DePIN Tokenomics Part 1: Token Distribution Models, Incentive Mechanisms, Token Trends, and More

Key Insights

• The average token incentive issuance rate is more than twice as high for protocols running their own proprietary Layer-1s vs. those using general-purpose base layers.
• All DePIN incentive mechanisms require some sort of “skin-in-the-game”: Digital Resource Networks (DRNs) primarily use a Stake for Access token incentive model, while Physical Resource Networks (PRNs) primarily use a Node-Purchase model.
• Burn-and-Mint (BME) and Node-Purchase models have become more common over time, driven by an increase in PRN launches. For example, the share of DePINs using BME more than doubled from pre-2022 launches (11%) to post-2022 launches (25%).
• DePINs mainly use centralized gateway companies or foundations to generate revenue with plans to decentralize the demand side over time.

Primer

Decentralized Physical Infrastructure Networks (DePINs) typically distribute token incentives to their node operators in return for supplying network services. Messari classifies DePINs into two main categories based on the type of underlying resource they procure: