Author: Starpower
In the recent 'DePIN Power' podcast, Starpower co-founder Laser had an in-depth conversation with Messari researcher Dylan, discussing the applications and future developments of DePIN (decentralized physical infrastructure networks) in the energy sector.
Dylan is one of the top experts in the DePIN and RWA (real-world assets) fields. He 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 the progress of Starpower in energy DePIN and discussed the importance of blockchain platforms in promoting the DePIN ecosystem. This conversation delved into key issues of energy DePIN, global market opportunities, and considerations behind technology selection, bringing new insights to the integration of the crypto and energy industries.
[Click to watch the full podcast]
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 at Messari and his past experiences.
Laser
I’m very glad to have you here today, Dylan. You could say you're one of the top experts in the DePIN field and always bring a lot of deep insights. It's an honor to have you today; let me briefly introduce our situation.
I am a co-founder of Starpower. We are a DePIN project in the energy sector, and based on device activation volume, we should be the largest energy DePIN project currently. Today, we want to hold a podcast focused on the theme of DePIN.
We would love to hear about your personal background and what prompted you to join Messari, and we would also like to hear your thoughts on the recent developments in this industry. This field is currently very hot.
Dylan
Thank you for inviting me. I am a research analyst at Messari, mainly responsible for DePIN and RWA (real-world assets) infrastructure, as well as some AI-related content. This is part of our enterprise team's work.
Regarding my background, I previously worked at T. Rowe Price, which is a large asset management company in the United States, as a member of their digital asset team. I assisted in formulating their tokenization strategy and participated in some of their early investment outlooks, mainly focusing on mainstream crypto assets, but also including how to integrate these strategies into their multi-asset department. I have also worked in the crypto venture capital space. During college (Princeton), I co-founded a blockchain club and participated in various projects over the past 5 to 7 years. Early on, I was involved in a real estate tokenization startup, trying to tokenize homes and turn them into shares of rental properties.
Now I primarily focus on DePIN, which is definitely one of the hottest sectors in the crypto space right now. I also think it's the most interesting on a knowledge level.
Current dynamics in the crypto market
Dylan shared market dynamics such as the cryptocurrency bull market brought by Trump's election and the revival of DeFi.
Laser
Great, great. It sounds like you started getting involved in the blockchain industry back in college. I also saw your profile mentioning that you founded a blockchain-related organization during college, then moved into venture capital, and finally joined Messari. Messari is definitely the top research institution in this industry. So your experience is very rich, spanning from academia to non-research fields. Based on your experience, given the recent buzz in the crypto industry, 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's victory has sparked a bull market in cryptocurrency and the stock market, and even broader market sentiment has been affected. This is largely because Trump has shown support for cryptocurrencies. He has promised some measures, such as establishing a strategic Bitcoin reserve for the US and ending the SEC's crackdown on the crypto industry. He also mentioned releasing Silk Road founder Ross Ulbricht and overall supported cryptocurrency very much. This has triggered a Bitcoin-led bull market, and recently Bitcoin has surpassed $90,000, even reaching $93,000 when this conversation was recorded.
Other markets are also following this upward trend. For example, DeFi has performed very well, and some even call it a 'DeFi revival'. Derivatives platforms like Hyper Liquid are very popular, and tokens may be released soon. Jupiter and Raydium have also performed well. In terms of infrastructure, Solana, Avalanche, and even Ethereum, which performed poorly this year, have rebounded. DePIN has also performed well, such as Helium and other public token projects like io.net and Xnet, which have shown good performance over the past week. Overall, the sentiment in the crypto market is very positive. Additionally, the Federal Reserve plans to cut interest rates in December, coupled with an improving overall economic environment, which makes the market more optimistic. This is the overall situation right now.
The potential of DePIN as a bull market leader
Laser mentioned the possibility of DePIN as a bull market leader, and Dylan analyzed the current state of the DePIN field and its potential future impact.
Laser
Yes, I feel that after Trump's election, the entire crypto industry has indeed been greatly boosted, and we have reached historical highs. As for specific sectors in the crypto industry, I find that DePIN—although I might have some biases—could become the leader of this bull market. I would like to hear your thoughts on whether DePIN has the potential to lead this bull market or become one of the hottest narratives in the bull market.
I remember two years ago when we just founded Starpower, very few people knew about DePIN, especially since our team is based in Australia and East Asia, and hardly anyone was talking about it at that time. But after two years, this topic is starting to heat up. I would love to hear your thoughts on the DePIN industry, whether it has the potential to lead this bull market, and what its long-term prospects are.
Dylan
Of course. Over the past year, the DePIN field has achieved a lot of success. Initial funding has increased by over 500% year-on-year, and the performance of public tokens has been similar. Just comparing the third quarter, funding growth was nearly 700%. We've seen a significant increase in investor interest in DePIN in both early private markets and public markets. Many exciting DePIN protocols are emerging, covering energy, wireless communication, etc., such as GEONET's RTK base stations, Broadcast and Pipe's CDN networks, along with GPU computing networks, with new projects appearing almost every week. These DePIN projects are addressing very large problems and face a vast scalable market. I believe this positions DePIN as a potential leader in this market and in the coming years.
However, currently, there are not many public tokens for DePIN, and many of the most promising protocols are still in the testnet phase 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-world value through cryptographic technology, building real businesses. I believe this value creation is something that other industries cannot achieve. So regarding the narratives of DePIN, such as already released tokens like Render, io.net, Helium, I believe they will perform very well in this round of the market. Once those early protocols launch tokens and solidify their businesses, DePIN will experience a massive explosion, potentially becoming the largest sector in the crypto industry in the next 5 to 10 years.
The importance of the energy sector in DePIN (00:09:41 - 00:12:30)
Both parties discussed the huge potential of DePIN in the energy sector, especially in areas like solar panel deployment, virtual power plants, and demand response.
Laser
Yes, recently we saw the token of Grass go live and perform very well. I feel that in the next three to six months, DePIN will be very hot.
Okay, let's return to the topic of energy. We previously spoke with some people in the DePIN field, and some of them are very optimistic about energy-related DePIN projects. In the past six months, three to five energy-related DePIN projects have raised over $10 million each from institutions like a16z, USV, and Multicoin, and we have also raised from Alliance. I feel that it's hard to find another DePIN field with such momentum right now. What do you think?
Dylan
Yes, I believe energy is indeed one of the most exciting subfields of DePIN in this cycle. This is mainly because the opportunities in this field are immense. First, the world is striving to transition to cleaner energy, and many governments are trying to reduce carbon emissions. Clean energy, such as solar and wind, is the best way to achieve this goal. Currently, solar energy 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 first-tier venture capital has already recognized this.
Additionally, there are many issues in 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 address real-time data issues and aid in modernizing the grid. Therefore, incentivizing new solar deployments is a massive market. Analysts estimate that in the US alone, tens of trillions of dollars are needed annually to upgrade the grid to accommodate renewable energy. DePIN can solve a significant portion of this problem, which is very meaningful. This is why there are so many opportunities in this field and why it is exciting.
I believe energy is one of the most significant narratives in this cycle. The wireless sector has also performed well, with Helium recently reaching eight-digit annual revenue, along with DAWN and XNET achieving good results as well. Of course, these are also trillion-dollar issues, but energy is a matter of survival and potentially the largest market in the world. If DePIN can make a difference in the energy field, regardless of the level, it would be a huge breakthrough.
Differences between different DePIN protocols (00:12:44 - 00:17:13)
Dylan analyzed three main issues and directions in energy DePIN projects: incentivizing solar deployment, integrating distributed energy resources, and the marketization of real-world assets.
Laser
Yes. I think another reason energy DePIN has become a hot field is its close relationship with AI. Marc and Ben recently discussed the issues of AI and energy. On one hand, the congestion caused by increased computing demand, and on the other hand, the congestion of the US grid system and the speed of solar panel installations are accelerating. It's like an 'impossible triangle,' and solving this problem is a huge challenge. Ensuring sustainable power supply and the sustainable development of AI is a big issue. So energy DePIN is like AI's 'twin brother.'
Additionally, I would like to ask, energy is a very large field. You must have done in-depth research in this area. There are currently many projects in this field. From your perspective, what are the differences between these projects? For example, one project focuses on one issue while another focuses on another issue. What are the reasons and differences behind them?
Dylan
Yes, I believe each protocol in the energy sector is unique. Some protocols are indeed solving the same problems, while others are addressing multiple issues. So it's hard to categorize all protocols into one class. But I believe the three biggest issues currently are:
The first is incentivizing the deployment and installation of solar panels and solar power plants. By offering token rewards, people can overcome the barriers to installing solar energy, whether it's rooftop solar, solar power plants, or purchasing and connecting batteries or electric vehicle charging stations and other clean energy-related equipment. I believe this is an important area, and Starpower is doing this to some extent, along with some other projects in the US.
The second major issue is coordination, which involves integrating distributed energy resources (DER) into the grid. I believe blockchain is the best way to solve this problem because it provides verifiable on-chain data and can connect to DeFi blockchain networks. The composability of blockchain allows it to collaborate with many applications, thereby improving the efficiency of energy coordination. At the same time, it can incentivize users to share their data and even hand over their energy control to the operators of virtual power plants. These operators can create cost savings for the grid, and these savings will be passed on to users.
The third major issue is the marketization of real-world assets (RWA), such as investing in solar projects. These are like tokenized equity forms, where investors can obtain returns and profits through investment, and these processes are completely on-chain. This creates more liquidity for these assets, as their liquidity is very low in traditional markets. For example, investing in a solar power plant or wind turbine is very challenging in traditional markets. Blockchain can provide a platform for tokenization and trading of these assets through built-in DeFi markets and networks.
I believe these issues are closely linked, so many companies are working in these intersecting areas. At the same time, some companies are trying peer-to-peer energy trading, which is a very complex issue and is currently still in the early and conceptual stages. Therefore, I would categorize these issues into three classes, with each protocol addressing these issues in its own way, and sometimes they tackle all issues simultaneously.
Geographical focus and DePIN protocols (00:17:25 - 00:18:47)
Both parties discussed the focus of different DePIN protocols in different geographical areas and their potential for global expansion.
Laser
Yes, I think different protocols also focus on different geographical areas.
Dylan
Yes, yes, absolutely correct. I feel, for example, that Daylight is completely focused on the US, while Fuse is currently entirely focused on Europe. There are also projects that are more focused on the Asian market, some are global, or plan 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 huge (5 to 10 trillion dollars), I feel that there isn't much substantive competition among these protocols at the moment; they are more competing with Web2 and traditional solutions.
Laser
Yes, there is a lot of space in this field. If we put all Web3 energy DePIN projects in one room, we might not even be able to see each other because there’s so much going on in this field.
Dylan
Completely agree, completely 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 DePIN projects on Solana, EVM, and other blockchains. Dylan analyzed the reasons for Solana's popularity in DePIN projects.
Laser
I also have a question. DePIN is definitely one of the hottest narratives right now. We see many Layer 1 or Layer 2 blockchains pushing their DePIN ecosystems, with Solana being the most successful. We are also building on Solana.
After researching so many DePIN projects, what do you think? Some projects are built on EVM, some on Solana, and some on IoTeX and Polygon. From a technical or economic perspective, what are the differences between them?
Dylan
Yes, I think one interesting aspect of DePIN is that it is finally addressing a real problem. This is a real application scenario. I believe that most underlying blockchains, whether it’s Solana, Polygon, or Ethereum, can support DePIN. However, we do see many protocols choosing to build or migrate to Solana.
I think one reason is that Solana has been very focused on becoming an easy-to-use Layer 1 blockchain in recent years, with ultra-low transaction fees and high transaction capacity. This is very attractive to DePIN projects because they do not want to face network congestion like Ethereum and do not want to struggle to understand the experimental or liquidity fragmentation issues of Layer 2.
So Solana naturally becomes a default choice. The Solana team has also done a great job in promoting and supporting DePIN projects. For many DePIN projects, Solana is seen as a relatively secure building platform due to its few Layer 2 experiments. As for the purely theoretical discussions about the degree of decentralization or the 'Twitter debates' between Solana and Ethereum, these do not matter much to DePIN projects. DePIN projects are more focused on solving their own problems, such as coordination and network initiation. They just need a reliable and operational underlying network.
Moreover, because many DePIN projects are on Solana, the composability and interoperability among them become very easy. So Solana is gradually becoming the default building platform. The peaq you mentioned that went live yesterday also has a very strong ecosystem. IoTeX also has a strong ecosystem. These blockchains attract many projects by providing modular and service-oriented solutions for DePIN projects. In the future, we will see whether Solana continues to be the main platform or whether more decentralization will occur, with some DePIN projects choosing more 'customized' solutions. I would summarize the current landscape this way.
Laser
Yes, I personally feel that for DePIN projects, our top priority from a technical and deployment perspective is ease of use and low transaction fees. As you mentioned, whether it is fully decentralized is not important to us. Because the goal of all DePIN projects, or the problems we want to solve, are real-world issues. For example, for all energy-related DePIN projects, our goal is to accelerate the development of renewable energy in the real world, meet real needs, and solve practical problems.
So, whether it's IoTeX, peaq, Solana, or other EVM platforms, for projects, it doesn't matter which one to choose, as long as we are familiar with it. Additionally, in the early stages of projects, on-chain liquidity may be an important factor. This could influence our choice of which ecosystem to launch tokens and mainnet, as it requires the ecosystem to provide a lot of liquidity support. So from this perspective, Solana may have more advantages.
Future Outlook of DePIN (00:23:23 - 00:25:10)
Dylan is optimistic about the future of DePIN and predicts that there will be greater developments next year, especially with the further growth of energy-related projects after they launch on the mainnet.
Laser
This is just my personal opinion. I know it may be a bit biased towards our side. What do you think? Is there anything else you would like to share before we finish?
Dylan
Yes, overall, as we discussed, I think DePIN is one of the most exciting sectors in the crypto space. It is addressing real-world problems, which is rare in the crypto field. We are seeing many phenomena that have not appeared in the crypto industry before, such as very strong infrastructure and founders with Web2 backgrounds joining the DePIN space, looking to solve long-term problems in their respective industries that traditional methods cannot address. This makes me very optimistic about DePIN.
I believe what is currently being built are real businesses. For example, Glow, an energy-related project, has already achieved seven-figure revenue. Helium has reached eight-figure revenue, and Geodnet has achieved seven-figure revenue. We are starting to see on-chain revenue in DePIN, which has been a rare phenomenon in the crypto industry, except for a few areas.
I think next year will be a very important year for DePIN. We will see some protocols that already have a certain product-market fit continue to grow revenue and business. Some of the most exciting projects, especially energy-related ones, will launch tokens on the mainnet and begin to truly scale and develop their ecosystems. This year we have already seen crazy growth, and I think we will see even greater growth next year.
DePIN will become more well-known, not only within the crypto industry but also expanding beyond it. We will see more exciting ideas and innovations, as well as more outstanding founders entering this field. I am very optimistic about the future.
Laser
Yes, I believe DePIN can become a bridge between Web2 and Web3, allowing more Web2 people to understand Web3 in a positive way, rather than the negative image like that of FTX.
Conclusion and guest information (00:25:10 - 00:26:23)
Both parties summarized the content of the conversation. Dylan mentioned that his research results can be found on Messari or Twitter and previewed the upcoming DePIN energy report.
Laser
Okay, let's leave it here. Good night!
Dylan
Sure, thank you for inviting me to participate in this interview.
Everyone can find my published research on Messari, or follow me on Twitter, username @DylanBane. I will soon publish an energy report on DePIN, so if you're interested in DePIN, don't miss it.
Laser
Yes, I believe Dylan is one of the best researchers in the DePIN field. If you're interested in DePIN, be sure to follow Dylan's Twitter; there’s a lot of excellent information about investing in DePIN. Thank you very much for your participation today!
Dylan
Of course, thank you for having me!
