Author: Starpower
In the recent "DePIN Power" podcast, Starpower co-founder Laser and Messari researcher Dylan had an in-depth conversation to discuss the application and future development of DePIN (decentralized physical network) in the energy field. Dylan, one of the top experts in DePIN and RWA (real world assets), shared the latest trends in the cryptocurrency market and expressed an optimistic outlook on DePIN's potential to lead the next bull market. Laser introduced Starpower's progress in energy DePIN and discussed the importance of blockchain platforms in promoting the DePIN ecosystem. This conversation delved into the key issues of energy DePIN, global market opportunities, and considerations behind technology selection, bringing new inspiration to the combination of the crypto and energy industries.
The audio transcript and translation are generated by GPT, so there may be some errors. Please listen to the full podcast:
Starpower Youtube：https://youtu.be/j16dt4OxTyA
Opening and guest introduction
Laser invited Dylan to participate in the podcast to introduce the background of the Starpower project and the popularity of DePIN. Dylan introduced his work content and past experience at Messari.
Laser
I am very happy to have you here today, Dylan. You are one of the top experts in the field of DePIN and always bring a lot of profound insights. It is my honor to have you here today. Let me first briefly introduce our situation.
I am the co-founder of Starpower. We are a DePIN project in the energy sector. Currently, we are the largest energy DePIN project in terms of device activation volume. Today we would like to host some podcasts around the topic of DePIN.
We’d love to hear about your background and what brought you to Messari, as well as your thoughts on the industry as it’s a very hot space right now.
Dylan
Thanks for having me. I'm a research analyst at Messari. I'm responsible for DePIN, as well as RWA (real world asset) infrastructure, and some AI-related content. This is the work content of our enterprise team.
As for my background, I was previously at T. Rowe Price, a large asset management firm in the US, as part of their digital asset team. I helped develop their tokenization strategy and was involved in some of their early investment outlooks, mainly focused on mainstream crypto assets, but also how to integrate these strategies into their multi-asset division. I also worked in the crypto venture capital field before. I co-founded the blockchain club in college (Princeton) and have been involved in various projects over the past 5 to 7 years. I was also involved in a real estate tokenization startup project in the early days, trying to tokenize houses into fractions and convert them into rental property shares.
Right now I’m focusing on DePIN, which is definitely one of the hottest areas in crypto right now. I also think it’s the most interesting on an intellectual level.
Current Crypto Market Dynamics
Dylan shared market trends such as the cryptocurrency bull market and DeFi revival brought about by Trump’s election.
Laser
Great, great. It sounds like you've been involved in the blockchain industry since college. I also saw your profile, which mentioned that you founded blockchain-related organizations during college, then entered the venture capital field, and finally joined Messari. Messari is definitely the first research institution in this industry. So, you have a very rich experience, from academic fields to non-research fields. Based on your experience, the crypto industry has been very hot recently. Have you seen any new trends or interesting things? Of course, DePIN is one of them.
Dylan
Yes, I think the biggest news right now is the election. Trump won the election, which triggered a bull run in crypto and stock markets, and even broader market sentiment. This is largely because Trump has shown support for crypto. He promised measures such as establishing a strategic Bitcoin reserve for the United States and ending the US SEC's crackdown on the crypto industry. He also mentioned releasing Silk Road founder Ross Ulbricht and was generally very supportive of crypto. This triggered a wave of Bitcoin-led bull runs, and Bitcoin has recently exceeded $90,000 and even reached $93,000 when this conversation was recorded.
Other markets are following this rally, with DeFi doing very well, with some even calling it a "DeFi renaissance." Derivatives platforms like Hyper Liquid are very popular and may soon release tokens, as well as Jupiter and Raydium. Infrastructure players like Solana, Avalanche, and even Ethereum, which has been a poor performer this year, are also picking up. DePIN is also doing well, with Helium and other public token projects like io.net and Xnet having good performances over the past week. Overall, the sentiment in the crypto market is very positive. In addition, the Fed's plan to cut interest rates in December, coupled with the overall positive economic environment, is making the market more optimistic. That's the overall picture right now.
DePIN’s potential as a bull market leader
Laser mentioned the possibility of DePIN as a bull market leader, and Dylan analyzed the current status of the DePIN field and its possible future impact.
Laser
Yes, I think the entire crypto industry was indeed greatly boosted after Trump's election, and we also reached a new all-time high. As for specific sectors in the crypto industry, I find that DePIN - although I may have some personal bias - may become the leader of this bull market. I would like to hear your opinion on whether DePIN has the potential to lead this bull market or become one of the hottest narratives in the bull market?
I remember when we first founded Starpower two years ago, few people knew about DePIN, especially since our team was located in Australia and East Asia, and almost no one talked about this topic. But after two years, this topic is now hot. I would like to hear your views on the DePIN industry, whether it has the potential to become the leader of this bull market, and what its long-term prospects are?
Dylan
Of course. There have been a lot of successes in the DePIN space over the past year. Early stage financing has grown by more than 500% year-over-year, and public tokens have performed similarly. Comparing the third quarter alone, financing growth was close to 700%. We have seen a significant increase in investor interest in DePIN, both in the early private market and in the public market. There are many exciting DePIN protocols emerging, covering areas such as energy and wireless communications, such as GEONET's RTK base stations, Broadcast and Pipe's CDN networks, and GPU computing networks, with new projects appearing almost every week. These DePIN projects are solving very big problems and facing a broad scalable market. I think this makes DePIN a possible leader in this round of the market, and even in the next few years.
However, there are not many public tokens for DePIN at present, and many of the most promising protocols are still in the testnet stage or early stage. These projects are more focused on building business, token economics, and game theory, rather than rushing to launch tokens. I think this is a good thing. The biggest advantage of DePIN is that it creates real real-world value and builds real business through encryption technology. I think this kind of value creation is not possible in other industries. So the narrative about DePIN, such as the tokens that have been released, like Render, io.net, and Helium, I think they will perform very well in this round of the market. And once those early protocols launch tokens and consolidate their businesses, DePIN will usher in a big explosion, and may become one of the largest or even the largest sectors in the encryption industry in the next 5 to 10 years.
The importance of the energy sector in DePIN (00:09:41 - 00:12:30)
The two sides discussed the huge potential of DePIN in the energy sector, especially in the areas of solar panel deployment, virtual power plants and demand response.
Laser
Yes, we recently saw the launch of Grass tokens, which performed very well. I feel that in the next three to six months, DePIN will be very hot.
OK, let's get back to the topic of energy. We have talked to some people in the DePIN field before, and some of them are very optimistic about energy DePIN projects. In the past six months, three to five energy DePIN projects have raised more than $10 million from institutions such as a16z, USV, Multicoin, and we have also raised funds from Alliance. I think it is difficult to find another DePIN field with such momentum recently. What do you think about this?
Dylan
Yes, I think energy is indeed one of the most exciting DePIN sub-sectors in this cycle. This is mainly because the opportunity in this area is so huge. First, the world is working to transition to cleaner energy, and many governments are trying to reduce CO2 emissions. And clean energy, such as solar and wind, is the best way to achieve this goal. Currently, solar is the cheapest energy in the world, and DePIN may be the best way to incentivize the installation and expansion of solar panels, at least in terms of capital efficiency. This is a huge opportunity, and Tier 1 venture capital has recognized this.
Additionally, there are many issues with integrating solar panels and distributed energy resources into the grid. Coordinating these resources is a huge challenge, and virtual power plants and demand response programs can solve the real-time data problem and help in modernizing the grid. Therefore, incentivizing new solar deployment is a huge market. Analysts estimate that trillions of dollars will be needed each year in the United States alone to upgrade the grid to accommodate renewable energy. And it makes a lot of sense that DePIN can solve a large part of this problem. This is why there are so many opportunities in this field and why it is exciting.
I think energy is one of the most prominent narratives in this cycle. The wireless space is also doing well, with Helium recently reaching 8-figure annualized revenue, and DAWN and XNET, which are also doing well. Of course, these are trillion-dollar issues, but energy is an existential issue and probably the largest market in the world. If DePIN can make a difference in the energy field, it will be a huge breakthrough at any level.
Differences between different DePIN protocols (00:12:44 - 00:17:13)
Dylan analyzed three main issues and directions in the Energy DePIN project: incentivizing solar deployment, integrating distributed energy resources, and marketization of real-world assets.
Laser
Yes. I think another reason why energy DePIN has become a hot field is that it is closely related to AI. Marc and Ben recently discussed the issue of AI and energy. On the one hand, there is congestion caused by the increase in computing demand, and on the other hand, there is congestion in the US power grid system and the accelerated installation of solar panels. It is like an "impossible triangle" and it is a huge challenge to solve this problem. How to ensure sustainable power supply and the sustainable development of AI is a big problem. So energy DePIN is like the "twin brother" of AI.
In addition, I would like to ask, energy is a very large field. You must have done in-depth research in this field. There are many projects in this field. From your perspective, what are the differences between these projects? For example, one project focuses on this issue, while another project focuses on another issue. What are the reasons and differences behind them?
Dylan
Yes, I think every protocol in the energy space is unique. Some protocols are really solving the same problem, and some are solving multiple problems. So it’s hard to put all protocols in one category. But I think the three biggest problems right now are:
The first is to incentivize the deployment and installation of solar panels and solar farms. Through token rewards, people can overcome the barriers to installing solar energy, whether it is rooftop solar, solar farms, or purchasing and connecting clean energy related equipment such as batteries or electric vehicle charging stations. I think this is an important area, and Starpower is also doing this to a certain extent, and there are some other projects in the United States doing similar things.
The second big issue is coordination. That is, integrating distributed energy resources (DER) into the grid. I think blockchain is the best way to solve this problem because it provides verifiable on-chain data and can be connected to DeFi blockchain networks. The composability of blockchain allows it to work with many applications to make energy coordination more efficient. At the same time, it can also incentivize users to share their data and even hand over control of their energy to operators of virtual power plants. These operators can create cost savings for the grid, which are passed on to users.
The third big issue is about the marketization of real world assets (RWAs), such as investing in solar projects. These are like tokenized equity forms, where investors can get returns and income through their investments, and these processes are completely on-chain. This creates more liquidity for these assets, because in traditional markets, these assets have very low liquidity. For example, investing in a solar farm or wind turbine is very difficult in traditional markets. Blockchain can provide a platform for tokenization and trading of these assets through built-in DeFi markets and networks.
I think these problems are very interconnected, so there are a lot of companies working on these intersections. There are also companies trying to do peer-to-peer energy trading, which is a very complex problem and is still in the early stages and conceptual stage. So, I would put these problems into three categories, and each protocol is solving these problems in its own way, and sometimes they will solve all of them at the same time.
Geographical Regions and DePIN Protocol Concerns (00:17:25 - 00:18:47)
The two sides discussed the focus of different DePIN protocols in different geographical regions and the potential for these protocols to expand globally.
Laser
Yes, I think different protocols also focus on different geographic areas.
Dylan
Yes, yes, absolutely. I think for example, Daylight is completely focused on the United States, and Fuse is currently completely focused on Europe. There are also projects that focus more on the Asian market, and some projects are global or intend to build a global virtual power plant. So, different protocols have different approaches and geographical divisions. At the same time, because the energy market is so large (5 to 10 trillion US dollars), I don’t think there is much substantive competition between these protocols at the moment, but more competition with Web2 and traditional solutions.
Laser
Yes, the space in this field is very large. If you put all the Web3 energy DePIN projects in a room, we might not even see each other because there are so many things in this field.
Dylan
Totally agree, totally agree.
Performance of different blockchain platforms in the DePIN ecosystem (00:18:51 - 00:23:23)
Laser and Dylan discussed the differences in the deployment of the DePIN project on Solana, EVM, and other blockchains. Dylan analyzed why Solana is popular in the DePIN project.
Laser
I have another question. DePIN is definitely one of the hottest narratives right now. We see many Layer 1 or Layer 2 blockchains promoting their DePIN ecosystems, and the best performing one is Solana. We are also building on Solana.
What do you think after you have studied so many DePIN projects? Some projects are built on EVM, some on Solana, and some on IoTeX, Polygon. What are the differences between them from a technical perspective or an economic perspective?
Dylan
Yes, I think the interesting thing about DePIN is that it is finally solving a real problem. It is a real application scenario. I think most of the underlying blockchains, whether it is Solana, Polygon or Ethereum, can support DePIN. But we do see a lot of protocols choose to build on Solana or migrate to Solana. I think one of the reasons is that Solana has been very focused on being an easy-to-use Layer 1 blockchain in the past few years, such as extremely low transaction fees and high transaction capacity. This is very attractive to DePIN projects because they don’t want to face network congestion like Ethereum, nor do they want to struggle to understand the experimental or liquidity split issues of Layer 2. So Solana naturally becomes a default choice. The Solana team has also done a very good job in promoting and supporting DePIN projects. In the eyes of many DePIN projects, Solana is a relatively safe platform to build on because it has fewer Layer 2 experiments. As for the purely theoretical discussions about the degree of decentralization, or the "Twitter debate" between Solana and Ethereum, these are not important to DePIN projects. DePIN projects are more focused on solving their own problems, such as coordination and network launch. They just need a reliable and functioning underlying network. Moreover, since many DePIN projects are on Solana, composability and interoperability between each other become very easy. So Solana has gradually become the default building platform. You mentioned peaq, which was launched yesterday, and it also has a very strong ecosystem. And IoTeX also has a strong ecosystem. These blockchains have attracted many projects by providing modular and service-oriented solutions for DePIN projects. In the future, we will see whether Solana will continue to be the main platform, or there will be more decentralization, and some DePIN projects will choose more "customized" solutions. I would summarize the current situation like this.
Laser
Yes, I personally feel that for the DePIN project, from a technical perspective and a deployment perspective, our top priority is ease of use and low transaction fees. As you mentioned, whether it is fully decentralized or not is not important to us. Because the goals of all DePIN projects, or the problems we want to solve, are real-world problems. For example, for all energy DePIN projects, our goal is to accelerate the development of renewable energy in the real world, meet real needs, and solve real problems. So, whether it is IoTeX, peaq, Solana or other EVM platforms, for the project, it doesn’t matter which one we choose, as long as we are familiar with it. In addition, in the early stages of the project, on-chain liquidity may be an important factor. This may affect which ecosystem we choose to launch tokens and mainnet on, because this requires a lot of liquidity support from the ecosystem. So, from this perspective, Solana may have more advantages.
Future prospects of DePIN (00:23:23 - 00:25:10)
Dylan is full of expectations for the future of DePIN and predicts that DePIN will have greater development next year, especially the further growth of energy-related projects after they are launched on the mainnet.
Laser
That's just my personal opinion. I know it might be a little biased on our side. What do you think? Anything else you want to share before we close?
Dylan
Yes, in general, as we discussed, I think DePIN is one of the most exciting sectors in the crypto space. It is solving real problems, which is rare in the crypto space. We see a lot of phenomena that have not appeared in the crypto industry before, such as founders with very strong infrastructure and Web2 backgrounds joining the DePIN field, who hope to solve long-term problems in their industry through DePIN, which cannot be solved by traditional methods. This makes me look forward to DePIN. I think there are some real businesses being built now. For example, Glow, an energy-related project, has achieved seven-figure revenue. Helium has achieved eight-figure revenue, and Geodnet has achieved seven-figure revenue. We are seeing on-chain revenue starting to appear in DePIN, which is a phenomenon that has rarely been seen in the crypto industry before, except for a few fields.
I think next year is going to be a very important year for DePIN. We will see some protocols that already have some product-market fit continue to grow revenue and business. Some of the most exciting projects, especially in the energy sector, will launch tokens on the mainnet and start to really expand and grow their ecosystems. We have seen crazy growth this year, and I think we will see even more growth next year.
DePIN will become more well-known, not only within the crypto industry, but also outside the industry. We will see more exciting ideas and innovations, and more outstanding founders entering this field. I am full of expectations for the future.
Laser
Yes, I believe DePIN can be a bridge between Web2 and Web3, allowing more Web2 people to understand Web3 in a positive way, rather than the negative image like FTX.
Closing remarks and guest information (00:25:10 - 00:26:23)
The two sides summarized the conversation, and Dylan mentioned that his research results can be found on Messari or Twitter, and previewed the upcoming DePIN energy report.
Laser
Okay, let’s stop here then, good night!
Dylan
Okay, thank you for inviting me to participate in this interview.
You can find my published research on Messari or follow me on Twitter at @DylanBane. I will be releasing an energy report on DePIN soon, so don’t miss it if you are interested in DePIN.
Laser
Yes, I think Dylan is the best researcher in the DePIN field. If you are interested in DePIN, be sure to follow Dylan's Twitter, his content contains a lot of great information about investing in DePIN. Thank you very much for participating today!
Dylan
Of course, thanks for having me!