Archaeology of DePIN: Seeking the "Legitimacy" of the Sector
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Archaeology of DePIN: Seeking the "Legitimacy" of the Sector
When DePIN brings the "legitimacy" of real-world businesses into the crypto world, DePIN projects will stand on equal footing with public blockchains.
Navigating Web3 tides with focused insightsAuthor: Wyz Research
In the world of crypto, every blockchain seeks legitimacy. Legitimacy acts as the initial driving force for development—or the source of "faith"—making everything meaningful and traceable. From concept to practice and application, the role of "legitimacy" is fully manifested at each stage.
If we attempt to find DePIN's legitimacy using this framework, it cannot be derived directly from Messari’s definition of DePIN, primarily because the attribute of “physical computing infrastructure” in that definition is too broad. However, the good news is that we can still identify a common logic across diverse project types—this shared logic can serve as DePIN’s foundational legitimacy.
In this article, we will explore the logical legitimacy of DePIN and infer its structured evolution. We believe that with the support of such legitimacy, DePIN will bring new momentum into the crypto space—forces that originally belonged outside this domain.
The Current State of DePIN
Today’s DePIN sector aggregates many legacy sectors. Although Messari provided an overarching definition based on physical computing infrastructure, the number of projects falling under this category has become overwhelmingly large.
Firstly, there are storage and computing projects: established names like Filecoin, Storj, and Arweave in decentralized storage. Due to their unique characteristics, most of these can transition directly into computing networks, taking on cloud-like service models—leading to the emergence of platforms like 4everland and Sia. Additionally, there are older projects focused primarily on decentralized computing networks, such as iExec, Phala, and Akash. Some projects have been particularly responsive to conceptual shifts—for example, THETA, which was repositioned into this sector through its focus on gaming cloud services.
Secondly, Internet of Things (IoT) projects constitute another major group. Given their high quantity and strong alignment with DePIN principles, they have nearly become the mainstream of DePIN. Examples include veteran projects like IOTA, Helium, IoTeX, and Livepeer, as well as newer ones like Helium Mobile and Helium IoT.
Lastly, there are emerging AI-focused projects and newly launched initiatives exhibiting clear DePIN characteristics.
AI is one of the most prominent sectors in this cycle. Because AI demands massive computational power and relies on specialized hardware within network infrastructure, it naturally fits into the DePIN category.
Whether involving storage, computation, IoT, or AI—all are grouped under DePIN largely due to shared attributes. But what defines a project with distinct DePIN traits?
These projects emerge in response to market demand and clearly belong to the DePIN sector by nature. Notable examples include W3bstream launched by IoTeX, DePHY (invested in by IoTeX), Wicrypt and WiFi Map (both incubated within the ecosystem), and application-driven projects like Hivemapper and IoTeX Pebble.
Among these, W3bstream and DePHY operate at the "middleware" layer, while Wicrypt, WiFi Map, Hivemapper, and IoTeX Pebble fall into the application layer. Their emergence stems from a simple truth: blockchain-based infrastructure is now sufficient in scale and availability. When it comes to getting device data on-chain, beyond building proprietary networks, the optimal choice is direct connectivity. This creates a market need for solutions enabling faster B2B access to DePIN—giving rise to middleware players offering tools and frameworks.
These new projects arise purely out of industry demand and are inherently DePIN-native.
Through detailed research, we observe that W3bstream focuses on solving device-to-blockchain integration, whereas DePHY not only addresses blockchain connectivity but also provides hardware-level solutions. The likely reason lies in IoTeX having already released standardized hardware products and APIs for integrating various hardware data. By investing in DePHY, IoTeX extends its ecosystem upstream into hardware manufacturing and integrated solution design.
As for application-layer projects like Wicrypt, WiFi Map, Hivemapper, and IoTeX Pebble, most replicate proven models. For instance, IoTeX Pebble is a hardware device designed by IoTeX to protect endpoint data, applicable across numerous data-collecting projects. Wicrypt and WiFi Map draw from successful experiences in wireless networking, with Helium being the most notable prior case.
Therefore, compared to Messari’s approach of categorizing existing projects post hoc, real changes are already underway: projects born natively from DePIN-specific needs are emerging. The industry structure is shifting from “blockchain + IoT network” to “blockchain + middleware + applications.” This reflects evolving market demands and signals that DePIN has reached a critical developmental phase.
Additionally, early-stage projects were almost entirely crypto-centric. Projects like Filecoin and Storj only built communication and resource layers without extensive development or adaptation for end-user applications. Their ultimate goal was to establish cryptocurrency networks, with token economics at the core—users deployed mining rigs to earn tokens.
Now, however, such networks are abundant. Whether storage, distributed cloud computing, or distributed AI networks—the model remains largely consistent from network layer to blockchain layer. Due to high performance requirements, these projects often retain a design inertia: setting very high entry costs.
Given this context, two primary needs have emerged: launching new DePIN projects and enabling traditional smart device companies to adopt blockchain technology. These represent the dominant growth drivers today. Fortunately, the existence of middleware and tooling projects helps meet these needs, allowing application layers to unlock business potential.
Simply put, some players in the ecosystem must prepare for new entrants joining the space. This is the current state of DePIN.
Tracing Origins and Core Logic
DePIN will continue maturing along current trends. To understand its structural evolution, we must take a macro-level view.
Earlier, we reviewed all major project categories. Based on Messari’s summary of the DePIN landscape, we see various subcategories: computing, storage, AI, IoT, sensors, wireless, GPU, data, CDN, smart cities, geolocation, environment, etc.
All these align with the DePIN concept of physical computing infrastructure. Across supply chains, each business uses hardware devices capable of computation. Differences in device functionality and computing power determine network capabilities. Thus, from computing capacity, we can deduce both business models and their logical integration with blockchains.
Following the idea of physical computing infrastructure further back leads us to internet computing networks. In Wyz Research’s earlier article, “How to Dissect Global Projects Using Technical Logic,” we noted that public chains share characteristics with modern cloud services—and DePIN mirrors the cloud service model.
After the internet emerged, large network nodes—“servers”—supported network operations. Early servers were physical machines; vast numbers formed data centers, supercomputing centers, and regional resource pools.
Once AWS popularized the cloud service model, cloud computing became mainstream. Cloud platforms continuously added functionalities, integrating with other tools—eventually becoming the dominant mode of software development.
From this evolution, we observe the following connection flow:
Computing Hosts (forming network) -- Cloud Platform -- Developers
Substituting public blockchains into this framework yields:
Nodes (forming network layer) -- Blockchain -- Developers
Now consider how IoT devices traditionally connect:
Device -- Router / Internet -- Management Backend / Server
Under DePIN, the process becomes:
Computing Device -- Internet -- Blockchain -- Developer
Or alternatively:
Computing Device -- Middleware Platform -- Blockchain
Comparing these four flows, DePIN combined with blockchain follows the same logic as cloud service networks. The key difference lies in functional divergence leading to two distinct connection and usage patterns. One pattern emphasizes infrastructure provision—projects like Filecoin (legacy) and Render (newer)—where special-purpose devices join the network to share storage or compute power, mirroring cloud services. Another pattern involves providing wireless bandwidth sharing at the network edge (endpoints), exemplified by Helium’s wireless sharing model.
The second type focuses on connectivity and data communication rather than compute sharing. Take IoTeX’s Peddle device: once connected to the blockchain, it functions as a user terminal. It no longer shares compute resources but transmits data back to management systems and the chain, unlocking additional on-chain capabilities. This represents an alternative path for application-layer integration beyond raw infrastructure provisioning.
These two product logics—compute sharing vs. data communication—correspond respectively to mining via shared compute and mining via shared data.
Technically speaking, both use blockchain as a ledger: cloud-style components record workloads, while data-focused parts track data-sharing volume. The latter also treats blockchain as an open gateway, aiming to place data in public environments where it can generate greater value.
In conclusion, DePIN derives its legitimacy from internet cloud services and IoT operational models. This legitimacy also represents functional legitimacy for public blockchains—specifically, the open-world sharing of resources (compute, storage, bandwidth, data).
This is functional legitimacy beyond the token-based “financial legitimacy” of cryptocurrencies. It explains why Messari stated in its report that DePIN revenues will be utility-driven rather than speculative.
Extending DePIN’s Structure: A Forward-Looking View
What kind of industry structure will best meet future DePIN demands? The answer lies in bidirectional progress: moving from crypto outward to solve device connectivity issues, and from IoT inward to address blockchain integration and functionality. Once projects successfully bridge this gap, the industry structure will stabilize around three layers—infrastructure, middleware, and applications—and three dominant themes: shared compute/storage/bandwidth, cost-reducing middleware, and diverse intelligent device applications.
According to Messari’s report, there are over 650 DePIN projects. CoinGecko lists around 79 with issued tokens, while IoTeX’s ecosystem tracks approximately 65.
It’s clear that the DePIN sector hosts many legacy blockchains, indicating near-saturation in the L1 market. Yet every DePIN project requires its own mainnet—to handle device communication data and global state. With so many base-layer chains already available, innovation is shifting toward middleware and application layers.
This explains the growing trend we observe: more DePIN projects now offer frameworks and solutions, serving as standardized replication tools across the industry.
As previously mentioned, W3bstream and DePHY are representative cases—one developed by IoTeX, the other invested in by IoTeX—both aiming to reduce costs and enable rapid, standardized replication of DePIN projects.
Together, they enable a complete workflow:
1. Solve the cost challenge in computing device design;
2. Achieve hardware-to-blockchain connectivity;
3. Integrate on-chain business logic.
Let’s examine the first issue using DePHY’s solution as an example.
When devices join a network, cost requirements vary widely depending on purpose. Broadly, solutions fall into: data communication / secure data transmission, bandwidth sharing, storage sharing, and compute sharing—with associated costs ranging from hundreds to tens of thousands of dollars.
For instance, connecting a basic smart switch in a non-secure environment requires only standard data collection methods—lowest cost category.
At the bandwidth-sharing stage—such as Helium or WiFiMap’s wireless sharing—specialized hardware is required, raising costs to several hundred dollars.
For storage and compute sharing—like Filecoin mining rigs—costs reach tens of thousands of dollars. Long-term use of cloud services or GPUs may incur even higher ongoing expenses.
High costs mean high barriers to entry. Therefore, future growth in DePIN will likely concentrate on the second category discussed earlier: data sharing. Currently, most data-sharing setups require installing nodes to ensure security—already a minimal threshold, yet it raises requirements even for simple onboarding devices.
Reviewing DePHY’s open-source hardware designs reveals that using encrypted communications or TEE modules can enhance small-device data security while keeping costs low—the simplest entry-level device costing about $10–15.
The second issue concerns blockchain connectivity.
Current projects are already choosing different blockchains for direct integration. However, they still face challenges in device onboarding, data collection, management, and maintaining overall network state—requiring intervention from middleware players.
Both W3bstream and DePHY address this need, offering developers tools for device management—leveraging modular and open-source components like device DID. For device linking, both use off-chain networks they’ve built, acting as relays between global states and various public chains to support diverse business functions.
Although their solutions support multiple networks, they often show preference for certain chains. Public chain performance is crucial for delivering optimal user experience in DePIN, leading them to favor high-concurrency chains like Solana.
The third and final step involves unlocking business functionality on-chain.
Beyond decentralization of control, blockchain’s greatest strength is openness. DePIN businesses must leverage crypto-native applications to realize their full potential on-chain.
Currently, beyond native token use cases, data services are the most developed area in crypto—with oracles being the prime example, supplying price data to DeFi and other apps requiring high data security.
Beyond data transfer, data markets serving machine learning in AI represent the most promising future scenario. Federated learning and deep learning could become closely tied to DePIN. Unfortunately, practical implementations remain scarce today.
Of these three stages, the first two are currently mature enough to support standardized replication. We’re already seeing many projects built on this model—EnviroBLOQ (based on IoTeX’s Pebble), Dimo and Drife (built on W3bstream), Starpower and Apus (using DePHY), among others.
Conclusion
Messari consolidated projects to form DePIN into a sizable sector, but actual scale still lags behind expectations. Most forecasts suggest DePIN will absorb real-world value, driving overall market cap growth.
Yet current evidence shows limited industry growth—explaining the relatively low market valuation. High barriers persist: crypto natives often lack hardware expertise, while hardware firms struggle to adopt blockchain and crypto tools. Nevertheless, with the help of middleware players, growth is achievable. Diverse applications can now enter the space more easily thanks to these enablers.
In the future, when DePIN brings the “legitimacy” of real-world operations into the crypto world, DePIN projects will stand shoulder-to-shoulder with public blockchains. That is our greatest hope for this sector.
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