Decentralized Physical Infrastructure Networks (DePIN)

Advocates of decentralized physical infrastructure networks, or DePIN, claim that projects in this space leverage blockchain technology to grant users control and ownership over physical infrastructure networks in the real world, ranging from GPU chips to wireless data networks. This delivery of real-world value distinguishes them from other crypto projects.

Alvaro Garcia, a partner at Borderless Capital, mentioned, > "DePIN is probably the only category in web3 where the value comes from outside the crypto sector," indicating that DePIN projects are uniquely resistant to bear markets affecting the broader crypto landscape.

In a recent interview at the Mainnet conference, Greg Osuri, founder of DePIN protocol Akash, which offers a decentralized marketplace for buying and selling computing power via its AKT token, echoed Garcia’s sentiment and noted that regulators are taking notice.

Osuri shared, > "I was in a meeting with one of the chief staffers of the House Committee on Energy and Commerce… and they were like, 'We know Akash, you are the intersection of DePIN and AI,'" referring to the meeting as "very productive."

He continued, > "The brand Akash has in the mainstream is that it is disrupting existing oligopolies, which is what crypto is supposed to do. In a way, DePIN is appealing to mainstream crowds a lot more than the other sectors of crypto."

DePIN is increasingly drawing attention from venture capitalists like Borderless Capital, which recently raised $100 million for its third DePIN fund. The first two funds invested in projects such as Helium, a decentralized wireless carrier, and GEODNET, a decentralized real-time kinematic (RTK) network for satellite navigation.

Osuri argues that the unique value proposition of DePIN justifies a distinct regulatory approach from other crypto sectors, like decentralized finance (DeFi). To support this effort, Akash and competitor InFlux Technologies, which also operates a decentralized compute network, recently announced the formation of a DePIN and Web3 advocacy group aimed at educating regulators on DePIN's significance.

Osuri stated, > "There is an underserved regulatory need right now to ensure DePIN is regulated differently than NFTs and DeFi. Regulators tend to group all sectors into a single category, regulating them uniformly, so it is crucial for us to decouple DePIN from other crypto regulation." He added that both Akash and InFlux have set aside competition to demonstrate unity in this effort.

Although DePIN projects leverage crypto features like blockchains and tokens, Osuri emphasized that communicating the tangible benefits of DePIN is more critical than promoting the 'crypto' label. He stated, > "If you go to Akash's website, there's almost no mention of crypto… we're trying to communicate to the user to benefit rather than the architecture. I avoid the word 'crypto' and nobody cares. An AI person would say, 'I don't need 'verifiability' as long as I can get all the GPUs I need.'"