Partner
DIMO - a driver network powering the future of mobility by helping drivers get the most out of their cars;
ICP - a universal blockchain that aims to provide a world computer that can replace traditional IT;
Natix Network - The first AI-driven dynamic map powered by DePIN and Drive-to-earn community.
Key Points
DePIN stands out as a niche market in the Web3 space with an extremely rich approach to different business operations;
Compared to other Web3 forks, DePIN businesses utilize more innovative revenue streams and incentive mechanisms, which vary according to business sectors (storage, computing, wireless networks, etc.) and project characteristics. Unique examples include activity-based rewards and green incentives. Other projects borrow from popular online payment models such as prepayment and subscription models.
DePIN currently seems to have a realistic chance to compete in Web2 and conquer parts of the market controlled by Internet giants such as Google, Amazon and Nvidia. However, to achieve this goal, the DePIN business model needs to become more sustainable and improve the efficiency of its revenue streams and incentive mechanisms. The competition is very fierce and never sleeps (now, we are talking about competition in the S&P 500, not CMC's TOP100);
The future of DePIN projects depends on how well they incentivize the demand side of the business. Decentralized physical infrastructure networks are very encouraging for supply-side participants, but still lack the ability to attract customers outside of Web3. The main challenge is to cross the gap into the general non-Web3 market.
The DePIN project was creative both methodologically and practically, and we found many out-of-the-box approaches, which we outline and explain in our report.
Why do we study DePIN business? Why should you care?
Building a sustainable business is never easy, and doing it on Web3 infrastructure feels more like an obstacle course.
If you read our first report on modular blockchain architecture, you’ll be familiar with the blockchain business-specific challenges associated with what we call the four blockchain dilemmas:
onchain.org/research/the-future-is-modular
This is what happens when you try to add profitability to the usual concerns (decentralization, security, and scalability), but what can you do? Profitability is what a business needs, right?
Thus, DePIN (Decentralized Physical Infrastructure Network) was born, a new narrative that, if implemented correctly, can compete with some of the most profitable businesses in the world. The DePIN project may eventually challenge Google, Amazon or Nvidia.
In this report you will get an overview of how DePIN company combines its revolutionary technology and incentive model with the business aspects of its projects. Our goal is to show you the different approaches, challenges and solutions to transform DePIN into a sustainable business.
We researched some of the most successful existing DePIN projects, analyzed their business models, and investigated the competitive Web3 landscape and beyond, providing you with a comprehensive understanding of the possibilities and risks of various DePIN niches and concepts.
This will help you make your participation more beneficial, and who knows, maybe DePIN will become the killer use case that the blockchain community has been waiting for more than 15 years, and you will be a part of it.
The Web3 world loves new narratives, and if there is both a clear investment opportunity and token incentives involved, hype is sure to follow.
Decentralized physical infrastructure meets all of these requirements:
This is a relatively new trend, although its first significant exponent – Filecoin – was launched in 2017;
It provides people with a large number of new investable projects, all of which issue tokens as incentives;
It allows users to earn tokens by performing actions without having to purchase tokens.
The best way to understand the usefulness of DePIN and how it works is to look at an example.
Three representative examples you may know
1. Computing Network - Akash
What problems does Akash solve?
Computing seemed destined to become the currency of the AI age, quietly infiltrating and gradually taking over our daily activities since before 2010, and finally made headlines when ChatGPT triggered an incredible burst of AI innovation in early 2023.
AI makes our lives more efficient and saves us time on automating activities beyond just repeatable tasks, however, putting a vast array of tasks and activities online has led to a massive increase in the demand for computing to support the increasingly complex AI algorithms.
As a result, companies offering AI solutions are now at the mercy of large vendors like Nvidia, which struggles to keep up with demand, or Amazon Web Services (AWS), whose software is centralized and expensive, and not everyone can (or wants to) afford it.
What is Akash Solutions?
Akash Network solves both of these problems. First, they provide a decentralized network of computing power providers, making AI algorithms more secure and reliable. Second, Akash creates a kind of Airbnb-like data center that enables people to lend unused computing power to companies and individuals in need, all in exchange for generous returns.
What are the noteworthy results?
In early 2024, there was a huge surge in activity on the Akash network, with active compute leases increasing from 600 to more than 2,200 in a few weeks, a total that is still negligible compared to AWS, which powers nearly 1.5 million global businesses.
However, Akash offers very competitive pricing: $5.83 per CPU on Akash versus $32.82 per CPU on AWS, combine this with a unique incentive model for providers, and you have something that could be enough to spur a major shift in computing power market share.
2. Wireless Network - Helium
What problems does Helium solve?
Helium focuses on key challenges in the wireless networking industry, including the need to reduce data transmission costs, improve security and privacy, increase scalability, and enhance the potential for innovation. The company also aims to mitigate economic risks such as token price volatility, network saturation, and competition from established telecommunications companies and other Web3 projects.
What are Helium's solutions to industry problems?
Reduced data transmission costs: Helium uses a proof-of-coverage consensus mechanism and existing infrastructure (hotspots), avoiding the cost of building new infrastructure;
Improved security and privacy: Helium’s decentralized architecture eliminates the possibility of single points of failure and reduces the likelihood of hacker attacks, and the network relies on pseudonymous device identifiers to improve privacy;
Improved scalability: Unlike traditional cellular networks, which have limited infrastructure capacity, the Helium network can easily grow as more hotspots are added;
Increased innovation potential: Helium’s open-source design and use of the HNT token encourage developers to create new devices and applications for the network, thereby promoting innovation.
How does Helium address issues specific to the decentralized web?
Token price volatility: Helium explores alternative monetization models, such as data credits for specific data transfers, to reduce reliance on token value and reduce volatility;
Network saturation: Helium implements mechanisms to prevent excessive hotspot deployment in concentrated areas, aiming to maintain a balanced network distribution. In addition, coverage verification helps ensure that hotspots provide actual coverage.
Competition: Helium is targeting a market niche for low-power, long-range IoT connectivity, with the potential to coexist with other solutions for high-bandwidth applications, and it also encourages collaboration with other networks by providing an open API for integration.
What are the noteworthy results?
In less than 30 days after its launch, Helium has generated significant traction with over 404,083 active hotspots, and Helium has raised a significant amount of funding in its last round of funding, with a post-money valuation in the $1B to $10B range.
The company has partnered with the city of San Jose, California, the municipal government of Valencia, Spain, and Dish Network for use cases as diverse as environmental monitoring, smart city sensors, and 5G coverage expansion.
3. Sensor Networks - Hivemapper
What problems does Hivemapper solve?
Hivemapper addresses several key challenges in global and local transportation and mobility management and operations:
Increased operational costs for road planning and construction, primarily due to the introduction of autonomous vehicles;
Provide the government with a reliable source of information on road maintenance;
There is a lack of real-time data to help insurance companies resolve disputes and issues related to accidents.
What is the Hivemapper solution?
Hivemapper’s APIs and imagery provide essential real-time traffic and mapping data, and the DePIN solution supports efficient fleet management, route planning, and package tracking through location sharing. Other industries, such as real estate, can also benefit from the network, with Hivemapper assisting with property valuation and planning, ensuring efficient land use, and ensuring regulatory compliance.
DePIN - Cryptocurrency Trend or Real World Opportunity?
The Web3 world loves new narratives, and if there are both clear investment opportunities and token incentives involved, the craziness of Crypto Twitter (or now Crypto X) is inevitable.
For speculators, that's all they need, but for those with a long-term vision, who want to build a thriving business or who want to change the world, if it turns out to be just a fad, then it can be a trap and you have to look at the whole picture to get the odds right.
Why is DePIN such a hot topic today?
1. Financial growth
Anyone who follows the cryptocurrency space knows that DePIN has seen significant market capitalization growth in recent months, with significant amounts of capital already invested in this blockchain use case.
When we compare the valuations of DePIN projects at the beginning of 2023 and at the beginning of 2024, the numbers speak for themselves, with Akash breaking through the top with a year-over-year growth of 1313%, and several other protocols growing by over 200%.
The following table lists the top 5 DePIN projects (those with higher market capitalization):
2. Hype Factor
Hype is not only created through financial opportunities, nor is it only about cryptocurrency prices, DePIN is a community discussion.
Web3 media is awash with this topic, and we looked at predictions for Web3 in 2024 from multiple experts and researchers and found DePIN to be present in almost all of them:
Trends like this are spreading to Web2, and retail interest is following suit, with Google Trends showing a significant uptick in searches for DePIN, indicating growing interest over the past year, and more importantly, that despite the brevity of most Web3 narratives, it appears to be relatively sustainable.
3. Technological uniqueness
Imagine a world where the construction and maintenance of critical infrastructure such as roads, power grids and communication networks are controlled not by central authorities but by a global community. This is the vision behind DePIN, which offers an innovative way to merge blockchain, the Internet of Things (IoT) and the physical world.
DePIN leverages blockchain technology to create a transparent and tamper-proof ledger recording network activity, which ensures secure and verifiable proof of contribution, eliminating trust issues and centralized control.
What makes DePIN so interesting as a technology is that it goes beyond the digital realm, using IoT as a bridge to connect physical infrastructure components to the network, closing the loop back to the real world.
Sensor-equipped hardware such as routers, towers, and renewable energy generators collect data and interact with the blockchain. This real-time data flow enables efficient monitoring, maintenance, and optimization of physical infrastructure.
The key to DePIN's success lies in its token-based incentive system. Participants who contribute physical hardware or provide valuable services will be rewarded with tokens, which have economic value and can be used within the network to pay for services, participate in governance decisions, etc.
It creates a self-sustaining economic model that incentivizes continued growth and maintenance. In addition, this ingenious incentive system solves a major obstacle for startups - the cold start problem. Even if the network is still young and small, it encourages people to join and contribute, thereby forming a strong network effect as early as possible.
4. Other factors
Environmental and economic efficiency: DePIN projects often highlight their potential to improve environmental and economic efficiency. By leveraging crowdsourced infrastructure and renewable energy, these projects can reduce costs and carbon footprint, making them attractive at a time when sustainable development is gaining global attention. In addition, some of them, such as Power Ledger, directly contribute to the increase in clean energy use.
Regulatory evolution: As governments and regulators around the world begin to understand and adapt to blockchain technology, there is an increasing opportunity for DePIN projects to integrate with traditional systems and markets. This regulatory evolution could open up new avenues for growth and mainstream adoption.
Global Connectivity Goals: With a large portion of the world’s population still lacking reliable internet access, DePIN projects aimed at expanding connectivity can reach a broad market, which is consistent with global initiatives to bridge the digital divide and provides a strong use case for investment and development in the sector.
DePIN tug-of-war between supply and demand
Building the supply side of DePIN
The foundation of every DePIN project is the physical assets that make up the physical infrastructure. Storage providers, computing power lenders, or some form of physical asset providers are the cornerstones of the decentralized network structure.
Attracting suppliers who own or can deploy these assets is the first step in establishing a DePIN, which is the supply side.
Early DePIN projects primarily use token-based rewards to incentivize the supply side (we are also exploring other incentives under the DePIN business), and this approach helps bootstrap the network by creating a clear value proposition for potential participants - they can earn rewards by contributing resources.
For example, Helium’s initial focus is on incentivizing the rollout of physical network hotspots to create a geographically broad base for its decentralized wireless service.
This approach can help attract individuals or companies to contribute time and resources if some key criteria are met, Below, you will find a list of initial considerations that should be taken into account for every new DePIN project.
Openness of hardware system
While a closed system allows for tighter control over equipment quality, guarantees network performance and simplifies technical support, it also limits the types of hardware that can be used, which can stifle innovation and potentially drive up costs.
Open systems allow participants to leverage compatible off-the-shelf equipment or even repurposed equipment, allowing for greater flexibility and faster expansion, but note that they present challenges in ensuring consistency and quality of service and can increase management complexity.
Equipment placement requirements
Physical coverage of DePIN systems is an issue and careful spacing is often required, and in wireless networks (Helium) or positioning systems (Geodnet), extreme local device density can cause interference and poor service.
In contrast, projects such as Render Network focus on maximizing the total available computing power (GPUs) without geospatial constraints, where systems with distance requirements can incentivize deployment in underserved areas or penalize oversaturation.
Affordability
Lower equipment costs lower the barrier to entry for contributors, which is critical for DePIN projects that leverage crowdsourcing infrastructure and attract a broad participant base. Highly accessible DePIN systems benefit from crowdsourcing deployment. Projects that rely on expensive, specialized hardware may find it more challenging to attract a large, distributed group of contributors.
Scalability through network expansion
Scalability is a key consideration for DePIN projects that want to expand their coverage and impact. By attracting more asset providers and expanding infrastructure deployment, projects can meet growing demand, enhance network coverage and support a larger user base.
In addition to scalability, supply-side distribution should be carefully planned to avoid limiting exposure to specific regions. Taking Filecoin as an example, miners in China account for more than 80% of the network's testnet storage mining computing power. The concentration in this area has raised concerns and criticisms about centralization, posing a challenge to its development.
Demand-side considerations for DePIN
“Supply comes first, but demand cannot be ignored.”
Many DePIN projects will initially prioritize building a strong supply base, which is not a bad approach, however, neglecting the demand side too early can be harmful. If there is insufficient demand, the network transmitting data will provide limited returns to the supply side unless demand is generated, and if there is demand, it needs to be able to reach the available market.
Unlike other Web3 verticals, the DePIN system can generate early revenue by meeting the needs of existing markets and providing solutions that go beyond existing ones, which is arguably DePIN’s biggest advantage over other Web3 fields.
This also means that DePIN can provide solutions beyond the Web3 ecosystem and enter the market dominated by Web2. However, it is challenging for almost all DePIN projects to attract users outside of Web3. We will further explore the competitive landscape in the report.
Even when the advantages are clear and can save up to 80% or more (as is the case with Akash), convincing users can be difficult. Below, you can see a direct cost comparison between Akash and its top Web3 competitors.
The reasons are varied, with high barriers to entry in many mainstream markets due to the dominance of Google and AWS, which have already built credibility and earned the trust of users, the convenience of sticking with more or less satisfactory solutions and the fear of change posing huge obstacles.
Beyond that, a lack of familiarity with market dynamics led to inconsistent communication and a lack of a clear value proposition for non-Web3 customers.
Every DePIN has its own challenges, if you are a hardware DePIN then you have supply chain issues that inhibit your network growth, if you are a software DePIN then you may have retention issues depending on active vs passive contributions. - Alireza Ghods, Co-founder, NATIX Network
But Web3 players are gaining experience, and DePIN projects targeting Web2-dominated markets are already thinking of creative solutions to help them cross the chasm (more on this later).
How individuals can use DePIN
DePIN provides perception data for its network. Let’s further break down the supply and demand sides of DePIN and explore how individuals can utilize the project through both social benefits and reward income.
1. Make social or environmental contributions
We’ll demonstrate this with an example: Airly provides a solution for maintaining air quality through a sensor network and data platform. The service is particularly beneficial to users within the Helium network because it enables hyperlocal, real-time air quality data collection and analysis. Governments, businesses, and communities can use Airly’s insights to make informed decisions about environmental policies and actions to reduce emissions and protect public health.
Airly’s Qualitair Corse case study examined the efficiency of 12 Airly sensors deployed across Corsica to monitor particulate matter and nitrogen dioxide levels. The project’s goals were to identify sources of pollution, particularly in ports, evaluate air quality improvement initiatives, and advocate for changes in environmental policy. It also tracked particulate matter in Saharan Dust to support government action and raise public awareness.
Everyone on the supply side contributes to society.
Whether you're extending cellular networks to your neighborhood or monetizing vehicle data, these are opportunities that you as a consumer couldn't capture before, people couldn't say, hey, I want to support infrastructure, it wasn't cheap enough, it wasn't easy to build that infrastructure. - Alex Rawitz, co-founder of DIMO
2. Get rewards from DePIN
Individuals are typically rewarded with tokens for their contributions to the network, and while this is a strong incentive, the stories we hear from users powering the DePIN network are varied.
We spoke to two users who spent around $600-800 to install equipment in busy metropolitan areas but did not see the returns they expected from programs like Helium.
They all told us about their initial enthusiasm for the project, the use cases were exciting and innovative, one of which involved locating lost fishing nets in the ocean through debris embedded in them, and even the authorities praised the usefulness of this unique application in leveraging the network to accomplish the impossible.
However, as the story unfolded, users expressed disappointment with the actual results of their investment in technology, spending around $400 on a mining kit and $250-300 on antennas and cables, only to then face 7-9 month delivery delays.
When they finally completed the setup, they encountered network saturation issues as more devices were activated nearby, increasing competition and decreasing returns. Despite attempts to optimize the setup by experimenting with different antennas and locations, the results were less than satisfactory. Both of our interviewees criticized the lack of guidance on optimizing device performance and shared their frustration with inconsistent and often poor data mining yields.
It’s a disappointing story, but there are also many that are positive and inspiring, and in other cases rewards for supply-side individuals can be genuinely beneficial, for example, Hivemapper users often share their earnings on social media and are pleased with the bounties for contributing to expanding the network.
The core of each DePIN project is different, and the different user experiences should not be surprising, and we will explore the reasons in detail in the DePIN business section.
DePIN Niche Market and Related Projects
Before we get down to business, we want to make sure you are on the same page with us, below you will find a short overview of the items we will unpack in the main part of the report and a description of the DePIN niche (a kind of glossary), if you are familiar with these items, feel free to skip ahead.
Decentralized computing
Individuals are encouraged to share their unused computing power and allocate these resources to a decentralized cloud network - in exchange for tokens.
Major projects:
Akash - a decentralized computing marketplace designed to seamlessly connect GPU power lenders with companies and individuals in need;
Render - a decentralized GPU network similar to Akash, but focused on artists and studios that need rendering power;
Livepeer - A decentralized video infrastructure focused on making unused computing resources on the supply side of the market available primarily to filmmakers and livestreamers on the other side.
Decentralized Storage
Utilizing a distributed network of nodes to store data, rather than relying on a centralized server or service provider, these files are typically encrypted, broken into smaller pieces, and distributed across multiple independent computers, making the data resilient to disruptions.
Major projects:
Filecoin – a decentralized data storage marketplace that connects users with providers in a peer-to-peer network that uses economic incentives and strong cryptography to guarantee the reliability and security of files;
Arweave – A decentralized storage protocol that aims to ensure permanent and immutable preservation of data, which it achieves through a novel payment structure in which users provide a one-time upfront payment to store data indefinitely.
Decentralized wireless network
DePIN leverages blockchain technology and token incentives to create and maintain wireless communication networks in a decentralized manner, which encourage individuals to contribute hardware (such as hotspots, routers, and other wireless devices) to establish connectivity services such as WiFi hotspots and other wireless communication services.
Major projects:
Helium – A decentralized telecommunications network that connects IoT devices to the internet using LoRaWAN technology. Also known as “the people’s network,” Helium has achieved a milestone of over 150,000 hotspots deployed worldwide in just over two years.
Pollen Mobile – A decentralized, user-owned and operated mobile network that leverages blockchain technology and token incentives to create a privacy-focused, affordable wireless communications ecosystem.
Decentralized sensor networks
Thanks to DePIN, users can also earn rewards by simply providing valuable data. Projects building decentralized sensor networks collect information from individual users and resell it to third parties or institutions, who can also turn it into actionable insights and recommendations.
Major projects:
Hivemapper – a project that incentivizes individuals to generate and share vehicle map data using plug-and-play sensors, functioning like a decentralized, community-owned Google Maps;
DIMO – A similar project to Hivemapper, but more focused on vehicle-related data, it rewards users for their contributions through token incentives and additional features such as private location tracking, vehicle health diagnostics, virtual glove boxes, and privacy-preserving GPS;
Sweatcoin – the concept of earning money by exercising, representing an incentive for individuals to improve their physical activity. This example is particularly interesting because it was originally a Web2 application that migrated to Web3 after more than 100 million users tested its model;
Geodnet – A decentralized network that leverages real-time movement data, which incentivizes users to share their personal location data, which greatly helps improve positioning accuracy compared to standalone GPS devices.
Other decentralized networks
DePIN is obviously not limited to these four use cases, and as the industry evolves, more and more examples expand the initial DePIN classification.
Important examples:
Theta (Content Delivery) - A decentralized video delivery network that aims to improve the quality of video streaming by leveraging a peer-to-peer network of nodes to efficiently deliver content. Theta Network incentivizes users to share bandwidth by rewarding them with tokens.
IoTeX (Universal DePIN Infrastructure) - a project that provides a comprehensive blockchain-based infrastructure to enhance DePIN’s development and operational capabilities, which is specifically focused on building the technological backbone for interconnecting and managing physical assets through blockchain-driven networks;
Lisk (Universal L2 DePIN Infrastructure) - An L2 infrastructure that allows for the seamless transfer of tokenized real-world assets (RWA) into Ethereum’s DeFi ecosystem;
Power Ledger - A blockchain network focused on decentralized energy trading to accelerate the adoption of clean energy. It enables individuals to transfer surplus energy from sustainable sources and earn additional income in exchange. One could call it the Airbnb of green energy.
Orchid (decentralized VPN) - a network of VPN providers where users can set up custom multi-hop connections and pay with cryptocurrency, which acts as a marketplace for individuals to sell their own servers as VPN nodes - a unique approach for this type of service compared to non-Web3 offerings;
EdgeMatrix Computing / EMC (Decentralized Edge Computing Infrastructure) - EMC is the leading AI DePIN in the AI + Web3 field, bridging the computing power network and AI (d) apps. EMC co-released the world's first GPU RWA.
Note from ICP who contributed to this report
ICP is one of the leading DePIN networks, hosted by special node machines dedicated to creating sovereign networks, managed by an advanced DAO, and container smart contracts that can rent out computing power and storage space on the network.
Possible DePIN use cases
You create a DePIN network of physical sensors to monitor soil moisture, the signed output of these sensors can be directly and easily verified on the Internet Computer to ensure that it has not been tampered with, and this evidence can also be shared to other chains such as Bitcoin or Ethereum through ICP's Chain Fusion technology, or even to traditional Web2 systems through ICP's ability to make HTTP calls.
ICP smart contracts come with bundled storage, making it possible to tag other relevant data, such as pictures or videos, alongside data from the DePIN infrastructure. For example, a decentralized solar panel network with additional data (such as weather patterns, time-lapse videos captured by cameras, etc.) can be tagged via additional input sources and mapped directly to the blockchain.
What entrepreneurs need to know
ICP offers a pay-per-use model:
calculate
storage
Communication costs
All other functionality (i.e. threshold signing, reading and writing to the Bitcoin blockchain, calling smart contracts on the EVM chain, etc.)
Potential Income Sources:
The standard Web3 model, where user payments are a natural feature of the platform;
Flexible use of traditional Web2-like revenue models through a reverse gas model;
Infrastructure components - Since containers are composable services, people who provide functionality (backend services) to other containers/dApps can charge for it.
Potential business models:
AI - monetize training data and monetize trained models;
Leverage ICP’s capabilities (integration with Web2 and other chains, computing, and storage) to provide services (automation, governance, oracles, etc.) for dApps on other blockchain platforms;
Building a DePIN network on top of ICP, for example, using HTTP callouts to enable smart contracts to interact with external infrastructure, see Loka Mining.
DePIN dApp Example
Loka Mining: Loka is a platform that enables retail investors to buy BTC at below-market prices without any centralized party risk by providing liquidity to Bitcoin miners, using trustless non-custodial custody and fully decentralized mining pools;
RentSpace: RentSpace is harnessing the power of blockchain technology and Web3 innovation to lead the future of real estate rentals. Their mission is to revolutionize the real estate industry by offering features such as TikTok-style video marketing, crypto and fiat payment integrations, collaborative booking, and action-based rewards programs.
DePIN as a business concept
It's time to get down to business.
Our report findings will provide you with a comprehensive overview of how DePIN companies are able (or not) to make money and operate sustainably. To achieve this goal, we analyzed the most prominent projects, examined the DePIN categories listed above, and evaluated the business models adopted by the projects in question.
Our research team analyzed their revenue streams and cost drivers, mapped the competitive landscape, and defined how each project positions itself compared to Web3 and Web2 competitors. The report also defines their typical DePINish mechanisms, such as incentives for the demand and supply sides of their business.
Finally, we assess their level of adoption and offer suggestions on how they can cross the chasm and reach mainstream (albeit typically B2B) audiences.
Below, you will find a summary of our analysis and a general overview of the various parts of DePIN's business model.
We recommend not to skip the last part of this section, as it provides the basis for the following ready-made business models, which are evaluated on three values:
The most popular method
the most effective way
The most promising approach
I hope it can make your entrepreneurial decisions in the DePIN project more data-driven!
Eight major sources of income
Let’s start with the most intuitive part of the business model. We discovered eight ways that the DePIN project makes money.
1. Transaction Fees/Commissions
This is currently the most popular approach, and is also used by non-DePIN Web3 projects. It usually involves deducting a small fee from transactions on the platform (for example, the platforms used by computing power markets such as Akash) or other activities related to running the project. In some cases (i.e. Livepeer), applications built on top of the protocol also incur fees.
Future commission-based revenue model developed by Akash:
2. Token value appreciation
This similar approach, which ranks second in popularity, is typical for other Web3 projects as well. A portion of the tokens issued by the DePIN project remain in the project’s treasury and can be used to generate returns based on token value appreciation. Since this model only works on positive price action, it is generally unsustainable in the long run and you should only view it as a short-term booster.
Example: DIMO and the revenue it generates by distributing $224 million worth of DIMO tokens to the initial team, which results in a 500% full-year growth in 2023.
3. API access / on-chain data sales
Some of DePIN’s categories, such as sensor networks, are all about data, which projects can sell to businesses that need it. For example, Hivemapper sells a map imagery API and allows insurance companies and similar customers to access street-level imagery around the world (starting at $0.85 per kilometer per week).
4. Pay-per-use
Pay-per-use pricing is used more and more frequently in the DePIN space and can be considered a separate revenue stream category, and given the diversity of industries in which DePIN projects operate, this approach provides customers with access to a very wide range of products.
5. Prepayment / Hardware
This revenue model is native to DePIN and enables projects to make specific allowances on the hardware needed to use their applications, such as sensors that collect data for the DIMO network.
Projects may also require on-chain upfront payments, with Helium users paying a one-time fee in HNT and Solana tokens to obtain a device for hotspot access, and potentially incurring additional activation or data plan fees.
So far, we’ve discussed the models of Web3 projects in general (transaction fees) and DePIN in particular (prepayments, API access), and as you’ll see further throughout this report, DePIN businesses will have to get creative in order to capture and keep their market share.
So open your mind and be prepared for more out-of-the-box models that might prove superior in the long run.
#Depin赛道 #DePIN项目 #Helium #EMC $ICP $FIL $AR
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