Author: Nancy, PANews
As one of the important drivers of cryptocurrencies going mainstream, the DePIN ecosystem has shown strong development momentum and has become one of the main investment lines that capital has flocked to so far. However, at this stage, the expansion of the DePIN market scale is mainly due to the "big strides" of the leading projects, and the overall profitability is limited, and it also faces risks such as supervision and network security.
The overall scale has exceeded 20 billion US dollars, with Ethereum and Solana ecosystems as the main
DePINscan data shows that as of September 19, there were about 276 DePIN projects, mainly divided into categories such as AI, wireless, energy, services, sensors, data and computing. At present, the overall market value of DePIN has reached nearly US$21.23 billion, an increase of 17.1% from the beginning of the year, of which the top ten projects accounted for about 80.5% of the market value, reaching US$17.08 billion.
DePIN Ecosystem Map Source: Messari
Judging from the distribution of DePIN projects on various chains, they mainly come from Ethereum, Solana, IoTeX and Polygon. Among them, the number of DePIN projects on Ethereum and Solana is 54 and 36 respectively. At the same time, DePINscan data shows that the total number of DePIN devices has exceeded 18 million, and the nodes are distributed in 195 countries and regions around the world, mainly concentrated in Asia, the United States, North America, India, Southeast Asia, Africa, and Europe.
In addition, the scale of DePIN financing has also increased significantly. According to the August DePIN industry report released by Messari, the scale of financing in the DePIN field increased by 296% year-on-year, of which the largest single financing was the $50 million financing completed by IoTeX in April. Among the other top five projects, io.net, DIMO, and Daylight all have in-depth cooperation with IoTeX in data verification, off-chain computing, or capital layers.
However, the overall revenue situation in the current DeFi field is not optimistic. According to Depin.Ninjia data, as of September 19, the cumulative revenue of the top 10 DePIN projects was only US$1.023 million.
As capital rushes into the market, the competition landscape may change dramatically
At present, the DePIN market is welcoming more competitive variables and growth space.
On the one hand, some institutions have launched DePIN investment funds with larger funds. For example, Borderless Capital recently launched a $100 million DePIN fund, whose LPs include Peaq, the Solana Foundation, and Jump Crypto, which focus on DePIN blockchains; UAE-based investment companies Hodler Investments and Gewan Holding plan to launch a $500 million fund to invest in DePIN and other fields; Bitrue Ventures launched a $40 million investment fund focusing on DePIN, RWA and other fields; the SOLLONG Foundation announced a new $30 million funding plan to promote the development of DePIN and AI; investment company Lemniscap announced that it has raised a $70 million fund to focus on investments in early Web3 projects such as DePIN, etc.
On the other hand, a large number of new DePIN projects backed by capital have also entered the market in recent times. For example, Fuse, the parent company of the renewable energy DePIN project Project Zero, recently announced the completion of a $12 million strategic financing led by Multicoin Capital; Wingbits Protocol, a DePIN flight tracking network, completed a $3.5 million seed round led by Borderless Capital and Tribe Capital; Andrena, a DePIN project based on Solana, completed a $18 million financing led by Dragonfly; Daylight, a DePIN project based on Base, received a $9 million Series A financing led by A16z Crypto; Verida, a DePIN network developer, completed a $5 million seed round with Simurg Labs, O-DE Capital Partners, ChaiTech Ventures, etc.; Peaq, a DePIN Layer1 protocol, completed a $20 million fundraising through CoinList; Blockless, a DePIN project, completed a total of $8 million in pre-seed and seed rounds, including pre-seed round financing led by NGC Ventures, and seed round financing jointly led by M31 Capital and Frachtis. The capital market's pursuit also confirms DePIN's strong development potential and attractiveness.
As for the rapid development of DePIN, Helium CEO Abhay Kumar pointed out with his own case when participating in the Token2049 roundtable dialogue that traditional markets that use advanced precision positioning services have promoted the development of DePIN to some extent, providing customers with more competitive value propositions, including lower costs, better coverage and easy integration. Application scenarios include civil surveying, high-definition mapping, construction, agriculture and other fields. Today, the attention of the crypto market has expanded from entertainment such as trading or storing value to real-world applications. In the case of Helium alone, billions of consumers and millions of businesses rely on map services. For the crypto field to become more important and popular than it is now in the next 5 or 10 years, crypto products and services need to succeed. GEODNET CEO Mike Horton added in the roundtable dialogue that a healthy and balanced token economy is a powerful tool for DePIN to return the actual use and value of the network to users. And as the network utility grows, the value of the token will also grow.
Rating agency Moody's also pointed out in its recently released first report on the DePIN field that DePIN can help existing networks expand and innovate. Specifically, existing network operators such as telecommunications companies and utility companies are facing growing user demand, which requires capital-intensive infrastructure development. Using a decentralized model can help them alleviate some of the pressure and remain competitive while artificial intelligence and the Internet of Things (IoT) disrupt old business models. And by combining the established parts of the system backbone with the building blocks of distributed ledger technology (DLT), DePIN has the potential to improve the reliability and efficiency of the network while reducing operating costs and optimizing resources and industry collaboration.
However, Moody's also pointed out that the widespread adoption of DePIN faces significant obstacles, including regulatory and interoperability issues, cybersecurity risks and the need for huge investment in infrastructure and skills. Unclear regulations and other risks may inhibit its growth.
