Decoding DePIN, Part 2: How to Spot a Good DePIN

Last week — with your help (thanks!) — we took a jab at defining what DePIN truly is and how to catch the real ones amongst the wannabes.

Now, we're tackling another scalding topic: Which of these projects are the actual GOOD ones? 👀💸

(We’re half-joking.)

What we mean to say is… How do you identify DePIN projects that are built to last?

If you're in the space, you know the challenge.

With hundreds of projects launching and each promising to revolutionize infrastructure, separating signal from noise has become a full-time job.

How do you know if that promising whitepaper will translate into real-world adoption? When does innovative technology actually equal sustainable value?

The truth is, we've got something cooking that's going to change the game. 🤫

After months of research, we're about to launch an initiative that will transform how YOU evaluate DePIN projects. So consider today's analysis a sneak peek into our methodology — a glimpse of what's coming to help you navigate the increasingly complex DePIN landscape.

Let's dive into the three critical pillars that separate the winners from the rookies in the DePIN space.

Core project attributes

When evaluating a DePIN project, the fundamentals matter more than anything. We're talking about the project's DNA — its core technology, the team behind it, and the roadmap guiding its evolution.

While flashy marketing and impressive token metrics might catch your eye, it's these core attributes that determine whether a project can weather market storms and deliver real value. In DePIN, the strength of these fundamentals becomes even more critical as projects must execute in both the digital and physical realms.

When analyzing a new DePIN project, you're probably asking yourself:

"Is this technology actually solving a problem, or is it blockchain for blockchain's sake?"

"Does this team have the expertise to deliver on their ambitious roadmap?"

"Are the technical milestones realistic and well-thought-out, or just wishful thinking?"

Let's learn how to analyze core attributes by examining a project that's setting the standard.

Case study: Mawari

Ah, Mawari. In a space filled with grandiose promises, Mawari stands out by solving a concrete problem: making AR/VR experiences more accessible through breakthrough compression technology.

But what really catches our attention isn't just their 95% reduction in cloud rendering costs — it's how this translates into real-world application.

During our recent podcast with their team, we got a behind-the-scenes look at how they're tackling the biggest challenge in AR/VR content delivery: the bandwidth-quality tradeoff.

What sets them apart?

First, their team brings decades of combined experience in computer graphics and cloud infrastructure. These aren't blockchain enthusiasts who discovered AR; these are AR experts who recognized blockchain's potential to revolutionize their industry. This expertise shows in their approach to development — methodical, focused on solving real technical challenges rather than chasing crypto trends.

To sum it all up, here are some things you should be asking yourself when thinking about a project’s core attributes:

• Does the technology solve a real, measurable problem?
• Is the team's expertise aligned with the project's goals?
• Does the roadmap show logical progression and understanding of market dynamics?

Remember folks, a sleek website and fancy buzzwords don't build infrastructure — but they sure do make for expensive NFTs. 🎨

Market and financial viability

A project can have amazing technology and a stellar team, but without market fit and financial sustainability, it's just an expensive experiment.

Market and financial viability in DePIN goes beyond typical crypto metrics like token price or trading volume. It's about understanding the real-world market dynamics the project is entering, the actual demand for their solution, and most critically, whether their revenue model can sustain both infrastructure growth and token holder value.

This is where Helium's story becomes particularly instructive.

Case study: Helium

While many projects chase theoretical use cases, Helium identified and executed on a clear market opportunity: the growing demand for affordable, flexible wireless infrastructure.

Their success isn't just in the numbers – though adding 20,000 subscribers in December 2023 alone is impressive. It's in their sophisticated approach to solving the chicken-and-egg problem that plagues most DePIN projects.

Their dual-token model (HNT and MOBILE) demonstrates a deep understanding of both crypto and traditional telecom economics. Data Credits being pegged to fiat ensures predictable costs for network users, while the broader tokenomics align network growth with value creation.

This intricate balance between growth incentives and sustainable economics has enabled Helium to build one of the largest decentralized wireless networks globally, with over 1,013,836 hotspots actively contributing to the ecosystem. But what's more telling is their ability to maintain this growth while transitioning from IoT to mobile coverage — proving their model's adaptability to changing market demands.

To sum it all up, here are some things you should be asking yourself when thinking about a project’s market and financial viability:

• Does the project demonstrate understanding of target market size and dynamics through concrete action, not just market research?
• Where's the evidence of actual demand? Look for paying customers, not just pilot programs.
• Does their economic model create sustainable value for all stakeholders, or does it rely on continuous token appreciation?

Having a million Discord members is cool, but you know what's cooler? Actually having paying customers. 💸

Tokenomics and community strength

This is where many DePIN projects falter, but it's also where the strongest projects truly shine.

When we talk about tokenomics and community strength in DePIN, we're examining how well a project balances token distribution, incentive mechanisms, and community engagement to create sustainable network growth.

Strong tokenomics ensure that early contributors aren't overly rewarded at the expense of latecomers, while intelligently designed incentive structures encourage meaningful, long-term participation rather than short-term profit-taking.

The community aspect isn't just about Telegram members or Twitter followers; it's about creating an ecosystem of engaged participants who understand and believe in the project's vision.

Need a better visual? Hivemapper offers a masterclass in balancing tokenomics with community building.

Case study: Hivemapper

With over 39,000 contributors mapping more than 130 million road kilometers, Hivemapper has created a self-reinforcing ecosystem. It exemplifies how thoughtful tokenomics and community engagement create sustainable growth.

Their success lies in understanding that in DePIN, your community (you guys!) isn't just your user base — they're your infrastructure.

Their token distribution model directly links rewards to value creation — contributors earn based on actual map usage, creating a clear connection between network growth and participant benefits. This isn't just about throwing tokens at contributors; it's about creating a sustainable ecosystem where value flows naturally to those who create it.

The project's hardware strategy deserves special attention. By making their dashcams both accessible and profitable for contributors, they've solved one of DePIN's biggest challenges: hardware economics that make sense even in bear markets. Their community isn't just participating; they're invested in long-term success.

To sum it all up, here are some things you should be asking yourself when thinking about a project’s tokenomics and community strength:

• Are token incentives truly aligned across all stakeholders, or do they favor certain groups at the expense of others?
• Does the hardware strategy make economic sense for contributors, or will they need unrealistic token appreciation to break even?
• Is the community actively contributing to network growth, or are they just waiting for the next price pump?

Your tokenomics might look good on paper, but if your community has more bots than a sci-fi convention, we might have a problem. 🤖

Okay, so what now?

Let’s get real for a sec. As the DePIN space matures, the ability to evaluate projects effectively becomes increasingly crucial.

The methodology we've outlined today is just the beginning — a foundation for making smarter, more informed decisions in this rapidly evolving space.

Soon, we'll be unveiling something that will change how you navigate the DePIN landscape. A tool that brings clarity to complexity, helping you identify projects built for long-term success.

Remember, truly successful DePIN projects aren't just about innovative technology or clever tokenomics – they're about creating sustainable ecosystems where all participants benefit. By understanding these key evaluation criteria, you're better positioned to spot the projects that aren't just promising, but built to succeed.

That's 2 blogs marked completed from the series, folks. Stay tuned for our next installment in Decoding DePIN, and keep your eyes peeled – our game-changing initiative is just around the corner.

Trust us; this is a good one. 😉