depin

While token prices across the decentralized physical infrastructure network (DePIN) sector remain under heavy pressure, on-chain revenue figures suggest the industry’s fundamentals may be more resilient than market prices imply, according to a recent report by Messari.
Most DePIN-related tokens have traded sideways or declined throughout 2025. Projects launched between 2018 and 2022 are currently down between 94% and 99% from their all-time highs. However, despite this prolonged downturn in token valuations, a small but growing group of DePIN networks is recording steady increases in on-chain revenue — signaling a potential shift away from speculative valuation models toward real economic activity.
From Speculation to Real Usage
DePIN projects leverage blockchain technology and crypto-based incentive mechanisms to coordinate real-world hardware infrastructure — such as wireless networks, data storage, energy systems, and sensor networks — through peer-to-peer participation rather than centralized operators.
As of 2025, the DePIN sector holds an estimated circulating market capitalization of approximately $10 billion and is projected to generate around $72 million in on-chain revenue this year. Notably, leading revenue-generating DePIN networks are now trading at valuation multiples of roughly 10x to 25x revenue. This represents a dramatic contrast to the 2021 market cycle, when some projects were valued at more than 1,000x revenue despite minimal real usage.
According to Markus Levin, co-founder of DePIN project XYO, the sector is being forced back to fundamentals. When token prices stagnate or decline, the key question becomes whether users are genuinely paying for services and whether networks can sustain themselves without continuous token subsidies. Levin views this transition as a healthy and necessary evolution for the industry.
Sustainable Scaling Remains the Core Challenge
Messari’s report highlights that only a limited number of strategies remain viable for DePIN projects seeking sustainable long-term growth. One emerging approach involves alternative financing models, particularly InfraFi — a framework that combines decentralized infrastructure with crypto-native capital markets.
InfraFi focuses on funding physical infrastructure using crypto-sourced capital, including stablecoins. With more than $175 billion in stablecoins currently in circulation, early InfraFi experiments suggest DePIN assets could attract capital seeking yield. However, these models also introduce new risks, including credit exposure, capital duration mismatches, and regulatory uncertainty. As such, InfraFi remains in its early stages of development.
Dylan Bane, senior research analyst at Messari and author of the report, emphasizes that DePIN’s long-term credibility depends on its ability to generate sustainable revenue by selling valuable resources to the open market. While partnerships, ecosystems, and community engagement can help stimulate supply-side growth during favorable market conditions, newly added supply must translate into real demand and revenue for DePIN models to remain viable.
Bane also notes that while projects should not abandon supply-side expansion strategies, achieving genuine product–market fit on the demand side must be the top priority.
Growing Intersection With AI Demand
Another notable trend is DePIN’s increasing relevance to the rapidly expanding artificial intelligence sector. According to Levin, AI developers are facing growing demand for compute power, storage, and, critically, verifiable real-world data — areas where certain DePIN networks may hold a strategic advantage.
Over time, AI buyers are expected to care less about decentralization as an ideology and more about practical outcomes such as cost efficiency, reliability, and data provenance. This shift could create new demand channels for DePIN services that are less sensitive to crypto market cycles.
Private Capital Remains Active
Despite weak token performance in public markets, private investment in DePIN remains robust. DePIN-focused startups raised approximately $1 billion in 2025, primarily through seed and Series A funding rounds. This suggests that private investors continue to believe in the sector’s long-term potential, even as public markets heavily discount the survival prospects of many projects.
Opinions differ on whether 2026 could set new investment records. Bane argues that no clear catalyst currently exists to drive a major surge in funding, while Levin anticipates a new wave of capital once DePIN is increasingly recognized as a viable, financeable infrastructure sector.
According to Levin, investors are now conducting deeper due diligence, focusing on unit economics, payback periods, and revenue durability as incentives are gradually reduced. Projects that can demonstrate real demand, recurring revenue streams, and a clear capital expenditure roadmap may be better positioned to attract larger investment commitments.
This article is for informational purposes only and reflects personal analysis. It does not constitute investment advice. Readers should conduct their own research before making any investment decisions. The author assumes no responsibility for any financial outcomes.
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