Analyzing the DePIN competitive landscape: Leading projects occupy 80% of the market but generate minimal revenue, while a wave of capital influx is approaching
As one of the important drivers of cryptocurrency moving towards the mainstream, the DePIN ecosystem shows strong development momentum and has become one of the main investment lines attracting capital influx to date.Author: Nancy, PANews
As one of the important drivers of cryptocurrency moving towards the mainstream, the DePIN ecosystem shows strong development momentum and has become one of the main investment lines attracting capital so far. However, the current expansion of the DePIN market scale is mainly driven by leading projects "marching" forward, and the overall profitability is limited, facing risks such as regulation and cybersecurity.
Overall scale has surpassed $20 billion, with Ethereum and Solana ecosystems as the main contributors
According to DePINscan data, as of September 19, there are approximately 276 DePIN projects, mainly categorized into AI, wireless, energy, services, sensors, data, and computing. Currently, the overall market capitalization of DePIN has approached $21.23 billion, an increase of 17.1% since the beginning of the year, with the top ten projects accounting for about 80.5% of the market cap, reaching $17.08 billion.
DePIN ecosystem chart Source: Messari
From the distribution of DePIN projects across 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. Meanwhile, DePINscan data shows that the total number of DePIN devices has exceeded 18 million, with nodes spread across 195 countries and regions, mainly concentrated in Asia, the United States, North America, India, Southeast Asia, Africa, and Europe.
Additionally, the financing scale of DePIN is also experiencing significant growth. According to Messari's August DePIN industry report, the financing scale in the DePIN field has increased by 296% year-on-year, with the largest single financing being $50 million completed by IoTeX in April. The other top five projects, including io.net, DIMO, and Daylight, have deep collaborations with IoTeX in data verification, off-chain computing, or capital layers.
However, the overall revenue situation in the DeFi sector is not optimistic. Depin.Ninjia data shows that as of September 19, the cumulative revenue of the top 10 DePIN projects is only $1.023 million.
Capital is flocking in, and the competitive landscape may undergo significant changes
Currently, the DePIN market is also welcoming more competitive variables and growth opportunities.
On one hand, some institutions have launched large-scale DePIN investment funds. For example, recently, Borderless Capital launched a $100 million DePIN fund, with LPs including blockchain Peaq focused on DePIN, the Solana Foundation, and Jump Crypto; investment companies Hodler Investments and Gewan Holding based in the UAE 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 and RWA; the SOLLONG Foundation announced a new $30 million funding plan dedicated to promoting DePIN and AI development; and investment company Lemniscap announced it has raised a $70 million fund focused on early Web3 projects like DePIN.
On the other hand, a large number of newly capital-backed DePIN projects have also entered the market recently. For instance, the parent company of the renewable energy DePIN project Project Zero, Fuse, announced the completion of a $12 million strategic financing led by Multicoin Capital; the DePIN flight tracking network Wingbits protocol completed a $3.5 million seed round financing led by Borderless Capital and Tribe Capital; the Solana-based DePIN project Andrena completed $18 million in financing led by Dragonfly; the Base-based DePIN project Daylight secured $9 million in Series A financing led by A16z Crypto; DePIN network developer Verida completed a $5 million seed round financing with participation from Simurg Labs, O-DE Capital Partners, and ChaiTech Ventures; the DePIN Layer 1 protocol Peaq raised $20 million through CoinList; and the DePIN project Blockless completed a total of $8 million in pre-seed and seed rounds, including seed round pre-financing led by NGC Ventures and seed round financing co-led by M31 Capital and Frachtis. The capital market's enthusiasm also confirms the strong development potential and attractiveness of DePIN.
Regarding the rapid development of DePIN, Helium CEO Abhay Kumar pointed out during a Token2049 roundtable discussion that traditional markets using high-precision positioning services have, to some extent, driven the development of DePIN, providing customers with more competitive value propositions, including lower costs, better coverage, and ease of integration, with application scenarios including civil measurement, high-definition mapping, construction, agriculture, and more. The attention of the cryptocurrency market has now expanded from entertainment aspects like trading or storing value to real-world applications, with billions of consumers and millions of businesses relying on mapping services in Helium's case alone. For the cryptocurrency sector to become more important and widespread in the next 5 or 10 years, cryptocurrency products and services must succeed. GEODNET CEO Mike Horton added during the roundtable that a healthy and balanced token economy is a powerful tool for DePIN, which can return the actual use and value of the network to users. As the utility of the network grows, the value of the tokens will also increase.
In a recent report on the DePIN field, rating agency Moody's also pointed out that DePIN can help existing networks expand and innovate. Specifically, existing network operators such as telecom companies and utility companies face growing user demands, necessitating capital-intensive infrastructure development. Utilizing decentralized models can help alleviate some of this pressure while maintaining competitiveness as AI and the Internet of Things (IoT) disrupt traditional business models. By combining established parts of the system backbone with building blocks of distributed ledger technology (DLT), DePIN has the potential to improve network reliability and efficiency while reducing operational costs and optimizing resource and industry collaboration.
However, Moody's also noted that widespread adoption of DePIN faces significant obstacles, including regulatory and interoperability issues, cybersecurity risks, and the enormous investment requirements for infrastructure and skills, as well as various risks from unclear regulations that may hinder its growth.
