hat is a DePIN track? What are the prospects for the future? A comprehensive interpretation of the development of the DePIN industry

What is a DePIN track? Dylan Bane, Principal DePIN Research Analyst at Messari, and Salvador Gala, Co-Founder of Escape Velocity Ventures, co-authored The State of DePIN in 2024. This 104-page report provides an in-depth analysis and review of the DePIN industry in 2024 and a forward-looking outlook for DePIN in 2025. The report covers macro trends in DePIN, AI x DePIN, Distributed Wireless Networks (DeWi), Distributed Generation (DeGEN), Computing Networks, Sensor Networks, Identity Networks, Logistics Networks, and more.

So, what is DePIN? What is the future prospect of the DePIN track? A comprehensive introduction to the interpretation of the future value of DePIN, let's take a look!

Key takeaways:

DePIN is in its early stages of development, with less than 0.1% of the $1+ trillion size end market.
The DePIN sector has 350 tokens with a market cap of $50 billion and is trading at about 100 times the ARR.
More than 13 million devices contribute to DePIN every day.
In 2024, the DePIN "battle on the chain" accelerates, with Solana and Base seizing market share from other L1s. Solana is leading the way in terms of network infrastructure, Base is leading in terms of consumers and markets, and dedicated DePIN L1 is carving out its own native on-chain ecosystem.
Local governments are looking to DePIN to address infrastructure challenges.
The DePIN segment raised more than $350 million in pre-seed, seed, and Series A funding rounds.

Table of Contents of Reports

Part 1: What is DePIN?

2. What are the changes to DePIN in 2024?

Overview, Supply, Demand, Capital, Infrastructure, Artificial Intelligence

3. In-depth insight into the industry

Wireless network, energy, computing, sensors, identity, logistics

Part 1: What is DePIN?

DePIN stands for Decentralized Physical Infrastructure Networks. DePIN leverages cryptographic incentives to efficiently coordinate the construction and operation of critical infrastructure on top of the public blockchain.

DePIN areas include: Wireless Networks, Energy, Computing, Sensors, Logistics, Identity.

DePIN Timeline:

2014: First computing network
2017: First wireless network
2019: First storage network
2020: The first AI network
2021: First storage network
2022: First proxy network
2023: The first energy network
2024: First AR/XR network, first DePIN venture capital fund

DePIN empowers and inspires people to improve the public infrastructure around them.

In a world full of untrustworthy institutions and incompetent bureaucrats, DePIN puts wealth and power back in the hands of citizens and communities.

DePIN is the path most people get into the crypto economy.

The first 500 million cryptocurrency owners won the genetic lottery: they had the privilege of buying their first cryptocurrency...... The next 5 billion cryptocurrency owners will earn their first cryptocurrency through their efforts.

Global cryptocurrency ownership (excluding stablecoins) has so far been concentrated in wealthy countries, where consumers have disposable income and a high risk tolerance for their capital. Unlike the gigantic power law of the global distribution of wealth, human time, intelligence, and physical abilities are either evenly distributed or normally distributed.

DePIN is how artificial general intelligence (AGI) travels through time to create the resources it needs to thrive.

Today, generating a 5-second video costs more than $0.10 in compute, power, and bandwidth...... Advanced AI will demand these digital goods on an unimaginable scale.

DePIN is the first three-phase business model capable of enabling networks worth more than $10 trillion.

The DePIN flywheel combines the economies of scale of traditional infrastructure (1), the network effects of technology platforms (2), and the liquidity moat of money (3).

DePIN is in its early stages, accounting for less than 0.1% of the $1+trillion end market.

Over the next decade, DePIN will grow 100-1000x as the network gains market share from centralized enterprises that deliver slower, less reliable, and less dynamic services.

The DePIN sector has 350 tokens with a market cap of $50 billion and is trading at about 100 times the ARR.

Based on the core mission, we divide DePIN into six categories: Compute, Wireless, Sensors, Identity, Energy, and Logistics.

2. What are the changes to DePIN in 2024?

Cryptocurrencies double in 2024; As AI has captured global attention, DePIN is growing even faster.

DePIN has gone from an unagreed category to being widely recognized as one of the most important, if not the only most important, areas driving the development of the crypto economy today.

Number of projects: From 2022 to 2024, the number of DePIN projects grew 12-fold from 650 to 1170.

Revenue: From 2022 to 2024, DePIN revenue grew from $100 million to $5 billion, a 100x increase (3.3x including on-chain net revenue), which overturns bear market critics' claim that "DePIN has no demand side."

Market share: From 2022 to 2024, DePINs grew 25x from 16% to 49% in the market capitalization of the crypto altcoin market (DePIN excluding AI grew from 15% to 48%).

DePIN's growth is driven by a new native platform for founders and the community.

DePIN attracts some of the brightest minds in the crypto space.

At the second DePIN Summit in New York, leading founders and investors in the space came together to discuss the future of community-operated infrastructure networks.

Expanding the supply side is no longer a problem: a clear growth strategy has emerged.

Most DePIN projects combine light nodes (to reduce friction for new users to join and acquire new users) and heavy nodes (to achieve stronger, more reliable network performance).

More than 13 million devices worldwide contribute to DePIN every day.

In 2024, 20 DePIN projects have grown to more than 100,000 active nodes, and 5 of them now have more than 1 million nodes.

As the supply side is validated, DePIN faces a new set of challenges: demand and monetization.

Founders and investors now cite revenue as the primary operational and valuation metric to drive capital allocation decisions.

20 revenue-generating DePIN projects achieved $500 million in annualized revenue.

DePIN's total revenue grew by 33x in 2024 (including only on-chain net revenue increased by 3.3x).

As the DePIN project turns on the fee switch and shifts revenue on-chain, the valuation multiple could expand by more than 10x.

The median valuation of DePIN projects with on-chain revenue is more than 200 times the net annual recurring revenue (ARR), while the valuation multiple of projects with off-chain revenue is less than 20 times.

Seed-stage venture capitalists have flocked to the DePIN space, and they have been able to move forward in a favorable listing environment.

In private markets, more capital is raised in the pre-seed/seed stage than in Series A; In liquid markets, a low fully diluted valuation (FDV) for listings is a major determinant of high returns.

A handful of venture capital firms with a clear theme focus their bets on the largest DePIN market.

Multicoin, Framework, a16z Crypto, and EV3 are among the most confident supporters of the DePIN project, having made more than 8 investments each in 2024, raising more than $100 million each in their DePIN portfolios.

Most of the late-stage capital went to a handful of ground-breaking DePIN projects backed by top-tier venture capital firms.

DePIN projects that successfully raise eight-figure venture capital will typically issue tokens at 50 - 100 times their book value, i.e., billions of dollars in FDV.

Some DePIN projects skip venture capital and instead raise capital from crypto hedge funds.

Crypto hedge funds, including EV3 Liquids, Modular, Pantera, and Borderless, provide growth capital and post-investment support to DePIN projects following the project's Token Generation Event (TGE).

The DePIN project also raises funds directly from its community while conducting venture capital rounds.

In 2024, the DePIN project raised more than $230 million from the community through node sales, crowdfunding platforms, and protocol-owned liquidity pools, among other things.

DePIN's "public chain wars" accelerated, with Solana and Base taking market share from other Layer 1 blockchains.

With the support of interoperability solutions Wormhole and Layer Zero, many DePIN projects are moving multi-chain to expand their user base, but this has also led to the fragmentation of liquidity.

Solana leads the way in terms of network infrastructure, while Base has the edge in terms of consumers and the market.

Solana's low-latency culture attracts innovators at the infrastructure layer, while Coinbase's brand and retail distribution channels attract consumer-focused founders to Base.

Layer 1 blockchains, built specifically for DePIN, are building their own native on-chain ecosystem.

IoTeX, the most established DePIN Layer 1 ecosystem, saw a more than 10x increase in on-chain trading activity in Q4 2024, while two emerging challengers, Peaq and Minima, launched their mainnet tokens.