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"Strange loops arise whenever, by moving upwards or downwards through levels of some hierarchical system, we unexpectedly find ourselves right back where we started."

— Douglas Hofstadter

Checking in on DePIN

Crypto is primarily an attention economy, so where we choose to direct our attention has real consequences. 

Most recently, our attention has shifted away from the memecoins that have monopolized it for much of the year: WIF and BONK are each 50% off their post-election highs; newer coins like PNUT and GOAT are more than 60% off their highs; promising memes like Chill Guy and Mother never really got any traction; a post-election burst of listings on centralized exchanges has fizzled out.

It’s true that blue-chip memes are holding on to their inexplicably sky-high valuations, but it feels like the ceiling for newer coins is now lower — probably just because there are too many of them for us to pay attention to.

Attention is the scarce asset in crypto and the current craze for "AI agent" coins seems to be absorbing nearly all of it, to the detriment of every other type of digital asset.

Bitcoin is struggling to hold our attention, too: Even Michael Saylor’s eye-popping promise to buy another $3 trillion worth has failed to keep the price above $100,000.

But what's been getting no attention at all lately is DePIN. 

This is a change because it wasn’t so long ago that Decentralized Physical Infrastructure Networks appeared to be crypto’s best chance at breaking out of its circular, self-referential and not-very-productive attention economy.

 Critics often liken crypto to an ouroboros (the proverbial snake eating its own tail) and it’s hard to argue with that, because for all the recent enthusiasm, crypto is still mostly about trading crypto. 

DePIN, by contrast, offers a bridge to the outside world, and with it, an opportunity for the crypto snake to escape from the lab (so to speak).

People seem to have given up on that ambition: DePIN fails, for example, to crack the top 10 in VanEck’s predictions for 2025 and gets nary a mention in the Blockworks Research year-ahead note ($).

Nor does it get a mention from Binance Labs, which seems to be invested in every subsector of crypto other than DePIN — even gaming!

Things are pretty grim when you’ve fallen below long-underperforming gaming in the crypto hierarchy — but is it really as bad as that?

2024 was the first year in which DePINs earned real revenue and a few DePIN projects ended the year with revenue trending higher.

Hivemapper is selling more mapping data (and using the proceeds to buy and burn its HONEY token):

Akash is facilitating more GPU rentals (mostly to train AI models, I think):

Render Network is similarly making GPUs available to artists and others:

GeodNet’s location data (centimeter-prices GPS) is also increasingly in demand:

In absolute terms, however, these numbers are still pretty small — and by crypto standards, it’s taken a long while to achieve them, so you can imagine why dopamine-addled crypto traders have lost interest in DePIN tokens.

It also doesn’t help that revenue growth at Helium — the DePIN people were most excited about — seems to have stalled lately.

But it should be remembered that DePINs sell services unrelated to crypto to people who are not interested in crypto and that is no easy task for decentralized protocols that don’t naturally operate like for-profit businesses — Greg Osuri once told me that Overclock Labs (the maker of Akash) employs no business development or salespeople because they want demand for Akash to develop organically.

That is a high-minded notion, but word-of-mouth-sales is proving to be a slow burn for DePIN protocols — and in the meantime, token prices are being weighed down by the emissions used to incentivize the supply side of the DePIN equation, testing the patience of holders.

I hope we don’t give up on them, though, because the real-world upside from many of these projects could be well worth the wait.

In addition to better maps, more exact GPS and democratized GPUs, DePIN founders are working on cheaper WiFi, virtual power plants, and — most ambitiously — a faster, more censorship-resistant internet.

I don’t know what the odds are that any of those work out, but it’s at least evidence that crypto hasn’t given up on thinking big — and that it still has a chance to break out of the strange-loop attention economy that prevents it from having an impact on the real world.

That would have an impact on the crypto world, too, of course: DePIN still seems like one of crypto’s best chances to stop eating its tail.

— Byron Gilliam

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