DePIN: rebuilding physical infrastructure

This week, we wanted to draw your attention to one of the most promising categories of blockchain applications — one that is seeing tangible real-world traction, revenues, and growing momentum: Decentralized Physical Infrastructure Networks, or as it’s known in the trade: DePIN.

Many existing physical infrastructure networks are natural monopolies, often protected by a regulatory framework. As a result, they’ve grown stale and inefficient — innovation is minimal, and customer experiences are often (very) poor. Think turds floating down the Thames or multiple blackouts in California.

DePIN networks offer a radically different model. They use cryptography and incentive mechanisms (i.e. crypto) to allow clients to request physical services from a decentralized set of providers—ranging from gig workers to small businesses to large incumbents. Anyone can contribute to the network’s infrastructure, fostering constant improvement. The model is more transparent, more robust, and more aligned with long-term innovation. Or to put it more succinctly, DePIN protocols unlock permissionless innovation.

Because DePIN networks distribute ownership to the people/entities that actually contribute to the network—early adopters especially are rewarded—they overcome the so-called cold-start problem and ignite network effects. Like the mechanisms behind for instance Bitcoin, but with a totally a different output.

To make all this more tangible, here are two great examples of DePIN protocols with meaningful traction today:

Grass

Grass is building a global network for real-time internet data collection. Anyone can contribute bandwidth to the network, which is then used to scrape and structure public internet data. Grass has raised $15M in venture funding, is collecting over 1,000–1,500 terabytes (that is huge) of data per day (see dashboard ) and has high eight-figure annual revenues — mostly from AI companies buying access to this uniquely rich dataset. With over 3 million contributors already, they aim to scale to 50–100 million globally, to meet the seemingly unsatisfiable demand.

Geodnet

Geodnet is a decentralized GPS infrastructure network made up of hundreds of thousands of individual space weather stations, providing centimeter-accurate location data. This is valuable for autonomous vehicles, drones, construction, agriculture, and loads more. Anyone can deploy a station and earn rewards for providing data, improving the global “positioning” infrastructure in the process. This is the kind of service that once could only be done by governments or telecom giants — now it's open to the crowd.

We’re seeing DePIN models emerge across many other categories like Compute (e.g. Render, IO.net), Storage and File Sharing (e.g. Filecoin, Arweave), Sensing / Data Collection (e.g. DIMO, Hivemapper), Hardware Infrastructure (e.g. Aethir).

One area where we have particularly high expectations for is energy networks. In the U.S., millions of solar panels, batteries, and EVs are user-owned, producing surplus energy that could support the whole grid. But utilities have no good way to interact with these fragmented devices. Protocols like Daylight are building a solution to this — enabling users to sell metadata about their connected devices or temporarily cede control to energy providers in exchange for rewards. In short: Daylight is building a decentralized virtual power plant. I’ll let that sink in.

DePIN is a great example of how blockchain enables new business models. The examples above aren’t creating entirely new industries — they’re re-architecting existing ones. The infrastructure is real. The economics are better. And the opportunity set is vastly larger than the purely virtual world. And the great thing is: we are only getting started!

Also this week

• Circle files S-1 ahead of long-awaited IPO
• ‘Feeding frenzy’ possible as crypto M&A picks up
• Alabama, Minnesota lawmakers join US states pushing for bitcoin reserves
• Fidelity introduces retirement accounts with minimal-fee crypto investing
• Crypto VC Maven 11 raises over $100 million for third fund amid cautious LP climate. Big congratulations on the successful fund raise from the Theta team!
• Reintroduced anti-CBDC bill passes US House Financial Services Committee

Relevant financial updates

• Abound, a financial services platform that enables U.S. users to send money to India with competitive FX rates and grocery store cashback rewards, raised $14 million from Circle Ventures NEAR Foundation and others
• Ambient, a Solana SVM-compatible Layer 1 blockchain with a novel Proof of Work mechanism for fast, low-cost verified AI inference, raised $7.2 million from Delphi Digital Crypto Startup School (CSX) and Amber Group
• Mahojin, a search-to-generate AI image platform featuring a remixable visual library for collaborative creation, raised $5 million from Crypto Startup School (CSX) Wagmi Ventures Maelstrom and others
• Bitfarms, a global vertically integrated Bitcoin mining company listed on NASDAQ and TSX, raised $50 million in post-IPO debt financing from Macquarie Capital.
• Ultra, a blockchain-based gaming platform for game distribution, digital asset trading, and a community marketplace, raised $12 million from NOIA Capital.
• Kinto*, an Ethereum Layer 2 designed for compliant financial access with KYC, built-in insurance, and dev incentives, had its TGE and currently trades at $33 million FDV
• StakeStone*, an omni-chain liquid staking protocol had its TGE and currently trades at $70 million FDV
• Gunzilla*, an independent AAA video game developer which integrates blockchain technology to enable player ownership of in-game assets had their TGE and currently trades at $435 million FDV
• Cambrian Network*, an AI infrastructure project providing financial data and predictive market forecasting to inform and train AI agents. Raised a $5.9 million seed round led by a16z
• Drip Haus*, a NFT platform that enables creators to distribute free content, such as art and music to subscribers has been acquired by Jupiter a DEX aggregator on Solana for an undisclosed sum
• Félix Pago*, a US-Latam focused remittance fintech, which uses blockchain and AI to enable fast low cost transfers, has raised $75 million in a Series B from QED Investors, Castle Island, Monashees and others
• Republic*, an is set to acquire crypto trading firm INX Digital at a valuation of up to $60 million

*Underlying TBV portfolio position | Prices as per 04/04

Interesting things to read

• The Chopping Block with new SEC Commissioner Hester Peirce on Freedom, Fraud and Fixing the SEC
• Guy Wullet from a16z discusses the potential of Decentralized Physical Infrastructure Networks (DePIN) to transform traditional monopolistic systems like energy and telecommunications
• Explore how Story Protocol aims to turn IP (intellectual property) into programmable, onchain assets, enabling creators and even AI agents, to register, protect, and license IP more efficiently

Upcoming events

• Webinar ‘Belegging in Crypto, Financial Investigator
• LW3 Digital, New York
• Legends4Legends 2025, Amsterdam