Huobi Research Institute: The current situation and development forecast of the DePIN track, the medium- and long-term potential profit expectation of entering the DePIN market is more than 400 times

Introduction: DePIN – Current Status and Outlook

The Decentralized Physical Infrastructure Network (DePIN) is reshaping the blockchain landscape through its innovative use of existing infrastructure and data-centric business models. DePIN goes beyond traditional IoT frameworks and stands out for its decentralized efficiency and cost-effectiveness.

This report explores the rapidly growing DePIN landscape, particularly within the Solana network, which is known for its solid infrastructure and innovative applications. The DePIN project prioritizes actual profitability over speculative finances and has played a key role in integrating technologies such as privacy-enhancing, zero-knowledge proofs, and artificial intelligence. DePIN is strategically composable with other ecosystems and is positioned to transform economic systems through data integrity and scalable solutions.

As the leading platform for DePIN, Solana embodies the integration of high-performance blockchain technology with physical networks, promises significant economic returns, and pioneers new ways to merge technology with real-world applications.

This article was written by the research team at HTX Ventures. HTX Ventures is the global investment arm of Huobi HTX, integrating investment, incubation, and research to identify the best and most promising teams in the world. At present, HTX Ventures has supported more than 200 projects across multiple blockchain tracks, and some of the high-quality projects have been listed on Huobi HTX trading.

conclusion

Although DePIN is called a decentralized physical infrastructure network, the core business growth logic is not the hardware itself, but how to make more efficient use of data, whether it is data storage, data transmission, data sharing, or data use.
DePIN does not need to benchmark against traditional IOT, and there is no need to divide Web2 or Web3 when thinking, as long as it can use data more efficiently and distribute it more effectively, it is a good thing.
The development of DePIN will be combined with blockchain to solve the problem of data trustworthiness, and will unfold large-scale protocols along the Internet of Things, creating an infinite web between people and people, people and machines, and machines and machines.
When looking at DePIN projects, it is more important to abandon speculative or financial attributes, which are more suitable for defi, meme, Brc20, etc. Looking at DePIN should focus on the true profitability of the project itself.
In the short term, the DePIN track is worth paying attention to the combinability with other ecosystems, including DePIN x Privacy, DePIN x Gaming, DePIN x ZK, DePIN x AI, and in the long run, Depin's future blueprint includes gig economy, sharing economy, and trusted data.
The Solana network has become the blockchain of choice for DePIN project deployments, with Solana DePIN representing over $10 billion in FDV and $4 billion in market cap.
Solana's advantages in DePIN are:
Performance advantages are superimposed on technology upgrades
Robust Token standards and ecosystem
Cost advantage
Centralized mobility, strong ecological composability, and unified community
The developer community is active, with innovative projects and new concepts emerging all the time

What is DePIN

In the research report "The DePIN Sector Map" released in early 2023, Messari officially proposed the concept of DePIN (Decentralized Physical Infrastructure Networks), which is defined as "the deployment of real-world physical infrastructure and hardware networks using cryptoeconomic protocols". In a nutshell, DePIN enables all participants to work together to build a physical infrastructure network through blockchain-based token incentives.

The evolution of the noun aside, the project of "deploying real-world physical infrastructure and hardware networks using cryptoeconomic protocols" has actually been around for a long time. For example, Helium, a decentralized network, was founded in 2013, and Storj, a decentralized storage, was founded in 2014, and these teams have been spontaneously exploring how to build physical infrastructure networks in a decentralized way as early as in the fields of communication and storage. Subsequently, the Internet, artificial intelligence, energy, data collection and other fields have gradually joined, although the subdivisions are different, but the core logic is the same, and finally formed today's prosperous DePIN track.

The overall status of the DePIN track

DePIN 板块梳理

According to Messari and Depin.Ninjia, the DePIN ecosystem has grown to more than 650 projects with a market capitalization of $35B in 2023, covering six sub-sectors: computing (250), artificial intelligence (200), wireless (100), sensors (50), energy (50), and services (25). Messari predicts the total addressable market size of the DePIN segment to be around $2.2 trillion and could reach $3.5 trillion by 2028.

According to CMC data, there are a total of 60 issued DePIN projects with a market capitalization of $1.33 billion. The top 100 DePIN projects by market capitalization are FIL, RNDR, HNT, THETA, BTT, AKT, and AR. The top projects in other tracks include IOTX, ANKR, and AI-related projects such as TAO. Judging from the current top 10 projects by market capitalization in the DePIN space, most of them belong to the AI, Storage, and Computing fields. DePIN currently accounts for a very small share of the entire Crypto market, lower than Meme, Defi, NFT, and other sectors. If you compare the traditional Internet of Things industry, there are 21 projects with a market value of more than 100 million, and only 4 projects with a market value of more than 1 billion.

If we extrapolate from this data, then in the short to medium term, the potential profit expectation of entering DePIN is around 243x, and the profit expectation in the medium to long term is more than 400x.

Dismantling of the Depin project sector

The reference here is the dismantling method of IOTEX, which is divided into two parts: software and hardware.

The hardware part has two major sections, sensors and wireless networks, and the software part has four sections: planning, storage, network distribution, and artificial intelligence.

Depin track branch diagram

Although the DePIN project is called a decentralized physical infrastructure network, all the core business logic revolves around how to extract value from data.

Sensors – responsible for data collection
Wireless network and network distribution - responsible for data transmission
Calculation section - responsible for the calculation of data
Storage section - responsible for the storage of data
Artificial intelligence - responsible for data application,

Therefore, the DePIN project itself starts with hardware, but the real development lies in how to use data well, which is similar to the development model of the traditional Internet economy.

When evaluating the prospects of a Depin project, think in terms of data, and whoever uses the data well and who has the data is a good project.

It is necessary to put aside the speculative part of Crypto and return to the pragmatic value part.

DePIN

As mentioned above, the DePIN track has always been laid out by investment institutions and entrepreneurs, but the market environment at the beginning of 2023 is not suitable, and the new paradigm on DePIN is still being explored, so new DePIN projects are rarely launched. By the end of 2023, whether it is the improvement of the market environment or the exploration and accumulation of entrepreneurs, many projects have gradually taken shape from the initial concept, so they began to be launched into the market one after another, and then the action was captured by the market.

For example, VCs such as Multicoin, Borderless, A16Z, HTX Ventures and so on have a lot of layouts in DePIN, and the projects they invest in are all projects with very strong application and very weak speculative attributes.

institution

Number of items

project

Borderless

hivemapper,Xnet, Render, Helium, Arweave, filecoin, Dimo, Dabba, Planetwatch, CUDO, WAYRU, CLIMATE TRADE, Daylight

Multicoin

Fluence, BrainTrust, Dabba, Arweave, dClimate, Blackbird, worldcoin, livepeer, Render, helium, Io.net, hivemapper

Coinfund

Numeraire, upshot, Giza, worldcoin, dClimate, GIANT, Livepeer, Dimo,Gensyn

A16Z

Arweave, Blackbird, worldcoin, filecoin, Helium,Braintrust

DCG

Bittensor, Livepeer,Fleek, FIlecoin, worldcoin, Meson Network

Polychain Capital

Filecoin, Fleek, Really, upshot, Bittensor

Vary

Blackbird, Braintrust, Dimo, Worldcoin

PlaceHolder

Foam, Filecoin, weatherXM, Numeraire, Arweave

Lattice

Arweave, Dimo, Filecoin, Nosh Delivery,

HTX Ventures

CESS, EverPay, Pyth, Spacemesh

The following chart complements the financing of the top DePIN project.

Top DePINs by Capital Raised

Solana DePIN生态调研

The Solana network has become the blockchain of choice for DePIN project deployments

Solana DePIN represents more than $10 billion in FDV and $4 billion in market capitalization.

据CMC，目前市值排名前500的Solana DePIN 项目有Render Network（RNDR）、Helium Network（HNT）、Helium Mobile（MOBILE）；其余DePIN 有Helium IOT（IOT）、Hivemapper（HONEY）等。近期这赛道较高热度的项目有Solana相关的HNT系列如MOBILE和IOT，加上可能即将发币的getgrass，带宽网络市场项目。

The DePIN track and the Solana network are the result of mutual selection.

The irreplaceability of Mass Adaption, especially for DePIN and Web2 applications. Solana has successfully supported the needs of STEPN, and this is also a project where Web3 really comes out of the circle.

Solana's cNFTs provide more cost-effective authorization certificates for nodes in DePIN/PoPW, which is a common practice.

The migration of the RNDR and Helium projects has given the project itself greater capabilities. For example, this shift brings new capabilities to Render, including real-time streaming, dynamic NFTs, and state compression, which significantly improves the performance and scalability of the network, while opening up richer and more diverse application scenarios for users.

DePIN is different from high-value DeFi applications, closer to traditional edge computing and other IoT (Internet of Things) concepts, more emphasis on stability and low price, Solana naturally has an advantage in synchronization speed, taking the current hottest Helium as an example, the number of IoT reaches more than 300,000, and there are more than 3,000 5G devices, and only Solana can meet the deployment of a large number of hardware.

DePIN brings high value to the Solana ecosystem

Projects like Helium have significantly increased the number of active wallets. Helium alone reports that more than 60,000 active wallets participate in activities such as claiming rewards, staking, delegating or burning tokens each month, while more than 30,000 other wallets use other SPL programs, highlighting Helium's impact on the Solana ecosystem.

From a regulatory perspective, DePIN demonstrates Solana's practical application in the eyes of regulators and policymakers, enhancing its legitimacy and brand recognition.

The Solana network is even more advantageous

Performance advantages are superimposed on technology upgrades

Including high throughput, Solana is officially claimed to be able to process more than 65,000 transactions per second, with 2,500-3,000 daily operations. Other features include fast transaction confirmation, scalability, and block size. After the future Firedancer upgrade, the theoretical TPS can reach 1 million+, and the daily TPS is estimated to reach 100,000+, which is also the most important factor for Visa and DePIN to choose Solana.

Robust Token standards and ecosystem

A vibrant ecosystem with well-tested DEXs and established standards such as cNFTs (compressed NFTs), pNFTs (programmable NFTs), Token Extensions, and more provide DePIN projects with the essential components to develop and launch their on-chain products.

Cost advantage

Even after the upgrade in Cancun, Solana is still a Layer 1 with lower gas fees. In the head L2, the DA layer has been switched to the Ethereum mainnet blob, including ZkSync and Starknet of the ZK Rollup system, and Optimism and Base of the Optimistic Rollup system. The gas fees of the four L2 companies dropped by 1 order of magnitude, but they did not switch to Celestia, and the fees did not come to a minimum.

Centralized mobility, strong ecological composability, and unified community

Ethereum and its Layer 2 are heavily ideological, competing with each other for liquidity. This is particularly prominent in this round of small bull market, with little technical and ecological distinction, and the wealth creation effect is not significant. Universal L2 is no match for competing chains like Solana.

Recently, the Solana defi ecosystem has also exploded, and TVL has also reached $3.3 billion. This also means that there will be stronger income products and speculative products on Solana, and the combination of RWA, AI, and DePIN projects will make defi products more composable.

The developer community is active, with innovative projects and new concepts emerging all the time

Through hackathons and various incentives, Solana fosters an active community of developers, which fuels the growth of its ecosystem. Follow-up appeared Magic Eden, Stepn, jito and other Top projects. Even during the bear market, Solana has maintained its developer ecosystem and community activities, and through continuous incentives and hackathons, Solana continues to improve its infrastructure and stimulate the development of more innovative applications to further promote the prosperity of the ecosystem.

The wealth creation effect is the best marketing tool

Saga's huge airdrop leads to a new way to play with crypto phones, driving the unification of the Solana ecosystem, including Solend, Helius, Chads, and Solcial, which has announced airdrops, benefits, and giveaways for Saga 2 owners. The meme coin in the recent bull market has $BOME also achieved the miracle of Binance in 3 days.

Ecological development

Solana DePIN 项目梳理如下表所示:

Depin classification

The name of the project

wireless network

Helium、WIFI Dabba

Storage networking

Shdw Drive、Aleph

sensor

Hivemapper、Onocoy、WiHi

Render、Io.net、Nosana、Grass、Synesis One、UpRock、Shaga、DAIN

serve

Teleport、Proto

infrastructure

Sphere、Solsplits、Token标准（压缩型NFT、SPL token）

Solana DePIN 生态小结:

龙头项目：RNDR、Helium

RNDR, a decentralized rendering platform.

Helium Network, the wireless network project. Since its development in 2014, it has completed a total of more than $350M in financing, with investors including a16z, Deutsche Telekom, Google, Tiger Global and other well-known funds inside and outside the circle. Helium migrated to the Solana blockchain in April of this year. HNT is currently ranked 64th in the CMC.

Tier 2 projects: Helium series (MOBILE and IOT), io.net, Nosana

MOBILE and IOT are projects within the Helium ecosystem.
IOT: This is the protocol token of the Helium IoT network, mined by LoRaWAN Hotspots through data transfer yield and proof of coverage.
MOBILE: This is the protocol token of the Helium 5G network and is awarded to those who provide 5G wireless coverage and Helium network validation. MOBILE IS CURRENTLY RANKED 166 IN CMC.

io.net, it positions itself as a "GPU aggregator" by integrating GPU networks from data centers, crypto miners, and established projects like Render to harness computing power for machine learning applications. It has not yet been coined, and currently has 426k Twitter followers. The Series A round reached a total of $30 million, led by Hack VC, with participation from Multicoin Capital, 6th Man Ventures, M13, Delphi Digital, Solana Labs, Aptos Labs, and others. At present, the number of GUP miners has reached more than 50,000.

Nosana, a marketplace that connects user-provided GPU networks with consumers aiming to develop artificial intelligence products.

潜力项目：ALEPH、HONEY、Shadow

ALEPH, STORAGE SOLUTIONS, CROSS-CHAIN DATABASES.

Launched in November 2022, Hivemapper (HONEY) is a decentralized global mapping network that rewards contributors who collect large volumes of 4K street imagery using dashcams through a Drive-to-Earn model. In April '22, it closed an $18 million funding round led by Multicoin Capital, with participation from industry figures such as the founder of Solana, former Apple Maps executives, and the CEO of Helium. The current CMC ranking is 513.

Shadow, a competitor to Filecoin, Shdw Drive leverages high-performance traditional and mobile computing to reduce the cost of enterprise-grade data center storage – a technology called "DAGGER."

Prediction for the future development of DePIN

The DePIN track has high infrastructure requirements and needs to meet high throughput requirements, so DePIN projects will choose to build on Layer 1 with high performance, or even on Layer 2 or Layer 3.
More project possibilities, such as clean energy infrastructure and virtual power plants: projects Daylight and Etheos
DePIN projects are transitioning to larger platforms, such as Helium and Render, so that smaller DePIN projects can leverage them for development
DePIN private chains, we've seen two EVM/substrate chains dedicated to DePIN, such as Peaq and IoTex. In addition, one of the blue-chip DePIN projects, Dimo, is also using Polygon CDK to build their chains, showing the need for appchains.
Combinability of DePIN with other ecological tracks. This is especially evident on Solana, such as the wealth-creating effect of Bonk's airdrop on Saga. In the future, there will be more combinations of Depin and DeFi to increase returns and speculation, and the combination of Depin and RWA will provide solutions for project financing, or provide data in the real world.

For example,

DePIN x ZK,

With the continuous development of technology, technologies such as ZK TLS can effectively prove the authenticity of Web2 or Web3 data, and open up the channel from Web2 data to Web3.

例如 Space and Time 这个项目，

Space and Time is a verifiable computing layer that scales zero-knowledge proofs on decentralized data warehouses, providing trustless data processing for smart contracts, LLMs, and enterprises. Space and Time connects indexed blockchain data from on-chain with off-chain datasets, and Proof of SQL ensures tamper-proof large-scale computation and proves that query results have not been manipulated.

Proof of SQL is a new ZK-proof developed by Space and Time that allows data warehouses to generate SNARK cryptographic proofs of SQL query execution, proving that query computations are done accurately and that both the query and the data are verifiably tampered with.

Projects allow developers to connect indexed on-chain and off-chain data, use SQL to transform data to execute low-latency cached queries and large analytics jobs, transform and shape data to schemas specific to your business, publish queries to APIs and build dashboards, and zero-knowledge technology guarantees trustless delivery of tamper-proof query results to smart contracts or directly on-chain.

Space and Time has indexed Ethereum, Polygon, Sui, Sei, and Avalanche, and is supporting more chains all the time, as well as being connected to Chainlink.

DePIN x AI,

The development of decentralized physical infrastructure networks could fundamentally change the way data is used, such as decentralized machine learning, Bittensor is an example.

Bittensor is an open-source protocol that powers a decentralized, blockchain-based machine learning network. Machine learning models are trained collaboratively in TAO and are rewarded based on the value of the information they provide to the collective. TAO also allows external access, allowing users to extract information from the network while adapting network activity to their own needs.

DePIN x Privacy，

It has also been emphasized that although DePIN is a decentralized physical network, the core revolves around the use of data. In a large-scale decentralized network, protecting the privacy of data will inevitably become a very important issue. Therefore, if DePIN is destined to develop, then privacy protection is absolutely unavoidable, so we should pay attention to the direction of the combination of DePIN and privacy.

DePIN x Gaming，

The combination of DePIN and gaming can be understood in several ways,

Large-scale decentralized hardware networks have the potential to bring a better experience to gaming to some extent
The concept of realistic wearables + games + metaverse has the potential to be hot again
Through the DePIN hardware infrastructure, it is possible to change the incentive mechanism of the game itself and the way the game is experienced

Resources

https://www.panewslab.com/zh_hk/articledetails/8vy12wz3Ft.html
https://mp.weixin.qq.com/s/DE28WI5hE7OE5s2D-TFLxw
https://foresightnews.pro/article/detail/53218
https://depin.ninja/leader-board
https://depinhub.io/rankings/investors

关于HTX Ventures

This article was written by the research team at HTX Ventures. HTX Ventures is the global investment arm of Huobi HTX, integrating investment, incubation, and research to identify the best and most promising teams in the world. As a pioneer in the blockchain industry for a decade, HTX Ventures promotes the development of cutting-edge technologies and emerging business models in the industry, providing comprehensive support for collaborative projects, including financing, resources, and strategic consulting to build a long-term blockchain ecosystem. At present, HTX Ventures has supported more than 200 projects across multiple blockchain tracks, and some of the high-quality projects have been listed on Huobi HTX trading. At the same time, HTX Ventures is one of the most active fund of fund (FOF) investors, working with the world's top blockchain funds such as Bankless, IVC, Shima, and Animoca to build a blockchain ecosystem.

【英文研报】HTX Research：DePIN: Current State and Prospects

Introduction: DePIN - Current State and Prospects

Singapore / April 30, 2024 – Decentralized Physical Infrastructure Networks (DePIN) are reshaping the blockchain landscape with their innovative use of existing infrastructure and data-centric business models. Moving beyond traditional IoT frameworks, DePIN stands out for its decentralized efficiency and cost-effectiveness.

This report explores the burgeoning DePIN sector, particularly within the Solana network, noted for its robust infrastructure and innovative applications. DePIN projects prioritize tangible profitability over speculative financials and are pivotal in integrating technologies like privacy enhancements, zero-knowledge proofs, and artificial intelligence. The strategic composability with other ecosystems positions DePIN to transform economic systems through data integrity and scalable solutions.

As the leading platform for DePIN, Solana exemplifies the integration of high-performance blockchain technology with physical networks, promising significant economic returns and pioneering new ways to merge technology with practical applications.

HTX Ventures, the global investment arm of HTX, leverages an integrated approach that combines investment, incubation, and research to identify the most exceptional and promising teams around the world. To date, HTX Ventures has supported over 200 projects spanning multiple blockchain tracks, with some high-quality projects already listed on HTX for trading.

Key Takeaways

· While DePIN projects are decentralized physical infrastructure networks, their core business models focus on effectively utilizing data, whether for storage, transmission, sharing, or use.

· There is no need to compare DePINs to traditional IOT projects or categorize them as Web2 or Web3. What matters most is their ability to utilize data efficiently and distribute economic resources effectively.

· DePIN's development will combine blockchain technology to enhance data credibility and establish extensive protocols along with the Internet of Things, creating an infinite network connecting people to people, people to machines, and machines to machines.

· When assessing DePIN projects, it's crucial to disregard speculative or financial aspects, which are more applicable to sectors like DeFi, meme, and BRC20. Instead, the focus should be on a project's profit potential.

· In the near term, attention should be paid to the composability of DePIN with other ecosystems, such as DePIN x Privacy, DePIN x Gaming, DePIN x ZK, and DePIN x AI. In the long term, DePIN's future involves gig economy, sharing economy, and data credibility.

· The Solana network has emerged as the preferred blockchain for deploying DePIN projects. Solana DePIN projects boast an FDV exceeding $10 billion and a market capitalization of over $4 billion.

· Advantages of Solana for DePIN include:

o Superior performance and technological advancements

o Robust token standards and a thriving ecosystem

o Low cost

o Concentrated liquidity, composable ecosystem, and unified community

o An active developer community driving innovative projects and new concepts

What Is DePIN?

DePIN, short for Decentralized Physical Infrastructure Networks, was first introduced in early 2023 in Messari's research report titled "The DePIN Sector Map." It was defined as leveraging cryptographic economic protocols for the deployment of real-world physical infrastructure and hardware networks. Essentially, DePIN employs a blockchain-driven, token-incentivized approach to encourage collective efforts in building physical infrastructure networks.

While the term "DePIN" is new, projects deploying real-world physical infrastructure and hardware networks via cryptographic economic protocols have been in existence for some time. Notable examples include Helium, a decentralized network created in 2013, and Storj, a decentralized storage solution launched in 2014. These projects explored decentralized ways to build physical infrastructure networks in fields such as communications and storage. Subsequently, sectors like the internet, AI, energy, and data collection followed suit. Despite their differences, these projects share a common underlying mechanism, contributing to the flourishing landscape of DePIN today.

Current State of DePIN

Overview

As of 2023, data from Messari and DePIN.Ninjia revealed that the DePIN ecosystem comprised 650 projects with a total market capitalization of $35 billion. These projects span various sectors, with 250 in computing, 200 in AI, 100 in wireless, 50 in sensors, 50 in energy, and 25 in services. The DePIN landscape's potential market size is estimated at approximately $2.2 trillion, projected to reach $3.5 trillion by 2028, according to Messari.

According to CoinMarketCap (CMC) data, 60 DePIN projects have issued tokens, collectively amounting to a market cap of $1.33 billion. Among the top 100 projects by market cap are FIL, RNDR, HNT, THETA, BTT, AKT, and AR. Other notable examples include IOTX and ANKR, along with AI-related projects like TAO. The majority of the top 10 projects focus on AI, storage, and computing. However, DePIN currently occupies a small share of the crypto market, falling behind sectors like Meme, DeFi, and NFTs. Compared to the traditional IoT sector, DePIN has only 21 projects with a market cap exceeding $100 million and only 4 surpassing $1 billion.

Based on these figures, the potential profitability of the DePIN sector is expected to be 243 times in the near-to-medium term and over 400 times in the mid-to-long term.

Breakdown of DePINs

Similar to IoTeX, DePINs can be categorized into software and hardware projects.

Hardware encompasses sensors and wireless networks, while software includes computing, storage, network distribution, and AI.

DePIN Categorization

Although DePIN projects are decentralized physical infrastructure networks, their core business models focus on extracting value from data.

· Sensors are responsible for data collection.

· Wireless networks and network distribution are responsible for data transmission.

· Computing is responsible for data processing.

· Storage is responsible for data storage.

· AI is responsible for data application.

While hardware serves as the foundation, the evolution of DePIN projects lies in their ability to effectively utilize data. This echoes the growth model seen in traditional internet economies.

Therefore, evaluating a DePIN project's potential requires a data-focused approach. Projects that utilize and control data well are more likely to succeed.

It's essential to remove the speculative elements of crypto and focus on tangible value.

DePIN Investors

As mentioned earlier, investment institutions and entrepreneurs have shown significant interest in the DePIN sector. The limited number of new DePINs in early 2023 was primarily due to unfavorable market conditions and the sector's nascent stage. By the end of 2023, improving market conditions and accumulated experience led to the emergence of tangible prototypes, prompting their introduction to the market. These developments garnered attention, establishing DePINs as a noteworthy presence in a landscape hungry for technological innovation.

Venture capital firms like Multicoin, Borderless, A16Z, and HTX Ventures have made substantial investments in the DePIN sector, focusing on projects with robust utility and minimal speculative elements. That said, DePINs still represent a small portion of their portfolios.

Institution

Number of Projects

Projects

Borderless

Hivemapper, Xnet, Render, Helium, Arweave, Filecoin, Dimo, Dabba, Planetwatch, CUDO, WAYRU, CLIMATE TRADE, Daylight

Multicoin

Fluence, BrainTrust, Dabba, Arweave, dClimate, Blackbird, Worldcoin, Livepeer, Render, Helium, io.net, Hivemapper

Coinfund

Numeraire, Upshot, Giza, Worldcoin, dClimate, GIANT, Livepeer, Dimo, Gensyn

A16Z

Arweave, Blackbird, worldcoin, Filecoin, Helium, Braintrust

DCG

Bittensor, Livepeer, Fleek, Filecoin, Worldcoin, Meson Network

Polychain Capital

Filecoin, Fleek, Really, Upshot, Bittensor

Vary

Blackbird, Braintrust, Dimo, Worldcoin

PlaceHolder

Foam, Filecoin, WeatherXM, Numeraire, Arweave

Lattice

Arweave, Dimo, Filecoin, Nosh Delivery

HTX Ventures

CESS, EverPay, Pyth, Spacemesh

The following image shows the capital raised by top DePIN projects.

Top DePINs by Capital Raised

Solana DePIN Projects

Solana: The Preferred Choice for DePIN Project Deployment

· Solana DePIN projects boast a Fully Diluted Valuation (FDV) exceeding $10 billion and a market capitalization of over $4 billion.

According to CMC data, the top 500 Solana DePIN projects by market capitalization feature Render Network (RNDR), Helium Network (HNT), and Helium Mobile (MOBILE). Other notable DePINs include Helium IOT (IOT) and Hivemapper (HONEY). Recent trending projects include MOBILE and IOT, as well as getgrass, a bandwidth network market project set to issue tokens.

· DePIN and Solana: A Synergistic Partnership

Solana's recovery is attributed in part to the irreplaceability of Mass Adaption, especially DePIN and Web2 applications. Solana successfully met the needs of STEPN, a project that made Web3 stand out.

Solana's cNFTs provide DePIN/PoPW nodes with more cost-effective authorization certificates, which is a common practice.

The migration of RNDR and Helium to Solana has empowered these projects with enhanced capabilities. For instance, Render's transition enabled new features such as real-time streaming, dynamic NFTs, and state compression. This has significantly improved the network's performance and scalability while unlocking its range of use cases.

Unlike high-value DeFi applications, DePIN projects are closely aligned with traditional edge computing and IoT concepts. They prioritize stability and affordability, while Solana excels in synchronization. Helium, with over 300,000 IoT devices and 3,000-some 5G devices, underscores the huge demand for hardware coordination, which can only be satisfied by Solana.

· DePIN Brings High Value to Solana

Projects like Helium have remarkably increased the number of active wallets within the Solana ecosystem. Helium alone reports over 60,000 active wallets monthly, engaged in activities like reward collection, staking, delegation, or token burning. Additionally, over 30,000 wallets are using other SPL programs, highlighting Helium's impact on the Solana ecosystem.

From the perspectives of regulators and policymakers, DePIN showcases Solana's practical application, enhancing its legitimacy and brand recognition.

Solana's Advantages

· Superior Performance and Technological Advancements

Solana boasts remarkable throughput capability, handling over 65,000 transactions per second (TPS) at peak times and between 2,500 to 3,000 TPS during regular periods. Notable performance features include rapid transaction confirmations, scalability, and block size. After the Firedancer upgrade, theoretical TPS could surpass 1 million, with routine TPS potentially exceeding 100,000. This is a primary reason why both Visa and DePIN have selected Solana.

· Robust Token Standards and a Thriving Ecosystem

Solana is a dynamic ecosystem with well-tested DEXs and established standards such as compressed NFTs (cNFTs), programmable NFTs (pNFTs), and Token Extensions. These provide fundamental components for DePIN projects to develop and launch their on-chain products.

· Low Cost

Even after the Cancun upgrade, Solana remains a low gas fee L1 solution. Some leading L2s, including ZK Rollup-based ZkSync and Starknet, as well as Optimistic Rollup-based Optimism and Base, have switched their DA layers to Ethereum mainnet Blob. This has reduced gas fees significantly, but not to the lowest level, as they didn't switch to Celestia.

· Concentrated Liquidity, Composable Ecosystem, and Unified Community

Significant ideological differences between Ethereum and other L2s have led to liquidity competition. This has been particularly pronounced in the current bull market, where minimal differentiation in technologies and ecosystems has resulted in limited wealth opportunities. General L2s pose no threat to competitive chains like Solana.

Driven by the recent momentum of meme coins, Solana's DeFi ecosystem has experienced rapid growth, with TVL reaching $3.3 billion. This suggests the launch of more attractive yield products and speculative products on Solana. Coupled with RWA, AI, and DePIN projects, DeFi products are poised for greater composability.

· An Active Developer Community Driving Innovative Projects and New Concepts

Solana has nurtured an active developer community through hackathons and various incentives, driving the expansion of its ecosystem. Prominent projects like Magic Eden, Stepn, and jito have emerged. Solana maintains its developer ecosystem and community activities even during bear markets. Through consistent incentive measures and hackathons, Solana has improved its infrastructure and stimulated greater development of innovative applications, further fueling its ecosystem's growth.

· Wealth Creation as the Best Marketing Tool

Saga's massive airdrops lead the way for crypto phone strategies, fostering the unity within Solana's communities. Projects like Solend, Helius, Chads, and Solcial have announced airdrops, benefits, and giveaways for Saga 2 owners. In the recent bull market, meme coin $BOME achieved the feat of being listed on Binance within just three days.

Ecosystem Developments

Below is a summary of DePIN projects on Solana

DePIN Category

Project Name

Wireless networks

Helium, Wifi Dabba

Storage networks

Shdw Drive, Aleph

Sensors

Hivemapper, Onocoy, WiHi

Render, io.net, Nosana, Grass, Synesis One, UpRock, Shaga, DAIN

Services

Teleport, Proto

Infrastructure

Sphere, Solsplits, and Token Standards (compressed NFTs, SPL token)

Summary of the Solana DePIN Ecosystem:

Leading Projects: RNDR and Helium

RNDR is a decentralized rendering platform.

Helium Network is a wireless network project. Since its inception in 2014, Helium has raised over $350 million from renowned investors such as a16z, Deutsche Telekom, Google, and Tiger Global. It migrated to the Solana blockchain in April 2024. Its current ranking on CMC is 64.

Second-tier Projects: Helium series (MOBILE and IOT), io.net, and Nosana

MOBILE and IOT are projects within the Helium ecosystem.

· IOT: The protocol token for the Helium IoT network, mined by LoRaWAN Hotspots through data transmission revenue and coverage proof.

· MOBILE: The protocol token for the Helium 5G network, awarded to those who provide 5G wireless coverage and Helium network validation. MOBILE is currently ranked 166th on CMC.

io.net is a "GPU Aggregator" that integrates GPU networks from data centers, crypto miners, and projects like Render, utilizing computing power for machine learning applications. Yet to issue tokens, it has 426,000 followers on Twitter. Its Serie A financing totaled $30 million, led by Hack VC, with participation from Multicoin Capital, 6th Man Ventures, M13, Delphi Digital, Solana Labs, and Aptos Labs. Its GUP miners have exceeded 50,000.

Nosana is a consumer marketplace connecting user-provided GPU networks and aiming to develop AI products.

Potential Projects: ALEPH, HONEY, and Shadow

ALEPH is a storage solution and interchain database.

Hivemapper (HONEY), launched in November 2022, is a decentralized global mapping network, rewarding contributors who collect 4K street images using dash cams through the Drive-to-Earn model. In April 2022, the project completed $18 million in financing, led by Multicoin Capital, with participation from industry professionals such as Solana's founder, former Apple Maps executives, and Helium's CEO. Hivemapper is currently ranked 513th on CMC.

Shadow, a rival to Filecoin, employs Shdw Drive to reduce the cost of corporate data center storage by utilizing efficient traditional and action computing – a technology called DAGGER.

Prospects of DePINs

· As DePIN projects demand infrastructure with high throughput, they are likely to be established on high-performance L1 networks, or even on L2 or L3 solutions.

· DePIN projects may explore various possibilities, including clean energy infrastructure and virtual power plants, exemplified by projects like Daylight and Etheos.

· The transition of DePIN projects to larger platforms, as observed with Helium and Render, enables smaller projects to harness their capabilities for further development.

· Dedicated DePIN chains have emerged, such as Peaq and IoTeX, two EVM/substrate chains specifically designed for DePINs. Additionally, some blue-chip DePIN projects, like Dimo, are using Polygon CDK to build their chains, indicating the demand for application chains.

· The composability of DePIN with other ecosystemsis particularly evident on Solana, exemplified by the wealth opportunities resulting from Bonk's airdrops to Saga holders. In the future, we can anticipate further integration between DePIN and DeFi for enhanced returns and speculative activities, as well as the fusion of DePIN with RWA, providing financing solutions for projects or data for the real world.

Let's look at some examples.

· DePIN x ZK

As technology continues to advance, solutions like ZK TLS can prove the authenticity of Web2 or Web3 data, bridging the gap between the two. Combining DePIN with ZK technology will give rise to a flurry of Web3 projects capable of "vampire attacking" their Web2 counterparts, a development worth noting.

Take Space and Time as an example.

Space and Time is a verifiable compute layer that extends zero-knowledge proofs on decentralized data warehouses, providing trustless data processing for smart contracts, LLM, and enterprises. It connects indexed blockchain data with off-chain datasets and adopts Proof of SQL to prevent computations from being tampered and to validate the integrity of query results.

Proof of SQL, a new ZK-proof develped by Space and Time, allows the data warehouse to generate a SNARK cryptographic proof of SQL query execution, proving that query computation was done accurately and that both the query and the data are verifiably tamperpoof.

Through the project, developers can connect indexed on-chain and off-chain data, and perform low-latency cached queries and large-scale analytical tasks using SQL transformations. Additionally, they can customize data into business-specific patterns, deploy queries to APIs, and build dashboards. Meanwhile, zero-knowledge technology ensures that tamperproof query results are sent to smart contracts in a trustless manner or directly published on-chain.

Currently, Space and Time has indexed Ethereum, Polygon, Sui, Sei, and Avalanche. It is supporting more chains while integrating with Chainlink.

· DePIN x AI

The development of decentralized physical infrastructure networks could revolutionize data utilization, including decentralized machine learning, exemplified by projects like Bittensor.

Bittensor is an open-source protocol that powers a decentralized, blockchain-based machine-learning network. Machine learning models engage in collaboration training in TAO and receive rewards based on the value of information they contribute. TAO also facilitates external access, empowering users to extract information from the network and customize network activities to suit their requirements.

· DePIN x Privacy

As mentioned earlier, while DePINs are decentralized physical networks, their business models focus on data utilization. Protecting data privacy is paramount for large decentralized networks. Consequently, integrating privacy protection measures is imperative for the growth of DePIN. Therefore, it's crucial to keep an eye on the sector's integration with privacy-enhancing technologies.

· DePIN x Gaming

The integration of DePIN and gaming can be analyzed from multiple angles:

1. Large decentralized hardware networks may enhance gaming experiences to some extent.

2. The combined concept of real-world wearable devices, gaming, and metaverse could become popular again.

3. DePIN hardware infrastructure may reshape incentive mechanism and gaming experiences.

References

1. https://www.panewslab.com/zh_hk/articledetails/8vy12wz3Ft.html

2. https://mp.weixin.qq.com/s/DE28WI5hE7OE5s2D-TFLxw

3. https://foresightnews.pro/article/detail/53218

4. https://DePIN.ninja/leader-board

5. https://DePINhub.io/rankings/investors

About Us

This article is a product of diligent work by the HTX Research Team that is currently under HTX Ventures. HTX Ventures, the global investment division of HTX, integrates investment, incubation, and research to identify the best and brightest teams worldwide.

With a decade-long history as an industry pioneer, HTX Ventures excels at identifying cutting-edge technologies and emerging business models within the sector. To foster growth within the blockchain ecosystem, we provide comprehensive support to projects, including financing, resources, and strategic advice.

HTX Ventures presently backs over 200 projects spanning multiple blockchain sectors, with select high-quality initiatives already trading on the HTX exchange. Furthermore, as one of the most vigorous Fund of Funds (FOF) investors, HTX Ventures collaboratively forges the blockchain ecosystem alongside premier global blockchain funds, including IVC, Shima, and Animoca.

Contact Details

Michael Wang

[email protected]

Company Website

https://www.htx.com/en-us/ventures

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Huobi Research Institute: The current situation and development forecast of the DePIN track, the medium- and long-term potential profit expectation of entering the DePIN market is more than 400 times