Welcome to Slate Sundays, we present new weekly features from Cryptoslate, with in-depth interviews, expert analysis, and thought-provoking enlightenment beyond headlines to explore the ideas and voices that will shape the future of code.
Decentralized Physical Infrastructure Networks (DEPIN) has become one of the crypto industry’s beloved people among the fastest growing sectors in Web3. According to the World Economic Forum (WEF) Technology Convergence Report, Depin is snowballed from its current valuation of $30 billion to $3.5 trillion by 2028.
This is an increase of around 11,576% (please ask ChatGPT).
On paper, Depin is certainly heavyweight. But is it ready to go from round to round and actually move the world?
Understanding Depin’s landscape today
Depin’s magic lies in creating physical infrastructure (think bandwidth, cloud storage, smart cars, microgrids). A normal person can plug in idle devices such as sensors, cars, and mobile phones, and receive a reward for keeping the network alive.
The Depin world is bustling with blockchain-based, community-owned networks that support real-world infrastructure in all sorts of ways, and use cases continue to increase.
WEF estimates over 1,500 active Depin projects, opening up physical infrastructure to the masses, allowing individuals and communities to participate in ecosystems once reserved for large businesses and central players.
By leveraging blockchain, Depin increases transparency, security and efficiency in how resources are used, and receives tokenized rewards for contributors to engage.
Why is hype the real thing?
One of the main factors behind Depin’s rise is the convergence with AI, particularly the emergence of distributed physical AI (DEPAI), which allows machine learning models to leverage data and calculate from a variety of, distributed, and global networks.
Unlike other areas of Web3, such as Memecoin and Permanent, Depin is more than just financial speculation. It’s about mass adoption of blockchain and making users active participants in the digital economy.
And in a data-powered world, Depin really shines. Not only do you know what the data is, you know where it came from, who verified it, if it was fake or grew up.
As the need for AI training data explodes, the value of high-quality, unreliable origin data data will rise in steps, and Depin is essential not only for crypto but also for global digital infrastructure.
From home to Internet to IoT
Xyo is a company that validates and moves real-world information with chains of Depin, AI, and RWA apps. Released in 2018, Xyo has over 10 million nodes and ranks as the fourth-highest-earning Depin project to date. Co-founder Marcus Levin explains:
“We act as an unreliable oracle, validating and verifying real-world data that enhances AI, Web3, and enterprise use cases. 80% of our network are non-cryptic users. We can earn truck drivers and Uber drivers, joggers and many others.
The Althea Network brings blockchain-enabled internet to thousands of homes. The team reports four petabytes of routed traffic across 12 states and multiple countries, addressing the issue of $100 billion in US government spending increasing dents of less than 1% in connections. As co-founder and CEO Debora Simplier said:
“About one in four people in the US don’t have enough internet.”
Another example of a Depin network is Sentinel. It offers a distributed VPN infrastructure and boasts 359,000 users and 7,500 volunteer operation nodes around the world. Sentinel also builds custom SDKs to enable VPN functionality for common applications, even in highly censored regimes like Turkmenistan.
The Depin sector is not just about location data and supply chain Oracles. Its reach is much wider and extends deeper into the physical fabrics of the connected world.
Crypto Investor Blueprint: 5-day course on bag holdings, insider frontrunning, and lost alpha
For example, Helium began as a grassroots mesh network for IoT sensors in 2019, exploded into a community-driven wireless movement, with tens of thousands of hotspots deployed globally.
Instead of relying on carriers and corporate towers, helium can network everyday people, providing wireless coverage for smart sensors, scooters and asset trackers, and earning tokens by turning idle hardware into encrypted utilities.
Also, when it comes to data storage, Filecoin’s Depin network enables distributed storage. This not only leads to avoiding concentrated actors, but also leads to increased privacy, reduced costs, and fundamentally reduced risks of censorship or downtime.
These projects span the home internet, censor-resistant communication, mobility and storage infrastructure that highlight the diversity and scalability of the Depin model.
Is Depin ready for prime time?
Despite the growing hype and adoption, decentralized physical infrastructure scaling remains Depin’s biggest hurdle. One of the most challenging challenges in integrating real-world hardware is the economies of scale.
Traditional blockchains struggle to process huge numbers of transactions and data in real time, especially as depin networks connect thousands and even millions of physical devices around the world.
Unlike purely financial networks, every new sensor, router, or contributor adds a new stream of bandwidth, calculation, or storage that must be safely tracked and rewarded, not just another wallet.
As network scale increases, congestion and latency rise sharply, increasing the risk of transaction confirmation times, unpredictable charges, and outages in high-throughput environments.
This challenge is amplified as Depin seeks to power real-world infrastructures that require seamless response, reliability and ultra-low latency. Current infrastructure, although promising, often fails to meet these demands.
Large-scale participation also brings scrutiny of consumer protection, KYC/AML, and data privacy regulations. Depin’s physical touchpoints, such as routers, vehicles, and storage, are inherently exposed to security breaches than purely digital systems, and therefore require strong defense against hacking, civil attacks, or hardware vulnerabilities.
And despite over 1,500 live projects and ratings of hundreds of billions, only a handful have proven themselves through years of operation.
The road to open digital economy
It seems that Depin’s three years are projected to expand by 70 times. But it has driven the growth of AI and global demand for community-owned infrastructure, and Tailwinds is blowing away with the favor of Depin.
As WEF points out, Depin’s convergence with decentralized AI could fundamentally change the global computing landscape, leading to a more open, secure and accessible digital economy.
And so are those who continue to move beyond hype as the number and diversity of Depin projects continues to grow, and so are those who are moving beyond hype and providing real infrastructure and inclusion on a truly global scale. Perhaps one day, everyone on the planet, from Tennessee to Timbuktu, will be able to plug in, contribute and own new digital infrastructure.
