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DePIN

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:

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Mihai is Director of Research at Messari. Mihai leads Protocol Research, covering base layers, mid-layer infrastructure, DeFi, and consumer apps. Prior to joining Messari, Mihai was a tech entrepreneur and worked in AI at UBS and Swiss Re in Zurich. His background is in computer science and math. Mihai holds a PhD in information systems from ETH Zurich, Switzerland

Robert is Head of Economics at 1kx, focusing on DePIN and working with portfolio companies on their economic designs. Before 1kx, Robert led data science teams (LLMs and pricing), was a member of BCG’s Risk team, and founded a startup.

Dylan is a Sr. Enterprise Research Analyst focusing on DePIN, DeFi, AI, and RWAs. He previously worked as a digital assets investment analyst at T. Rowe Price and in venture capital. Dylan is a graduate of Princeton University and co-founded the Princeton Blockchain Club.

Mentioned Assets
Outline
  • Key Insights
  • Primer
  • Inclusion Criteria
  • Incentive Mechanisms in DePIN
  • There’s More: DePIN Token Trends
  • Conclusion
Authors
Mihai is Director of Research at Messari. Mihai leads Protocol Research, covering base layers, mid-layer infrastructure, DeFi, and consumer apps. Prior to joining Messari, Mihai was a tech entrepreneur and worked in AI at UBS and Swiss Re in Zurich. His background is in computer science and math. Mihai holds a PhD in information systems from ETH Zurich, Switzerland
Robert is Head of Economics at 1kx, focusing on DePIN and working with portfolio companies on their economic designs. Before 1kx, Robert led data science teams (LLMs and pricing), was a member of BCG’s Risk team, and founded a startup.
Dylan is a Sr. Enterprise Research Analyst focusing on DePIN, DeFi, AI, and RWAs. He previously worked as a digital assets investment analyst at T. Rowe Price and in venture capital. Dylan is a graduate of Princeton University and co-founded the Princeton Blockchain Club.
Mentioned Assets