DePIN: Decentralized Infrastructure for Energy & Sensing — A Practical Primer for Teams That Need to Ship

Decentralized Physical Infrastructure Networks (DePIN) have emerged as one of the most capital-efficient models for deploying real-world infrastructure at scale. By the end of 2024, the DePIN sector had reached a combined market capitalization exceeding $50 billion across more than 1,500 active projects, with over 13 million devices contributing data and services daily, according to Messari's State of DePIN 2024 report. For sustainability teams, the implications are profound: DePIN offers a framework for deploying energy monitoring, environmental sensing, and grid-edge infrastructure without the capital expenditure burdens that have historically constrained distributed systems. The World Economic Forum projects the sector could reach $3.5 trillion by 2028 as blockchain and AI convergence accelerates real-world deployments.

Why It Matters

Traditional infrastructure deployment follows a centralized capital model: utilities, telecoms, and energy companies raise billions, build assets, and amortize costs over decades. This model struggles with distributed sensing and edge energy systems where individual installations generate marginal value that doesn't justify centralized deployment economics. A single air quality sensor or rooftop solar inverter provides insufficient return to warrant a utility's attention, yet networks of thousands of such devices create substantial aggregate value.

DePIN inverts this economic logic. Instead of centralized entities funding distributed assets, DePIN protocols incentivize individuals and small operators to deploy and maintain infrastructure using their own capital. Contributors earn tokens proportional to their infrastructure's utility—measured in data transmitted, compute cycles provided, energy traded, or geographic coverage achieved. The protocol coordinates contributions without requiring the overhead of centralized management, procurement, or maintenance scheduling.

For energy and sensing applications specifically, this model addresses three persistent market failures. First, it solves the granularity problem: environmental monitoring networks require density that centralized deployment can't economically achieve. The 2024 DePIN deployment data shows 38% of all active projects focused on energy applications, driven by demand for hyperlocal grid monitoring and renewable energy coordination. Second, it addresses the maintenance burden: distributed sensor networks historically fail because maintaining thousands of remote devices exceeds operational budgets. Token incentives align individual operators with network health, creating self-sustaining maintenance economics. Third, it tackles data quality: DePIN protocols cryptographically verify that reported data comes from legitimate devices at claimed locations, addressing the trust deficits that plague crowdsourced environmental data.

The regulatory landscape is evolving rapidly. The EU's Markets in Crypto-Assets (MiCA) framework, effective December 2024, provides clearer guidance for utility tokens used in infrastructure networks. Singapore and the UAE have emerged as deployment hotspots due to favorable regulatory treatment, while U.S. projects navigate more complex jurisdictional requirements around securities classification and energy market participation.

Key Concepts

Token Incentive Design

DePIN protocols use tokens to coordinate behavior across thousands of independent operators. Well-designed tokenomics align individual profit motives with network utility. Helium's model, for example, burns Data Credits (a stablecoin-pegged unit) when users transmit data, creating demand-side token pressure that rewards infrastructure providers. Poorly designed tokenomics create speculative bubbles that collapse when token prices fall, leaving networks without operator incentives.

Critical design parameters include: emission schedules (how tokens are distributed over time), burn mechanisms (how token supply is reduced through usage), and stake-weighted reputation (how operator reliability affects rewards). The 2024 Helium tokenomics unification under HIP 138 allocated 70% of emissions to MOBILE (5G) and 30% to IoT, reflecting actual network usage patterns.

Proof of Physical Work

Unlike proof-of-work or proof-of-stake blockchains that secure abstract ledgers, DePIN protocols require "proof of physical work"—cryptographic verification that real-world infrastructure exists and functions. This might involve GPS signatures proving sensor location, challenge-response protocols verifying device connectivity, or on-chain attestations of data quality from oracle networks.

IoTeX's Quicksilver architecture exemplifies this approach: devices register on-chain identities, submit periodic proofs of operation, and have their data integrity verified before it enters AI training pipelines or energy trading systems. Daily API requests on IoTeX grew 291% month-over-month in late 2024 as verified machine data became increasingly valuable for AI applications.

Commodity Hardware vs. Specialized Equipment

DePIN projects diverge on hardware strategy. Helium initially required purpose-built hotspots costing $400-600, creating deployment friction. Newer protocols like Grass leverage smartphones and commodity routers, achieving 3 million users within a year by eliminating hardware purchase requirements. For energy sensing, this trade-off matters: specialized power monitoring equipment provides higher accuracy but limits network growth; commodity smart plugs scale faster but sacrifice measurement precision.

Borderless Capital's DePIN Fund III, which raised $100 million in September 2024, explicitly prioritizes "commodity hardware models" that minimize barriers to network participation—a signal of where sophisticated investors see the sector heading.

Data Marketplaces and MRV Integration

Measurement, Reporting, and Verification (MRV) protocols increasingly integrate with DePIN networks for environmental data. Decentralized sensor networks can provide the ground-truth data that carbon credit verification, renewable energy certificates, and ESG reporting require. The challenge lies in bridging DePIN data streams with legacy compliance systems—a gap that emerging middleware providers are addressing.

Sector-Specific KPIs

Metric	Energy/Grid	Environmental Sensing	Wireless IoT	Mapping/Geospatial
Device Uptime	>99.5%	>98%	>99%	>95%
Data Freshness	<15 sec	<5 min	<30 sec	<24 hr
Geographic Coverage	Per-substation	<1km grid	>80% pop	>70% roads
Verification Rate	>99.9%	>95%	>99%	>90%
Token Burn Rate	$0.001-0.01/kWh	$0.01-0.10/reading	$0.0001-0.001/msg	$0.001-0.01/km
Operator Churn	<5%/month	<10%/month	<8%/month	<15%/month
First-Year ROI	40-120%	20-80%	30-100%	25-75%

What's Working

Carrier Integration for Wireless Networks

Helium's 2024-2025 trajectory demonstrates that DePIN can achieve enterprise adoption. T-Mobile, AT&T, and Telefónica's Movistar now offload traffic to Helium's decentralized network, with data offload volumes growing 555% quarter-over-quarter in Q4 2024. By Q3 2025, the network served 541,000 mobile subscribers and processed 5,451 TB of data. This isn't experimental anymore—it's production infrastructure serving major carriers.

The economics work because Helium provides coverage in areas where deploying owned infrastructure isn't cost-effective for carriers, while token incentives maintain network quality without carrier operational overhead. Helium's annualized revenue reached approximately $18.3 million in 2025, proving sustainable unit economics at scale.

Real-Time Geospatial Data

GEODNET achieved $3 million in annualized network revenue by January 2025, growing 518% year-over-year by providing RTK GPS positioning data from decentralized reference stations. This data serves precision agriculture, autonomous vehicles, and construction applications that require centimeter-level accuracy. The network demonstrates that specialized, high-value data streams can support robust token economies even without massive device counts.

AI Training Data Pipelines

The convergence of DePIN and AI created significant value in 2024-2025. Projects like io.net and Render provide decentralized GPU compute for AI training, while sensor networks supply the real-world data that models require. IoTeX's Quicksilver platform specifically targets "verified machine data for AI agents"—a recognition that AI systems need trusted data provenance. Aethir, Virtuals Protocol, and io.net emerged as the top three revenue-generating AI-DePIN projects in 2024.

What's Not Working

Speculative Token Dynamics

Many DePIN tokens have fallen 94-99% from all-time highs, devastating operator incentives. When token prices collapse, the dollar-denominated return for operating infrastructure plummets, leading to device shutdowns and network degradation. Projects without sustainable demand-side tokenomics—where actual users burn tokens for services—remain vulnerable to this dynamic. The 2024 Messari report identified "limited customer adoption" as the primary challenge across the sector.

Regulatory Uncertainty in Energy Markets

Energy-specific DePIN projects face complex regulatory environments. Peer-to-peer energy trading, virtual power plants, and distributed grid services require regulatory approval that varies dramatically by jurisdiction. Projects like PowerLedger have achieved traction in markets with supportive regulation (Australia, Japan) but struggle to expand into jurisdictions where utility monopolies and grid codes create barriers. The United States remains particularly fragmented, with requirements varying by state and utility territory.

Hardware Maintenance at Scale

Despite incentive alignment, maintaining distributed hardware remains challenging. Device failures, firmware updates, connectivity issues, and physical damage create operational burdens that token rewards may not adequately compensate. Helium's IoT network experienced churn rates of 20% in early deployments before stabilizing, and many environmental sensing networks report >10% monthly operator turnover. Sustainable DePIN requires not just deployment incentives but ongoing maintenance economics.

Data Quality Verification

Cryptographic proofs verify that data comes from registered devices, but they cannot inherently verify that devices are properly calibrated or that environmental conditions haven't compromised sensor accuracy. A temperature sensor reporting from the correct GPS coordinates may still provide bad data if positioned in direct sunlight. DePIN networks are developing reputation systems and cross-validation mechanisms, but comprehensive data quality assurance remains an unsolved challenge.

Key Players

Established Leaders

• Helium (HNT) — The largest DePIN by network scale, providing decentralized IoT and 5G connectivity. Market cap exceeded $1 billion in 2024-2025, with carrier partnerships validating the model.
• Filecoin (FIL) — Decentralized storage network with $1+ billion market cap and backing from Protocol Labs. Powers a significant portion of Web3 storage infrastructure.
• Render Network (RENDER) — Decentralized GPU rendering with $1-3 billion market cap. Migrated to Solana in 2024 and established partnerships with Apple for spatial computing applications.
• PowerLedger (POWR) — Pioneer in peer-to-peer energy trading with active deployments in Australia, Japan, and Southeast Asia.
• IoTeX (IOTX) — Layer-1 blockchain purpose-built for IoT with native DePIN infrastructure modules and the Quicksilver AI data verification platform.

Emerging Startups

• GEODNET — High-precision RTK GPS positioning network achieving $3 million annualized revenue. Acquired strategically by Multicoin Capital in February 2025.
• Glow — Solar energy tokenization platform enabling fractional ownership and transparent production tracking for distributed solar installations.
• Grass Network — Bandwidth-sharing network that grew from 200,000 to 3 million users in one year by leveraging commodity hardware (smartphones, routers).
• Hivemapper (HONEY) — Decentralized mapping network using dashcam-equipped vehicles to build continuously updated street-level maps.
• Ambios — Environmental monitoring network deploying air quality and climate sensors with blockchain-verified data streams.

Key Investors & Funders

• Multicoin Capital — Thesis-driven investor with major positions in Helium, GEODNET, and Render. Focus on token economics and long-term network sustainability.
• Borderless Capital — DePIN specialist that launched $100 million DePIN Fund III in September 2024. Prioritizes commodity hardware models and has backed 17 ventures worth $8.9 billion collectively.
• Escape Velocity — Closed $62 million Fund II in December 2024, backed by Marc Andreessen and Ribbit Capital. Focuses specifically on DePIN infrastructure.
• a16z Crypto (Andreessen Horowitz) — Major institutional investor backing infrastructure and gaming Web3 projects, with exposure to DePIN through multiple portfolio companies.
• Hack VC — Deep focus on AI-DePIN convergence, leading io.net's $30 million Series A at $1 billion valuation.

Examples

Helium Mobile: Decentralized Carrier Infrastructure

Helium's mobile network demonstrates DePIN at carrier scale. By Q3 2025, the network operated 31,600+ 5G hotspots deployed by individual operators earning MOBILE tokens. T-Mobile and AT&T offload subscriber traffic to these hotspots in coverage-gap areas, paying in Data Credits that are burned against token supply. The February 2025 launch of a free mobile plan (3GB/month with location data sharing) attracted consumer attention while generating network usage data. Harvard Business School added Helium as a case study in November 2024, signaling academic recognition of the model's significance.

GEODNET: Precision Positioning Network

GEODNET built a network of 10,000+ RTK reference stations providing centimeter-accurate GPS positioning. Agricultural equipment manufacturers, drone operators, and construction firms purchase positioning data, with revenue reaching $3 million annualized by January 2025—a 518% year-over-year increase. Station operators earn tokens proportional to data usage, creating aligned incentives between infrastructure providers and data consumers. Multicoin Capital's strategic acquisition in February 2025 validated the specialized data marketplace model.

PowerLedger: Peer-to-Peer Energy Trading

PowerLedger operates energy trading platforms in Australia, Japan, India, and Southeast Asia, enabling solar producers to sell excess generation directly to neighbors. The platform processed millions of peer-to-peer energy transactions, demonstrating that DePIN principles can apply to regulated utility markets with appropriate compliance frameworks. Their xGrid product integrates with existing utility billing systems, reducing deployment friction in markets with complex energy regulations. PowerLedger's success in navigating diverse regulatory environments provides a template for energy-focused DePIN projects.

Action Checklist

• Evaluate tokenomics sustainability by modeling demand-side burn mechanics under various token price scenarios—projects relying purely on token appreciation for operator returns will fail during bear markets
• Assess regulatory requirements for your target deployment geography; energy applications face particularly complex requirements around grid interconnection, utility tariffs, and virtual power plant participation
• Design for commodity hardware where possible to maximize network growth velocity; specialized equipment creates deployment friction that limits scale
• Implement robust proof-of-physical-work mechanisms that verify device location, operation, and data quality—reputation systems without cryptographic verification invite gaming
• Build data quality validation beyond device authentication; cross-validation with oracle networks, statistical anomaly detection, and periodic calibration verification
• Plan for maintenance economics explicitly; token rewards must cover not just initial deployment but ongoing device upkeep, firmware updates, and connectivity costs
• Integrate with existing MRV and compliance frameworks if targeting enterprise or regulatory use cases; blockchain verification alone doesn't satisfy legacy audit requirements
• Model operator unit economics at realistic token prices (use 70% below current prices as stress test) to ensure network sustainability through market cycles

FAQ

Q: How do DePIN projects handle the "cold start" problem where networks need scale to be useful but can't attract operators without utility?

A: Successful projects use treasury-funded incentive programs during the bootstrapping phase, subsidizing early operators until network effects create organic demand. Helium's early growth was fueled by elevated token emissions to hotspot deployers before carrier partnerships generated real usage. The key is designing a credible path from subsidy to sustainability—projects that can't articulate when and how subsidies end typically fail when treasuries deplete. Borderless Capital specifically evaluates "commodity hardware models" that reduce bootstrapping capital requirements.

Q: What distinguishes DePIN from traditional IoT or sensor networks with cloud backends?

A: Three fundamental differences. First, capital formation: DePIN distributes deployment costs across individual operators rather than concentrating them in a single entity. Second, incentive alignment: token rewards create ongoing motivation for operators to maintain devices, while traditional deployments rely on organizational mandate. Third, data ownership: DePIN architectures typically give operators or the network collective control over data, versus centralized platforms that capture and monetize sensor data unilaterally. For sustainability applications, this means communities can own their environmental monitoring infrastructure rather than depending on corporate or government programs that may change priorities.

Q: Are DePIN tokens securities? How should teams navigate regulatory classification?

A: Classification depends on jurisdiction and token design. The SEC has not provided blanket guidance on DePIN tokens, but generally examines whether tokens represent investment contracts (the Howey test). Tokens with genuine utility—where holders use them to access network services rather than purely as investments—have stronger arguments for non-security classification. The EU's MiCA framework, effective December 2024, provides clearer utility token treatment. Most projects structure tokens through SAFT (Simple Agreement for Future Tokens) frameworks and engage securities counsel before token launches. Teams should budget $50-200K for proper regulatory analysis before token design decisions.

Q: How do energy-focused DePIN projects integrate with regulated utility markets?

A: Integration typically occurs through three models. First, "behind the meter" applications that don't require utility interaction—home energy management, EV charging optimization, and demand response that occurs within customer premises. Second, wholesale market participation through aggregators who hold the necessary utility registrations and use DePIN data/devices as backend infrastructure. Third, pilot programs with forward-thinking utilities who partner with DePIN projects for grid-edge services. PowerLedger's success came from pursuing all three approaches simultaneously, building regulatory expertise as a core competency rather than treating compliance as an obstacle.

Q: What's the realistic timeline for a DePIN project to reach sustainable unit economics?

A: Historical data suggests 2-4 years from mainnet launch to sustainable economics for successful projects. Helium launched in 2019 and achieved carrier partnerships generating real revenue by 2024. GEODNET launched in 2022 and reached $3 million ARR by early 2025. Projects should plan for 18-24 months of subsidy-dependent operation before organic demand covers operator costs. Token treasury size and burn rate determine runway—teams should model treasury depletion under bear market scenarios and ensure 36+ months of subsidy capacity.

Sources

• Messari, "State of DePIN 2024," December 2024
• Messari, "State of Helium Q3 2025," October 2025
• The Block Pro Research, "DePIN Investment Analysis: January 2024 - July 2025"
• Borderless Capital, "DePIN Fund III Announcement," September 2024
• Grayscale Research, "The Real World: How DePIN Bridges Crypto Back to Physical Systems," 2024
• World Economic Forum, "Blockchain and Infrastructure Convergence Projections," 2024
• Intel Market Research, "Decentralized Physical Infrastructure Networks Solution Market Outlook 2025-2032"
• CoinGecko, "DePIN Market Capitalization and Trading Analysis," November 2024
• J.P. Morgan Kinexys, "DePINs & Pioneering Next-Gen Blockchain Infrastructure," 2024
• IoTeX Developer Documentation, "Quicksilver Architecture Overview," 2024