanity. For example, there was an AI coding project recently where it came out that it was all a fraud. There were 700 engineers pretending to be AI models building applications. Verifying that there's a real AI model running versus a human is actually a valuable thing.
[One of our partners] supports another great proof which is Proof of Location. You can actually see that your protocols are running across all the continents or you can provide benefits and higher rewards for people who are supporting your protocol in different parts of the world.
We also support something called “applicable security” where if there is a violation of the decentralized protocol, the stakers funds are not just burned, they are given to the participants. You can actually have what looks a little bit like insurance – although it's really more like legal restitution in that if you have losses then you will receive compensatory funds for what you lost.
MaryAnn Wofford, IO.net
Decentralization of compute and storage gives developers the tools to unlock innovation. They have certainly been siloed into a couple of players benefiting, so we could count them on our hands of the players that really have driven the recent economic model for software development.
It's who really won that battle in terms of the VCs, the hyperscalers, etc. Decentralized infrastructure provides the ability to create new things. It will provide the scale that's going to be needed with a very low cost upfront investment in order to test new capabilities such as AI models.
Konstantin Tkachuk, Titan Network
The opportunities to allow people to benefit from the growth around them is an incredible feature. Having the ability to bring people back into the growth loop on a societal level will help offset all of those fears of AI replacing them or something else replacing them.
Now they can provide services to AI, which pays them on a daily basis for running these services. This powerful inclusion of people back into the loop is something that we'll see a lot of appreciation and value, especially if we can communicate this well on various channels and levels.
Stuart Berman, Filecoin Network Expert
The core aspect of decentralization is user control. It's not entirely about distribution – it's about who can set parameters, who can set prices, who can decide who can see my data, who can process it, who can store it.
This is critical and something we've seen this in the decentralized storage space is we've gone from storing data to being able to do compute-over-data. Ultimately what are people getting out of this in terms of their value for their information?
I don't think of smart contracts as much technically as I do in terms of it being a business agreement or a personal agreement in a true legal contractual sense. You can use this data for that and I can control who has access to it and how often they have access to it and for what purposes they have access to it.
We're even seeing regulations now being developed in particular around Data as an Asset class, which gives you the owner of the data, the information-specific legal rights versus the other way around today – which is you turn the data over to somebody and they seem to possess rights to it.
