The Resurgence of the DePIN in 2024

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Today, we are looking into one of the leading narratives of the year, Decentralised Physical Infrastructure Networks (DePIN), and how it is gaining traction in 2024.

The Decentralised Physical Infrastructure Networks (DePIN) sector has experienced staggering growth, more than doubling in the first three months of 2024. The sector's total market cap, which was about $40 billion at the end of 2023, skyrocketed to an all-time high of $80 billion in March 2024. This rapid growth is a testament to the sector's potential and the exciting opportunities it presents. The top three protocols by market cap are Render at $3 billion, followed by Filecoin at $2.4 billion, and The Graph at $2 billion.

DePIN is a subsector within crypto that incentivises the production of resources like data storage and computing power. Over 1,000 projects are active in the space, spread across decentralised computing, storage, wireless, and sensor networks. This is not a new sector; one of the leading projects, Filecoin, was started in 2014 to reduce hosting costs by allowing individuals and businesses to rent out unused disk space.

Onchain revenue from these subsectors reached an all-time high of $2 million every week in April 2023. It has trended down from that point but is seen picking up this year so far. Currently, the total onchain revenue in the DePIN sector is approximately close to $400,000 per week, where decentralised computing is leading the way. Some well-known projects in the computing space are Akash Network, Livepeer, and IO.NET.

Decentralised storage is another major category that uses a distributed network of nodes to store data instead of centralised servers. Here, large files are encrypted, divided into pieces, and distributed across multiple independent computers, which ensures redundancy and resilience against outages. Filecoin is a great example of this category.

Then, decentralised wireless networks use blockchain and token incentives to establish and sustain communication networks. Here, individuals contribute hardware, such as hotspots and routers, to offer services. Helium and Pollen Mobile are the best examples of such wireless networks. Finally, decentralised sensor networks collect user data for resale or analysis, ensuring precision, security and transparency. The network connects devices with sensors for real-time data gathering, enhancing integrity and mapping capabilities. NATIX Network, Hivemapper, and DIMO are the best examples of this category.

The DePIN sector is based on the cryptocurrency economy, as participants are rewarded with tokens for supplying resources such as processing power, internet connectivity, and storage capacity. It constitutes a real link between the tangible world and the blockchain, bridging real-world commerce with the crypto ecosystem. DePIN's success hinges on the design of its tokenomics and creative incentive mechanisms and how seamlessly they are blended with conventional revenue streams.

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