Decentralized physical infrastructure networks (DePINs) will be Web3’s “next big use case,” with the potential to onboard “a significant number of new users to the crypto space,” according to a Sept. 5 report by MV Global, a Web3 investing firm.
“Real-world adoption has accelerated with hundreds of thousands of users of multiple individual protocols,” MV Global said. “[T]his is only the start of what we think will be a massive wave of growth… not only for current Web3 users but also for Web2 converts.”
DePINs are blockchain protocols aimed at decentralizing real-world infrastructure and systems, including communications networks, data warehouses, energy markets, and more. According to MV Global, the ecosystem currently comprises upward of 1,000 projects and represents more than $50 billion in aggregate market capitalization.
By leveraging token incentives and onchain governance, DePINs are addressing longstanding challenges—including “the cold start problem” for resource-intensive networks—and significantly cutting infrastructure costs, the report said.
“DePIN projects clearly show what crypto is really good for and can solve real-world problems,” MV Global said.
The DePIN landscape. Source: MV Global
Connectivity protocols — such as Helium, which focuses on mobile networks — are displacing “enormously expensive” legacy infrastructure by crowdsourcing capital expenditures. The report said emerging projects to watch include Destra.network, Chirp, and Andrena.
Sensor networks — such as Dimo, Hivemapper, and Geodnet — operate devices in physical spaces and capture valuable data. The report said emerging DePIN use cases include decentralized energy storage solutions and marketplaces, such as Daylight, EC3, and Entheos.
Meanwhile, DePIN-specific blockchains, such as Peaq and IoTeX, are emerging to meet DePIN projects’ specific needs, according to MV Global.
Buoyed by demand from artificial intelligence (AI) applications, the market for decentralized data storage and compute protocols, including incumbent players like Filecoin and Arweave, is on track to hit $128 billion by 2028, the report said.
“The growth in connectivity, sensors, and emerging primitives like energy networks highlights the tangible impact DePINs can have on real-world infrastructure,” the report said.
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