Most DePIN projects make little use of blockchain. Is it true or false?

Decentralized Physical Infrastructure Network (DePIN) is one of the hottest new stories in the cryptocurrency industry. However, the extent to which the DePIN project actually relies on blockchain networks is currently an open question.

Dubbed the “Internet of Things (IoT) with blockchain,” the DePIN project connects and manages physical devices that collect and exchange data, such as wireless networks, energy grids, or storage systems.

These networks generate huge amounts of data, so connecting DePIN via blockchain requires a high-throughput chain. Even blockchains can only record small components of data.

Helium, one of the best-known DePIN projects connecting wireless networks, abandoned its own chain and moved to Solana in April 2023. This is one of the fastest options currently available. However, for the DePIN project, which requires real-time computation capabilities, even Solana falls short of its efficiency.

Is the DePIN project really on-chain?

“Existing DePIN use cases are not really fully on-chain,” Shuyao Kong, co-founder of the upcoming MegaETH, told Magazine. Ethereum L2 aims to process 100,000 transactions per second, which may be sufficient for some DePIN projects.

So is the DePIN project labeled “blockchain” as a marketing ploy to attract venture capitalists?

Some might. However, the bigger problem is that currently fully on-chain DePIN applications are inefficient and expensive. Therefore, the project uses a hybrid structure that performs off-chain computations and records the results on-chain.

Kong said in a recent podcast that Solana’s co-founder approached her about a fitness tracker that would require calculating real-time biometric data, which Solana can’t do. Kong claims that the upcoming Ethereum L2 MegaETH will have such capacity.

Why DePIN? Project relies on off-chain calculate

Zhe Wang, CEO of DEPHY Network, a project that connects off-chain DePIN data to the blockchain, categorizes IoT into two main categories: sensors and executors.

Sensors collect data from the physical environment and do not necessarily require instant messaging. Think of things like weather sensor networks or pedometers.

The latency of sensors is more tolerable than that of executors, devices that act on commands, explains Wang.

Delays in executor calculations needed to drive or control lights can cause inconvenience or even pose a hazard.

“If I ask you to turn off the lights in your bedroom, it would be really bad because it would be delivered in 10 minutes, but if you count your steps per day, it’s okay,” Wang told the magazine.

Sensor data can be more easily transmitted on-chain, but continuous or large-scale data transmission can be expensive and inefficient, so it is still not ideal.

Why use bLockchain for DePIN?

So what purpose does blockchain serve for DePIN if both sensor and executor data are better computed off-chain?

“The DePIN project uses blockchain,” said Wes Levitt, Head of Strategy at Theta Labs. Because blockchain is a way to coordinate the activity of thousands, if not millions, of devices in a permissionless manner that does not require each device to trust the other,” says Wes Levitt. , tells the magazine.

DePIN use cases often require computation, but it is typically processed separately from what is recorded on chain.

As the name suggests, DePIN aims to decentralize the physical infrastructure that requires participants to host devices, provide bandwidth, or share data. However, despite its advantages, blockchain is not actually needed to run a decentralized infrastructure. Tor, a decentralized alternative internet with thousands of nodes worldwide, is one of the best-known examples.

Tor runs thanks to volunteers who are motivated by common interests such as privacy advocacy and technological experimentation.

Blockchain adds a layer of financial incentive to participation by rewarding contributors with tokens.

For example, DePIN marketplaces like CUDOS and Akash allow users to contribute computing power, including GPUs, that can be rented for AI services or other high-demand tasks. This allows contributors to earn tokens in return for sharing resources, creating a more economically sustainable system.

“This is what is being done on our Theta EdgeCloud platform and many other DePIN projects,” says Levitt. EdgeCloud nodes typically handle AI processing or video rendering tasks, which can take a node from minutes to hours to complete.

Levitt argues that sending partially completed work on-chain every few seconds is not worth it. Instead, nodes only need to submit proof of completion for verification and payment.

“In most cases, it is sufficient for nodes to send proof-of-work or coverage periodically over a period of time, possibly with some collateral to ensure compliance between validations,” he says.

Best and Worst Blockchain Networks for DePIN Projects

Ethereum is the largest blockchain that can handle DePIN, but L1 is not suitable at all due to its slow TPS. Layer 2 solutions like Base and Arbitrum can handle more transactions, but still only a few hundred per second.

However, 2025 could be the year when blockchain makes its biggest strides toward expansion.

MegaETH (short for “Make Ethereum Great Again”) is a Vitalik Buterin-backed L2 chain that uses an optimized sequencer to provide scalability while maintaining the security of Ethereum. Promises 100,000 TPS, but not yet released.

Sui, based on Facebook’s Move language, recently entered the fray, theoretically processing nearly 300,000 transactions per second, surpassing MegaETH’s near-real-time efficiency.

However, Sui’s highest recorded average TPS in October was 822, and its lowest on October 16 was 106 TPS. (i.e. TPS will vary based on demand and features, and actual TPS will invariably be much lower than testnet.)

Solana remains one of the fastest layer 1 blockchains, with a theoretical maximum of 65,000 TPS, but typically averages around 3,000 TPS, according to Solscan. The upcoming Firedancer client, currently on testnet, is targeting 1 million TPS.

However, Wang argues that even this impressive throughput is not enough to make the DePIN project fully operational on the blockchain.

He says that even a blockchain running at 1 million TPS is not enough to handle the massive amount of computing power DePIN requires.

According to DePIN Scan, there are more than 14 million devices on the WiFi map. This means that even if a device sends a single message every 10 seconds (which is very generous for an IoT real-time computation example), that blockchain would need 1.4 million transactions per second for that single project.

With 1.4 million transactions per second and a gas fee of $0.024 per transaction (Solana’s typical fee), the project would cost $33,600 per second.

“We do not expect a fully on-chain DePIN project to become the standard in the near future. “The real-time computational demands and massive data throughput required by many DePIN applications are much faster than current blockchain architectures can handle entirely on-chain,” said Head of Engineering at Autonomys Network, a distributed storage project powered by blockchain and AI. , Jeremy Frank, told the Magazine.

“That said, we expect to see more and more of DePIN’s functionality moving on-chain over time as scalability improves.”

The Future of DePIN: Evolving Blockchain and Professional Architecture

Currently, no blockchain can support truly real-time transactions for the DePIN project, Wang argues.

However, real-time computation is not essential for all DePIN applications, nor are these projects using “blockchain” as a marketing strategy to attract venture capitalists.

DePIN projects often split their architecture between on-chain and off-chain components to improve scalability and performance, with the on-chain component providing incentives and trustless verification possibilities.

Ultimately, while DePIN pushes the boundaries of blockchain technology, its success will depend on finding a balance between on-chain and off-chain processes.

Frank believes that future DePIN projects will evolve into more modular and specialized architectures that can handle the diverse computing needs of a variety of applications.

“You will see purpose-built execution environments optimized for specific DePIN verticals, such as real-time biometric processing, large-scale data storage, and high-frequency sensor networks.”

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Yoon Yohan

Yohan Yoon is a multimedia journalist covering blockchain since 2017. He contributed as an editor to Forkast, a cryptocurrency media outlet, and covered Asian technology stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking and experimenting with new recipes.