Solana-based Pipe Network aims to be ‘ruthless’ about tokenomics

A report from the end of 2024 showed 350 DePIN tokens combined for $50 billion in market cap

article-image

Tharin kaewkanya/Shutterstock and Adobe modified by Blockworks

share

This is a segment from the Lightspeed newsletter. To read full editions, subscribe.


I hosted Permissionless Labs CEO David Rhodus on the Lightspeed podcast this week, and he gave me an overview of Pipe Network, the company’s forthcoming content delivery network (CDN) that’s being built on Solana. 

His pitch made some intuitive sense: CDNs — which temporarily store online content on servers around the world to get closer to end-users — haven’t seen much innovation in 25 years. Pipe could let content be stored even closer to users, which would make their content load faster. 

But outside of the product itself, what made an impression on me was the disciplined approach Rhodus described for his DePIN project. 

Rhodus said Pipe will be “ruthless” about tokenomics. 

“We’re emitting tokens when useful work is done,” Rhodus said. “While we want a lot of nodes, we also want to coordinate them into areas that customers will find useful.” This could look like focusing on business deals where Pipe supplements existing CDN infrastructure in low-performing areas and presumably uses its token to incentivize node operation in those areas.

DePIN is hailed as one of Solana’s most useful business sectors, but the bottom line has proven tricky for these companies so far. 

Businesses like Helium and Hivemapper promise to wrest power from legacy infrastructure providers and give control to everyday people, but noble as that goal may be, the economics don’t always make a ton of sense. 

A Messari report from the end of 2024 found that 350 DePIN tokens had a collective $50 billion in market capitalization. However, this class of startups has struggled to find mass market adoption and justify that collective valuation. 

That’s partly why Rhodus advised potential founders to “go as long as possible” before adding crypto elements to a business.

“Don’t focus on crypto at all until you’ve got users and revenue,” Rhodus said.

The days of simply plugging in some kind of mining device and getting lucrative token rewards regardless of a node’s value to the larger network may need to end if the DePIN sector is going to mature past hype and create sustainable businesses.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (10).png

Research

Kamino has evolved into a full-stack asset scaling suite with V2: unlocking new markets, improving capital efficiency, and catering to various risk profiles. We believe it is best positioned to become the credit backbone of Solana as the ecosystem matures. Simply put, KMNO remains our highest-conviction bet in the Solana ecosystem. This report lays out our thesis.

article-image

EigenCloud wants to make crypto-economic guarantees a plug-and-play primitive

article-image

In a new letter, Gemini alleges that the CFTC’s DOE had ulterior motives for 2022 suit

article-image

Sponsored

Neitec’s Debita platform is closing the credit gap by unlocking high-yield private debt in markets that need it most

article-image

From bank porters to stablecoins, the history of money is a story of acceleration

article-image

The Byreal DEX will use both centralized and decentralized liquidity sources to route trades

article-image

Last week’s solana ETF amendments points to “some sort of push from the SEC to get things organized,” a person familiar tells Blockworks.