The Rise of DePINs

While Blockchain is seeing a number of trends and growing use cases emerge, some of the most significant advancements in blockchain technology are emerging outside of digital environments. Decentralized Physical Infrastructure Networks (DePINs) represent a new category of networks that redirect blockchain potential toward physical infrastructure.

DePIN systems use blockchain-based incentives and verification mechanisms to coordinate physical assets, including wireless equipment, connected vehicles, environmental sensors, and much more.

DePINs establish systems that track physical contributions and provide rewards through open tokenized systems. People use hardware components such as hotspots, dashcams, and weather stations to provide data and services that become accessible to others. DePIN can verify activity and automate payment distribution while giving access to governance with transparent processes. Current development around DePIN marks a substantial shift from previous Web3 initiatives that predominantly focused on software development instead of physical applications.

Examples in Practice

Helium is a decentralized wireless network where users deploy LoRaWAN and 5G Hotspots to provide IoT and mobile data coverage. As of January 2025, contributors earn HNT directly. Rewards are based on Proof-of-Coverage, data transfer, and validated network participation. This model enables low-cost, community-driven network expansion.

DIMO is a decentralized vehicle data platform that lets users collect metrics like engine performance, location, and battery status. Vehicles connect via the DIMO Macaron or mobile app, with data securely transmitted and owned by users. Unlike traditional, closed industry models, contributors earn DIMO tokens, giving drivers a stake in the vehicle data economy.

WeatherXM is a decentralized weather network where user-installed stations collect data like temperature, wind, and humidity. Data is sent to a blockchain platform, with users earning tokens for reliable contributions. It supports better forecasting and reduces reliance on government or corporate systems through the DePIN model.

The Success of DePIN

These examples of DePIN projects show that Blockchain can successfully operate beyond its typical ledger functionality and use cases often associated with Decentralized Finance (DeFi), NFTs, and other applications. These systems use blockchain technology to authenticate services while providing payment rewards to contributors. Networks transform users into infrastructure providers who contribute to the system. The DePIN model distributes ownership and responsibility in ways conventional systems do not support while operating autonomously to manage participant verification and payment distribution through smart contracts and public verification mechanisms.

Implementing such networks brings unique challenges distinct from the issues that previous blockchain platforms needed to solve. DePINs produce countless minor data points and transactions reaching the thousands or even millions. Traditional blockchains, including Ethereum, cannot efficiently handle large numbers of low-value transactions at a large scale, even though Layer 2 and Layer 3 Blockchain networks now alleviate some scalability issues.

Onyx and DePIN

With the launch of their recent Layer 3 XCN Ledger Blockchain, Onyx released a new Whitepaper that mentioned solutions, including the potential of DePINs. Using Arbitrum Orbit and Coinbase's Base Layer 2 platforms to deliver cost-effective scalability while keeping compatibility with Ethereum's broader network, networks such as this make it more effective for DePIN to become more widely adopted.

The Onyx whitepaper explains that the network focuses on supporting systems that need constant off-chain data verification, rapid finality, and token distribution based on measurable contributions. Onyx has been designed to support the technical and economic models typical of DePINs. Its infrastructure supports programmable token incentives and can interact with external data sources through oracles. It also provides the ability to operate sub-networks or application-specific rollups. This allows organizations or consortiums to build specialized systems that meet regulatory or operational constraints while being part of a broader decentralized framework. Onyx could provide a foundation on which DePIN economic and coordination models can reliably function.

DePINs Going Forward

The development of DePINs extends blockchain technology capabilities beyond its current applications. DePINs demonstrate practical blockchain implementation by connecting technological coordination with tangible results. System users now act as infrastructure contributors who earn payment for their contributions. This new structure enables communities to build, maintain, and benefit from physical infrastructure that would otherwise be imposed through top-down methods. As the technology progresses, we are likely to see further use cases and an increase in growth when it comes to DePINs and their rise within the Blockchain industry, potentially leading the next wave of innovation.

Conclusion

The transition to DePINs presents multiple challenges but demonstrates how digital systems can interact with physical systems. Operational networks such as Helium, DIMO, Hivemapper, and WeatherXM, along with projects such as Onyx discussing the potential of implementing DePINs, demonstrate Blockchain's expanding role and potential impact on interactions in our everyday lives.

About Chain

Chain is a blockchain infrastructure solution company that has been on a mission to enable a smarter and more connected economy since 2014. Chain offers builders in the Web3 industry services that help streamline the process of developing, and maintaining their blockchain infrastructures. Chain implements a SaaS model for its products that addresses the complexities of overall blockchain management. Chain offers a variety of products such as Ledger, Cloud, and NFTs as a service. Companies who choose to utilize Chain’s services will be able to free up resources for developers and cut costs so that clients can focus on their own products and customer experience. Learn more: https://chain.com.

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