DePIN: Building a Decentralized Value Network through the Superposition of Dual Curves
TechFlow Selected TechFlow Selected
DePIN: Building a Decentralized Value Network through the Superposition of Dual Curves
A key feature of DePIN's business model is using hardware revenue as the first growth curve, and building upon it data service monetization as the second growth curve.
Navigating Web3 tides with focused insightsAuthor: Evan, Waterdrip Capital
Introduction
DePIN is gradually enabling large-scale interaction between the physical world and Web3, and is increasingly disrupting traditional infrastructure operational models. By integrating sensors, wireless networks, computing resources, and AI with blockchain technology—and leveraging crypto-economic incentives to drive crowdsourced development—most DePIN projects share a key business characteristic: hardware revenue serves as the first growth curve, upon which data service monetization is layered to form a second growth curve. This dual-curve model is one of the critical factors behind DePIN’s leadership in the current market cycle, while also demonstrating how DePIN projects generate massive wealth effects during the construction of decentralized infrastructure networks, ultimately forming a scalable decentralized value network.
1. Building a Decentralized, Interconnected World of Everything
Decentralized Physical Infrastructure Networks (DePIN) were defined in Messari's 2023 report as "using cryptographic economic protocols to deploy real-world physical infrastructure and hardware networks." This concept envisions a highly imaginative application scenario: common infrastructures around us—such as communication base stations, EV charging piles, photovoltaic panels, billboards, and the data storage and computing equipment behind internet operations—will no longer be controlled by centralized entities or institutions. Instead, they will be divided into standardized units owned by individuals or large-scale miners. These physical infrastructure units of the same type are highly standardized and scalable, creating blanket coverage across regions.
Through decentralization, the deployment and utilization of infrastructure can achieve higher efficiency and lower costs, while enhancing overall system security and resilience. Moreover, from energy production to data processing, various facilities have the potential to transition toward decentralized models. The combined market size of industries related to DePIN today exceeds $5 trillion. Therefore, Messari estimates that the potential market size of the DePIN sector is approximately $2.2 trillion, projected to reach $3.5 trillion by 2028.
Illustration of a decentralized interconnected world, reference: Messari
Market size data for DePIN-related industries, source: Statista
1.1 DePIN Sector Segmentation
The DePIN sector encompasses six subdomains: computing, AI, wireless communication, sensors, energy, and services. From a supply chain perspective, DePIN can be broken down into:
-
Upstream: Hardware manufacturers and supply-side users acting as "miners."
-
Midstream: Project platforms, blockchains responsible for data validation and token settlement, Layer-2 protocols serving DePIN, modular service components for developing and managing DePIN networks (e.g., platform interfaces, data analytics, standardized services), SDK toolkits for DePIN development, APIs, etc.
-
Downstream: dApp applications and interfaces connecting to demand-side users.
Except for IoTeX and the former Helium (whose mainnet has now migrated to Solana), most DePIN projects rarely cover every aspect of the DePIN business. They typically choose Solana or IoTeX as their token economic settlement layer. Projects in the AI and cloud computing subdomains tend to focus more on on-chain settlement and platform development and management, while underlying hardware devices rely on middleware to orchestrate idle electronic devices such as smartphones or computers equipped with high-performance consumer-grade GPUs.
1.2 Overview of DePIN Industry Development
According to DePIN Ninja, there are currently 1,215 launched DePIN projects with a total market cap of approximately $4.3 billion. Among them, projects that have issued tokens and are listed under the DePIN category on Coingecko have a combined market cap exceeding $25 billion.
Back in October last year, this figure was only $5 billion—meaning it has quintupled in less than a year, highlighting the rapid growth of the DePIN industry. This indicates continuously increasing market demand and recognition for decentralized physical infrastructure networks. As more projects launch and use cases expand, DePIN is poised to become a pivotal area where blockchain technology integrates with real-world applications.
2. Insights from the Business Logic of DePIN
The prototype of DePIN can be traced back to the previous cycle's IoT + Blockchain concept. Projects like Filecoin and Storj transformed centralized storage into decentralized operation via cryptographic economic models, achieving practical applications within the Web3 ecosystem—for instance, storing NFTs on-chain and hosting front-end and back-end resources for DApps.
While IoT + Blockchain merely reflects the decentralization ("De") aspect, DePIN places greater emphasis on building physical infrastructure and creating a large-scale interconnected network. In DePIN, "PI" stands for Physical Infrastructure and "N" for Network—referring to the value network formed once DePIN hardware achieves sufficient coverage scale.
The most prominent example is Helium. Founded in 2013, Helium didn't settle on using blockchain as an incentive mechanism for decentralized IoT deployment until 2018. To date, Helium nearly fulfills all aspects of DePIN: node economics, miner model, value network, crowd-sourcing incentives—and is a leading project in the DeWi (Decentralized Wireless) space. Furthermore, at the end of last year, Helium Mobile partnered with T-Mobile to launch a $20 monthly telecom package targeting mainstream users. When users transmit data via the Helium network, they not only earn token rewards but also enjoy reliable communication services. Simultaneously, Helium helps T-Mobile address signal coverage issues in remote areas of the U.S., creating a win-win-win scenario. Its ability to attract large numbers of traditional end-users may propel DePIN into the mainstream, accelerating widespread adoption of blockchain technology and Web3 networks.
Both Helium and Filecoin fall under the DePIN umbrella, but their key difference lies in Helium’s stronger focus on hardware, allowing it to support a second growth curve through data services, build an independent ecosystem, and capture both alpha and beta returns. Despite past controversies involving false advertising and challenges stemming from its niche programming language hindering development, Helium reignited its second growth curve with a series of strategic moves by year-end. As the largest-scale DePIN project to emerge successfully so far, Helium offers valuable insights into the broader DePIN ecosystem.
3. DePIN’s Explosive Growth Based on the Dual-Curve Theory
"Second Curve" is a concept from management and innovation theory originally proposed by scholar Charles Handy. It refers to the need for organizations, products, or businesses to introduce new innovations or transformations when reaching the peak of their traditional growth curve, thereby initiating a new growth trajectory and avoiding stagnation or decline.
DePIN dual curves, reference: The Second Curve: Thoughts on Reinventing Society
From the experience of previously successful DePIN projects, it is evident that DePIN’s business logic naturally aligns with a strategy of hardware sales driving the first growth curve, with data value network monetization layered on top as the second growth curve.
Product R&D and operational capabilities are crucial for ensuring sustained growth along the first curve. However, launching the second curve requires two additional capabilities: organizational strength in decentralized systems and strong service delivery to the demand side.
For the DePIN ecosystem, this means that project teams must first demonstrate competence in organizing scalable hardware networks capable of handling massive data transmission. Only then can the data value network operate smoothly, enabling seamless integration of downstream demand and delivery of high-quality, standardized data services—ultimately achieving dual-curve growth and establishing a positive feedback loop within the project’s ecosystem.
3.1 Hardware Value as the First Curve of Value Creation
On the first growth curve, a business experiences rapid initial expansion followed by gradual plateauing. For DePIN projects, the momentum of the first curve stems directly from revenue and profits generated by hardware sales.
Traditional infrastructure, especially in domains like data storage and communication services, operates under linear business logic: early-stage investment in infrastructure setup is required before offering services to end consumers (C-end). Consequently, such ventures often require involvement from giant corporations capable of absorbing high upfront costs—including hardware procurement, land leasing, deployment, and hiring maintenance personnel. Drawing from BCG’s deconstruction of the data value network, traditional IoT operations result in the data value chain depicted in the left image below. Under this model, data flows independently and linearly as a production factor, with completely isolated ecosystems.
Traditional data infrastructure value chain, reference: BCG, "Data Value Network"
In contrast, DePIN projects break down centralized supply sides into crowdsourced models to establish hardware networks.
DePIN hardware network business model breakdown, reference: BCG, "Data Value Network"
Therefore, the first step—deconstructing centralized infrastructure—is key to unlocking the first growth curve for DePIN projects.
DePIN project teams must actively promote their narratives and employ various operational strategies—such as pre-selling "mining rigs," offering airdrops with purchases—to attract participation from supply-side users. This shifts the substantial infrastructure investment burden onto these users, enabling low-cost, lightweight project launches. Supply-side users, holding hardware, effectively become stakeholders in the project, deploying hardware networks with the expectation of future mining rewards.
Moreover, unlike traditional centralized equipment providers, DePIN device updates and maintenance are jointly handled by the project team and miners: manufacturers focus solely on R&D and sales, while upgrades and upkeep are managed by supply-side users. This collaborative process strengthens community identity and project loyalty among miners (supply-side users).
If a DePIN project can seamlessly execute narrative marketing, mining hardware sales, and community operations, it will have assembled all essential elements for its first growth curve—ultimately creating a self-reinforcing cycle of increased network coverage → higher token incentives → more miners joining.
Below are active node count statistics to date, with Hivemapper, Helium, and Natix ranking top three, each having deployed over 100,000 nodes globally.
Source: DePIN Ninja
Among them, Hivemapper, Helium, Natix, and Nodle have each deployed over 100,000 nodes, with Helium and Hivemapper showing particularly strong performance:
Helium
-
Helium is a decentralized wireless network whose primary offerings include Helium Hotspot, providing LoRaWAN coverage; and Helium Mobile, a mobile service co-launched with T-Mobile and TEF.
-
Its $20/month telecom plan, launched in partnership with T-Mobile on January 25, grew from zero to 93,000 subscribers within five months.
-
Collaborating with Mexican telecom giant Telefónica (TEF), Helium entered Mexico’s market of 126.7 million people, further strengthening its revenue streams and market influence.
Hivemapper
-
Hivemapper is a decentralized mapping platform aiming to create a global, real-time updating map ecosystem using blockchain technology and crypto-economic incentives. Its main product is the HiveMapper Dashcam—a dashcam allowing users to collect geospatial data while driving.
-
Priced at $549, Hivemapper’s hardware sales alone have grossed over $60 million based on current node deployment figures.
-
To date, Hivemapper has established a geographic data collection network covering most of Europe and North America. Its data service revenues have also seen significant growth.
-
Other projects have taken innovative approaches in hardware revenue generation. For example, Jambo achieved impressive sales success in African markets using smartphones as its entry point. OORT possesses technical moats in cloud and edge computing, achieving notable hardware sales through its innovative model. Ordz Game, a GameFi project, cleverly integrated DePIN elements to gain traction. These projects have broken through in hardware revenue via unique innovations and technological advantages, exploring new ways to integrate DePIN across industries.
Jambo
-
Web3 wallets serve as the gateway for all crypto users. Jambo aims to drive mass Web3 adoption in Africa through a DePIN+ wallet strategy. By selling affordable Jambo phones marketed as Web3 devices, it attracts many traditional Web2 users. Preloaded with a Web3 wallet app, users can play games or watch ads to earn native JAMBO tokens. Jambo partners with major African data service providers, completing its business loop by selling generated user data.
-
In the future, Jambo phones will roll out on-chain data mining and other incentive programs. Additionally, preinstalled dApps will allow users to manage their DePIN phones. Currently, Jambo phones are available in over 120 countries and regions, primarily in Africa. Priced affordably at $99, more than 400,000 units have been sold, activating 1.23 million non-custodial wallet addresses.
OORT
-
OORT is a decentralized, verifiable cloud computing platform designed specifically for AI applications. It leverages global resources ranging from data centers to local edge devices and employs a proprietary blockchain-based verification layer to ensure security across all transactions and computations—from data crowdsourcing and labeling to model training and local inference.
-
The officially provided Deimos DePIN device acts as its decentralized edge node, priced at $379. To date, over 5,500 edge nodes have been deployed worldwide, spanning most countries and regions across the Americas, Europe, and Asia. Together, these nodes form a powerful decentralized edge computing network, delivering reliable data processing and computational power for AI applications.
Ordz Game
-
As the first gaming platform on the Bitcoin ecosystem, Ordz Game uses the Ordinals protocol to mint each retro game level as an NFT. Players earn points by playing games, and top-ranked players receive Games token rewards (originally the BRC20 token ORDG), creating a "Play-to-Earn" model to attract participation.
-
Currently entering Phase 5 testing, Ordz Game has completed four quarters of public testing, surpassing 260,000 total login wallet addresses. A handheld console called BitBoy will be released later, priced at 0.01 BTC each. The limited edition of 1,000 consoles bundled with NFTs sold out within hours of release, and standard versions have already exceeded 2,000 units sold. As the "mining rig" for the Ordz Game platform, BitBoy empowers the issuance of Games tokens, creating a flywheel effect: play-to-mine → token incentives → more players → rising token value.
These examples illustrate that hardware sales play a crucial role in early-stage DePIN project revenues. They not only impact initial cash flow but also determine the speed of large-scale hardware network deployment. Only upon stable development of the hardware network can DePIN projects smoothly transition to the second phase—data value networks—and initiate the second wave of growth.
Beyond specialized scenarios requiring dedicated data collection (e.g., Hivemapper dashcams gathering road condition data), most consumer data can actually be mined via personal consumer devices such as smartphones and smartwatches. These supply chains are already mature, enabling project teams to scale rapidly without heavy R&D investment, reaching broader C-end markets. Due to high profit margins on these devices, project teams can achieve significant early-stage revenue growth.
Furthermore, large DePIN hardware (e.g., photovoltaic panel arrays) could potentially be tokenized as RWAs in the future. Combined with mature DeFi Layer-2 protocols on-chain, this could unlock innovative products and financial service models, enhancing liquidity in hardware networks and boosting activity in hardware trading markets.
3.2 Data Value and Network Monetization as DePIN’s Second Growth Curve
As mentioned earlier in the value chain discussion, traditional business models are relatively linear and closed. Once growth plateaus, the only options are improving user retention and increasingly competitive user acquisition campaigns. Additionally, traditional infrastructure providers must bear ongoing upgrade and maintenance costs themselves. Thus, after hitting growth ceilings, they often face decline.
In contrast, after accumulating initial revenue through hardware sales—and just before the first growth curve reaches its inflection point—DePIN projects initiate their second curve. The core of this second curve lies in establishing a data value network atop a mature, large-scale hardware network.
By aggregating multiple value chains, decentralizing the supply side, and leveraging public chains to connect multiple demand sides, DePIN creates a comprehensive data value network.
Final version of the DePIN data value network
Although DePIN emphasizes physical infrastructure, its core business logic revolves around extracting value from data. After being validated and authenticated on the blockchain storage layer, data becomes a highly liquid tradable asset circulating within the data value network. This data flows not only across different ecosystem projects but also exchanges directly or indirectly between supply and demand sides.
Once the data value network sustains a positive incentive cycle—typically determined by tokenomics, number of nodes, and good supply-demand alignment—the entire ecosystem generates massive wealth effects centered on data.
Tokenomics: The Economic Foundation of the Value Network
Tokenomics serves as the economic foundation of the data value network and is crucial to the long-term viability of DePIN projects. Two dominant models currently exist: BME (Burn and Mint Equilibrium) and SFA (Stake for Access).
BME involves burning tokens: demand-side users destroy tokens when purchasing services, making deflation dependent on demand—higher demand leads to higher token value. SFA requires supply-side users to stake tokens to qualify as miners, meaning supply determines deflation—more participating miners increase token value.
This depends on whether a DePIN product relies more on the demand or supply side. Typically, middleware or platform-type DePIN projects favor SFA—where the scale and quality of supply define project ceilings, such as OORT and Helium, both requiring users to stake tokens to become nodes. On the other hand, C-end application-focused DePIN projects suit the BME model better for sustainable operations; Render Network is a typical example.
BME and SFA constitute the foundational framework of DePIN projects, while additional token utilities enrich the token economy. Examples include offering pre-mining commitments via积分 (points) that convert into tokens post-launch at fixed ratios, or adopting hybrid point-token economic models. Granting governance rights enables token holders to participate in major decisions such as network upgrades, fee structures, or treasury reallocations. Staking mechanisms incentivize users to lock up tokens, stabilizing token prices. Project teams may also use part of revenues to buy back tokens and add them to liquidity pools paired with major cryptocurrencies or stablecoins, ensuring ample liquidity for smooth trading without significant price impact. These mechanisms help align interests between supply, demand, and project teams over the long term, supporting sustained project success.
DePIN Value Networks Will Drive AI Industry Advancement
Once a large-scale data network operates smoothly and the supply side delivers consistent services, a significant portion of DePIN’s ultimate value will flow into the AI industry.
AI has become a key driver of global economic transformation and industrial upgrading, heavily reliant on vast amounts of data and computing power. Since 2012, demand for compute has grown over 300,000-fold—far outpacing Moore’s Law’s 12-fold increase. Clearly, AI’s explosive growth exerts enormous pressure on computing demand.
Theoretically, decentralized compute networks like io.net and Render Network can orchestrate distributed idle computing resources to fill massive market gaps, track and store data via blockchain to ensure AI training security, and distribute incentives via cryptocurrency. While this workflow appears compelling, actual demand still requires further validation. In the C-end market, these decentralized compute networks face fierce competition from traditional giants like AWS, Azure, and GCP. In the B-end market, they mainly reach small and medium enterprises unable to build private compute networks, whereas large enterprises prefer proven, stable centralized cloud providers.
On the other hand, training data for AI is already facing shortages. According to Epoch AI research, if current consumption and production rates continue, humanity will exhaust low-quality language data between 2030 and 2050, high-quality language data before 2026, and visual data between 2030 and 2060.
AI requires massive volumes of raw and trusted data for training, making DePIN critically important in this context. The vast number of devices deployed by DePIN can collect enormous amounts of raw data at extremely low cost. Their decentralized distribution makes the data more valuable and unique. Therefore, sensor-collected data within the DePIN ecosystem is inherently advantageous for AI model training.
Overall, given AI’s strong demand for both compute and data, decentralized cloud computing and sensor networks providing AI training data are the two DePIN subdomains most likely to achieve data value network realization first.
3.3 Middleware Infrastructure as a Critical Bridge Between the Two Growth Curves
At the beginning of this article, we analyzed the DePIN supply chain, identifying midstream middleware as the key conduit connecting the physical and digital worlds.
If the first curve is hardware-driven and the second data-driven, transitioning smoothly between them requires a critical intermediary: middleware providing standardized interfaces and toolkits, public or Layer-2 chains handling token transactions and settlements, and Layer-2 protocols enhancing liquidity.
First, blockchains serve as settlement layers for DePIN project tokens, primarily handling token settlement and data validation:
Solana
-
Currently, Solana is the preferred platform for most DePIN projects due to its low latency and high performance, suitable for DePIN deployments. For example, Helium and HiveMapper are built on Solana. However, mainstream public chains were initially designed for transactions and lack SDK toolkits optimized for DePIN-specific needs, thus not fully meeting DePIN requirements.
-
DePIN projects require purpose-built blockchains tailored to specific features such as data validation and AI-readiness. For instance, Near Chain has started emphasizing its AI narrative, while IoTeX has long positioned itself as a blockchain customized for IoT devices. Such specialized blockchains better meet DePIN’s unique demands, ensuring efficient data processing and device connectivity. IoTeX also provides a suite of standardized interfaces and plug-and-play tools, enabling rapid deployment of DePIN applications on its chain.
Peaq
-
A blockchain built specifically for DePIN. Peaq includes a range of modular DePIN functionalities: self-sovereign identity for machines/things (peaq ID), role-based access management (peaq access), peer-to-peer payments (peaq pay), data verification (peaq verify). The Web3 Machine Control Center (peaq control) offers a holistic way to connect any machine, device, sensor, vehicle, or robot to the network. Project teams can easily deploy DePIN apps on the Peaq chain using these modules. Peaq also enables seamless cross-chain interoperability, allowing easy migration of data from other projects onto the Peaq chain.
Additionally, middleware connecting devices to DePIN networks is equally critical, offering developer-friendly, one-stop solutions for builders unfamiliar with crypto-economics. This represents a certainty for DePIN ecosystem prosperity. Such projects include developer tools and full-service platforms like DePHY and Swan, as well as re-staking protocols dedicated to DePIN such as Parasail, aimed at enhancing native token liquidity and value utilization in DePIN networks.
DePHY
-
DePHY provides open-source hardware solutions, SDKs, and tools, significantly reducing manufacturing and network messaging costs for bridging hardware products to blockchains through off-chain network nodes synchronized with blockchain operations at 500ms intervals.
-
For example, Starpower, developed on DePHY, offers Starplug—an intelligent outlet that records users’ electricity usage behavior and volume, rewarding them with tokens. DePHY open-sourced customizable hardware design blueprints, helping Starpower rapidly complete hardware design and move into mass production. Additionally, DePHY shared its hardware production resources, greatly facilitating manufacturing convenience and cost efficiency for Starpower. Starpower also adopted DePHY’s DID system and open-source hardware solution with built-in TEE modules, ensuring data security and immutability.
Swan Chain
-
Swan Chain (formerly FilSwan) is a full-stack AI-intelligent chain based on OP Stack technology—a decentralized cloud computing network focused on AI. Through Swan Chain, enterprises, data centers, cloud providers, and crypto mining operators contribute idle GPU resources to the network and monetize computing assets via the UBI incentive model, earning stable income. Meanwhile, enterprises, developers, and AI enthusiasts can leverage Swan Chain’s global computing resource network to build and deploy decentralized AI models and applications, potentially saving up to 70% in compute costs.
-
Developers often face complexity when managing tokens and using various SDKs, diverting attention from core product functionality. The lack of convenient Web3 application access tools hinders efficient dApp creation, slowing development and limiting economic potential. To address this, Swan Chain provides a suite of development tools enabling cross-chain resource access, simplifying storage provider selection and data management. By introducing a cross-chain consensus layer, it offers comprehensive infrastructure solutions, allowing developers to seamlessly access Web3 resources across multiple blockchain networks using cross-chain tools. These tools include payment channels and Web3 infrastructure, streamlining the development process.
-
Additionally, Swan Chain supports paying for all Web3 services across different chains using a single cryptocurrency, lowering barriers to entry and saving developers time and effort in integrating various Web3 services.
-
Public data shows that during the testnet phase, Swan Chain had over 25 million active addresses on-chain, surpassed 2,000 computing providers network-wide, offered over 2,100 GPUs, and covered more than 30 regions across 17 countries globally, ensuring efficient execution of computing tasks and data security. As the only AI DePIN project selected in Batch IV of Binance Labs’ incubation program, Swan Chain has received investments from Binance Labs, SNZ, Waterdrip Capital, Protocol Labs, and Chainlink.
Unibase
-
Current data availability solutions like EigenDA, Celestia, and Avail are primarily designed for ledger transactions and face limitations: insufficient performance and capacity for AI and DePIN big data scenarios, reliance on DAC or DAS for off-chain data validation, and lack of Ethereum-level security and legitimacy.
-
Meanwhile, data used for AI training constantly faces trustworthiness challenges. Unibase therefore offers a zero-knowledge-proof-based AI data validation solution, enabling anyone to securely and economically deploy decentralized, verifiable, autonomous AI applications on Unibase. Unibase also functions as a DA and storage layer, supporting millions of DePIN devices contributing storage, compute power, and bandwidth for mining, providing secure, highly available storage and verifiable inference services, and supplying high-quality native data for AI training. Compared to Swan, Unibase primarily targets the AI application side.
Parasail
-
Parasail is a re-staking protocol dedicated to serving DePIN. While DePIN projects have the potential to generate sustainable revenue through decentralized infrastructure and services, widespread adoption and trust-building are often difficult and costly. Parasail activates idle assets (such as staked or re-staked tokens) from mature networks to provide economic guarantees for DePIN services, helping attract more users and service providers.
-
Currently, Parasail mainly offers re-staking services on the Filecoin chain, with plans to expand to Iotex, Arbitrum, and Ethereum. Using FIL as an example, here’s how Parasail works:
-
FIL Staking and Tokenization: Storage Providers can stake FIL and mint pFIL tokens at a 1:1 ratio.
-
pFIL Open Market: Storage Providers can sell pFIL for liquidity, while token holders can purchase pFIL to earn FIL mining returns.
-
<
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
Waterdrip Capital
