The Rise of Solana DePIN Projects: A Sustainable Crypto Trend in 2024?

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As the Solana (SOL) blockchain continues to evolve, it sees a new wave of innovation in the surge of decentralized physical infrastructure network (DePIN) projects.

DePINs are networks where anyone can contribute resources such as data storage, connectivity, sensors, or energy and, in return, earn rewards in the form of cryptocurrency. By leveraging blockchain technology, such networks track who provides certain services and ensure transparency and fairness.

While DePIN projects are starting to emerge on various blockchains, Solana has seemingly amassed a big majority, with some of the biggest projects by market capitalization being Render, Helium, and Nosana.

A Flipside report recently revealed that Solana DePIN projects are supporting a wide array of real-world activities and continue to demonstrate potential for more growth, bolstered by Solana’s “unique combination of high-speed transactions, low costs, and robust infrastructure.”

Is the rise of DePIN on Solana a sustainable crypto trend? We asked the experts in the field to give their views.

Key Takeaways

  • Solana’s high-speed transactions, low costs, and robust infrastructure are key factors attracting DePIN projects.
  • DePIN projects on Solana encompass a wide array of applications, including decentralized compute power, connectivity, data storage, IoT integrations, and supply chain management.
  • Major DePIN projects on Solana, such as Helium, Hivemapper, Render, and ShdwDrive, have seen substantial growth in user activity and token burns.
  • Despite the positive outlook, Solana DePIN projects face challenges such as maintaining sustainable token incentives, ensuring continuous community participation, and navigating regulatory complexities.
  • Experts predict that integrating machine learning (ML) and artificial intelligence (AI) could bolster DePIN projects on Solana.

Why DePIN Projects Choose Solana?

Solana is known for its good performance, scalability, and low transaction fees, making the blockchain a great place for projects that may require fast and affordable micro-payments, according to Flipside’s Solana Data Scientist Kellen Blumberg.

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Blumberg told Techopedia:

“Ironically, many of the same network performance benefits that have fuelled Solana’s recent memecoin mania are the very same features that are attracting DePIN projects with real-world utility to Solana, given these projects’ need for fast/cheap performance and scalability, integrated infrastructure, and strong community support.”

Flipside’s analysis of four major Solana DePIN projects, including Helium, Hivemapper, Render, and ShdwDrive, revealed significant surges in user activity and token burns.

The Render Network’s weekly active node operators peaked at 1,900 in January 2024, a 66.3% increase since it migrated to Solana.

Token burns for Helium’s mobile network severely outnumbered those of its Internet of Things (IoT) network, and Hivemapper saw a significant rise in HONEY token burns due to a surge in network activity and enterprise adoption, having mapped over 50 million kilometers in more than 90 countries.

Helium token burns.
Helium token burns. Source: Flipside

Helium token burns. Source: Flipside

The chairman and co-founder of the all-in-one DePIN manager network Hivello, Domenic Carosa, added that DePIN applications that require swift and economical data processing tend to gravitate towards Solana due to the blockchain’s capability to process more than 50,000 transactions per second cost-effectively.

Additionally, Solana’s Proof of History (PoH) consensus mechanism enhances its throughput and efficiency and allows for faster synchronization and confirmation of data across the network, making the blockchain ideal for DePIN projects that demand real-time data availability and high throughput.

Moreover, Flipside’s Blumberg added that Solana’s parallel transaction processing through its Sealevel runtime adds another bonus to DePIN projects as it allows the network to handle multiple smart contract executions simultaneously.

This was evident in how the Render Network has successfully rendered around 33 million frames as of May 22, 2024, a process that would take much more time for a traditional company to complete.

DePIN Use Cases: Decentralized Compute Power, Connectivity & More

Decentralized compute power, connectivity, and data storage are only some of the primary use cases for DePIN crypto projects emerging on the Solana network.

Flipside’s Blumberg told Techopedia:

“These projects utilize a decentralized model that leverages community participation, reducing dependence on centralized entities. This approach has the potential to provide high-quality on-demand services, reduce costs, and increase security compared to traditional infrastructure solutions – especially as they scale. For instance, Hivemapper uses a drive-to-earn model to create a decentralized mapping network, offering a collectively-owned alternative to traditional mapping services like Google Maps.”

Solana DePIN coins could also be the next big crypto trend following a surge in HONEY tokens burned between April and May that illustrates a rise in customer demand for Hivemapper.

Amount of HONEY tokens mint and burned.
Amount of HONEY tokens mint and burned. Source: Flipside

Amount of HONEY tokens mint and burned. Source: Flipside

Additionally to decentralized compute power, connectivity, and data storage, DePIN projects on Solana offer groundbreaking use cases in IoT integrations and complex supply chain management systems, Hivello’s Carosa added.

Solana DePIN Projects Continue to Face Challenges

Despite a positive outlook so far, Solana DePIN projects continue to face certain challenges, including maintaining sustainable token incentives to keep users engaged, ensuring continuous community participation, and navigating complex regulatory landscapes.

For example, the surge in burned HONEY tokens could be a “lumpier” process week to week due to the product’s B2B nature, the Flipside report revealed.

Moreover, Hivello’s Carosa noted that ensuring network reliability and stability amidst high throughput could be another challenge that DePIN Solana projects face.

“As transaction volume increases, maintaining the performance without any lag or downtime becomes crucial. Additionally, as with any decentralized platform, ensuring security against potential attacks while maintaining openness and accessibility remains a critical challenge.”

Tim Kravchunovsky, the founder and CEO of the Chirp DePIN Platform, added that establishing a reliable, carrier-grade network could also be a potential challenge since relying on community-owned infrastructure can make DePIN projects less stable, at least until they achieve wider scale and adoption.

“While Solana has seen a great deal of DePIN development, it’s not the only blockchain that is vying for a spot as the leading home of DePIN … When we were choosing an L1 blockchain to build on, we decided against Solana due to its instability, with outages continuing to plague the network.

“We’ve also recently seen congestion, which threatens Solana’s position as an ultra-low-cost, ultra-fast blockchain. We chose Sui instead because, in our view, these qualities are better represented here.”

Machine Learning & Artificial Intelligence to Bolster Solana DePIN projects

Experts are predicting, however, that both machine learning and artificial intelligence applications do have the potential to bolster DePIN projects on Solana in the near future and could lead to heightened interest within and beyond the Web3 space.

“Based on our assessment of the most active sectors of Solana’s DePIN ecosystem, it appears that investment in, and adoption of, decentralized compute solutions will likely outpace other DePIN sectors as global GPU demand continues to outstrip supply, especially since these DePIN projects are designed to service all types of GPU users, not just Web3 projects,” Flipside’s Blumberg noted.

Hivello’s Carosa agreed, highlighting that an emerging trend to look out for is the integration of ML models directly on the blockchain that enable smarter, self-optimizing systems.

Moreover, Carosa noted that Hivello itself is getting ready to launch very soon on the Solana ecosystem, boosted by a promising future and the potential for expansive growth in decentralized finance (DeFi), Web3 applications, and beyond.

The Bottom Line

The rise of DePIN projects on Solana signifies a groundbreaking shift in how we manage and distribute physical infrastructure.

Leveraging Solana’s high-speed, low-cost, and robust infrastructure, DePINs are democratizing access to essential services while ensuring transparency and fairness through blockchain technology. Major projects like Helium, Hivemapper, Render, and ShdwDrive showcase the practical and expansive applications of DePINs, driving significant growth in user activity and adoption. However, challenges such as maintaining sustainable incentives, ensuring network reliability, and facing competitive pressures from other blockchains remain.

As Solana continues to attract innovative DePIN projects, the integration of AI and machine learning promises to enhance their capabilities and scalability, positioning Solana at the forefront of decentralized infrastructure solutions.

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Iliana Mavrou
Crypto journalist
Iliana Mavrou
Crypto journalist

Iliana is an experienced crypto/tech journalist reporting on blockchain, regulation, DeFi, and Web3 industries. Before joining Techopedia, she contributed to a number of online publications, including Capital.com, Cryptonews, and Business2Community, among others. In addition to working in journalism, she also has experience in tech and crypto PR.  Iliana graduated from the City University of London with a degree in Journalism in 2021. She is currently pursuing a Master's degree in Communication.