DePIN’s Blockchain Evolution: Is Solana Still the Best Choice?

• DePIN’s market cap surged 400% to $20B, but revenue growth remains weak, signaling demand constraints.
• Seven of the top eight DePIN protocols are DRNs, with Helium as the sole PRN in the top ranks.
• Major 2024 investments in DePIN-focused L1s like IoTeX and Peaq highlight growing investor confidence.

The Decentralized Physical Infrastructure Networks (DePIN) sector is experiencing explosive growth, with fundraising volume increasing 296% year-over-year and market capitalization surging 400% to reach $20 billion.

This meteoric rise highlights DePIN’s increasing significance and potential. However, despite the impressive figures, revenue generation across the sector remains relatively low, indicating that DePIN is still grappling with demand constraints.

Since the previous update , several new DePIN sub-sectors have emerged. These include Decentralized Gaming Infrastructure (DeGIN) with a focus on Compute Networks, AI Data Layer which is centered around Bandwidth Networks, Robotics with an emphasis on Mobility Networks, and Manufacturing, also within the Mobility Network category.

Of the top eight DePIN protocols by market cap, seven are Digital Resource Networks (DRNs), boasting a combined valuation of $12.2 billion. Helium is the only Physical Resource Network (PRN) to secure a spot in the top eight.

Despite the growth in market cap, revenue does not reflect the same upward trend. Only four of the leading DePIN protocols rank among the top eight by revenue, underscoring a significant disparity. 

The sector remains largely demand-constrained, with centralized platforms offering more integrated solutions that combine raw resources with customized services. This contrast highlights the need for DePIN to address these constraints to enhance revenue generation.

Investors appear to be placing their bets on DePIN-tailored Layer 1 (L1) chains. Two of the largest deals in 2024 involve investments in L1s specifically designed for DePIN. iotex_io secured a $50 million round, while Peaqnetwork raised $30 million. These investments reflect investor confidence in the potential of DePIN-specific infrastructure.

Currently, Solana leads in blockchain adoption, hosting roughly 78 DePIN projects . Meanwhile, emerging DePIN-focused L1s like IoTeX and Peaq are actively expanding their ecosystems, further contributing to the sector’s overall growth. This indicates a rising interest in and adoption of blockchain networks catering to DePIN’s unique requirements.