Introduction

DePIN is breaking boundaries unprecedentedly, closely integrating blockchain with the physical world. However, as market trends shifted, its popularity temporarily cooled. Recently, with the rapid rise of AI, the “AI + DePIN” narrative has reignited investment enthusiasm in this sector, providing a new growth engine for the convergence of blockchain and AI.

Amid this trend, bandwidth-sharing DePIN projects have emerged as a key sub-sector. By combining users’ idle network bandwidth with blockchain-based incentive mechanisms, these projects provide efficient support for distributed AI model training and play a unique role in democratizing network infrastructure. This article will analyze the revenue models of bandwidth-sharing DePIN, examining representative projects, profit-sharing mechanisms, and miners’ actual earnings to provide valuable insights for participants interested in this field.

Since 2024, the DePIN sector has experienced rapid growth (Image source: messari.io/report)

What is DePIN?

In its 2023 industry report, The DePIN Sector Map, leading research firm Messari introduced the concept of DePIN (Decentralized Physical Infrastructure Networks), defining it as “the use of cryptographic protocols to deploy real-world physical infrastructure.” At its core, DePIN revolves around ownership confirmation and network scale effects. DePIN provides services for various sectors, including wireless networks, energy systems, artificial intelligence, and storage by integrating globally distributed digital resources with algorithmic models and adjusted production relationships. Several key considerations underpin the DePIN model:

First, decentralization effectively prevents single points of failure. By utilizing consensus algorithms for collective data validation and transmission, DePIN eliminates reliance on centralized servers. Additionally, those who deploy these networks receive crypto-based rewards, significantly enhancing network robustness.

Second, in traditional models, the cost of building and maintaining physical infrastructure falls entirely on corporations or governments, with profits limited to service providers. The DePIN model allows users to participate in network operations by purchasing hardware (e.g., mining rigs), while companies distribute rewards to these users and leverage their resources to complete tasks. This reduces initial capital expenditure for businesses and creates a more flexible revenue model.

Finally, DePIN aggregates globally distributed idle resources, such as computing power, storage, and bandwidth. Users are rewarded with tokens based on the quantity and quality of their contributed resources, thereby fostering a large-scale resource-sharing network.

DePIN concept formation timeline (Image source: iotex.io/blog)

Currently, DePIN projects can be broadly categorized into two types: Physical Resource Networks (PRNs) and Digital Resource Networks (DRNs). These classifications are based on the type of resources they utilize, representing decentralized applications for physical infrastructure and digital resource sharing.

PRNs are decentralized networks based on geographic locations, where contributors provide non-fungible hardware resources related to connectivity, mobility, or energy, such as charging stations, IoT devices, or wireless network base stations. These networks emphasize the regional service capabilities of physical infrastructure. In contrast, DRNs consist of decentralized networks built on standardized digital resources like computing power, shared bandwidth, or storage. These resources are interchangeable, unrestricted by geographical location, and focus on optimizing digital resource allocation.

DePIN project applications are generally divided into physical resource networks and digital resource networks (Image source: x)

Among the various DRN subcategories, bandwidth-sharing DePIN is a particularly representative and rapidly growing sector. By enabling the decentralized sharing of bandwidth resources, these projects significantly improve the efficiency of internet resource utilization while creating new revenue models for users. The following sections will explore the key features and real-world applications of bandwidth-sharing DePIN.

What is Bandwidth-Sharing DePIN?

Bandwidth-sharing DePIN refers to a decentralized bandwidth network model, where the core goal is to incentivize private providers to share their idle network bandwidth resources, leading to an overall improvement in network efficiency and a significant reduction in transmission costs. This model relies on a distributed architecture, redefining the traditional centralized supply and demand relationship of internet bandwidth resources into a decentralized, shared network system.

Compared to traditional centralized network models, bandwidth-sharing DePIN enables the dynamic expansion and optimization of network infrastructure and actively engages global users in resource participation. Idle bandwidth resources are efficiently integrated and utilized, and a new Web3 revenue model is created through token incentives, promoting the democratization and sharing of internet resource allocation.

Bandwidth-sharing DePIN is like optimizing traffic flow on a highway (Image source: Bandwidth sharing)

Core features include:

a. Decentralization: Unlike traditional centralized Content Delivery Networks (CDN), bandwidth-sharing DePIN adopts a decentralized approach, distributing transmission tasks to nodes worldwide. This reduces reliance on central servers and increases network resilience.

b. Incentive Mechanism: By introducing a token incentive mechanism, individuals and organizations are encouraged to share their idle bandwidth resources. Contributors are rewarded with tokens based on the quantity and quality of the bandwidth provided, creating a positive incentive loop.

c. Resource Integration: It aggregates unused or inefficiently used bandwidth resources globally, selects optimal transmission paths, avoids traffic congestion or detours in traditional centralized networks, and reduces network latency, offering a smoother user experience.

Traffic lights as network nodes, vehicles representing data flow (Image source: researchgate.net/figure)

On a basic level, bandwidth-sharing DePIN can be understood as “mining with devices.” Users contribute idle bandwidth resources (such as home broadband or unused traffic from data centers) to join the project network and receive token rewards. The earlier users participate and contribute bandwidth, the faster they receive project tokens and can cash out. This model attracts users looking to earn short-term profits through “mining and selling.”

On a deeper level, the value of bandwidth-sharing DePIN is not just in providing short-term rewards to users but in using decentralization to collect and integrate idle bandwidth resources, reshaping internet infrastructure. Token rewards for users serve as incentives for this contribution model, ensuring the network attracts enough nodes to participate. This is essentially a form of distributed “dynamic optimization” on the network.

Two interpretations of the DePIN concept (Image source: techflowpost.com)

The “Flywheel” Revenue Model

DePIN’s revenue model is a self-reinforcing closed-loop structure, with the core being the continuous expansion of the supply side driven by token incentive mechanisms. In contrast, income growth is driven by meeting user demand. This model can be seen as a dynamic, positive cycle economic ecosystem revolving around the DePIN network protocol, where each link drives the development of the next stage.

The core logic of this model can also be simplified into a clear chain, namely: users have the right to produce data → devices produce data → transfer data ownership to the network → create value for data demanders → users receive economic incentives.

Specifically, the project party provides technical support to sustain and maintain the operation of DApps and user access; investors support the DePIN protocol launch with early capital. As the network gradually expands, the growth in token value will incentivize miners to contribute production capital, such as bandwidth, storage devices, or computing power, facilitating the supply-demand matching of decentralized resources; at the same time, users inject actual value into the network by paying or sharing resources, further enhancing the economic return of the network and community stickiness. On this basis, as community activity increases, the network value continues to amplify, attracting more capital, developers, and participants to join the ecosystem, forming a rolling revenue growth.

Main participants of the DePIN project (Image source: iotex.io/blog)

Similarly, bandwidth-sharing DePIN incentivizes users to contribute idle bandwidth resources rather than using them solely for personal use, bypassing the high costs of traditional centralized content distribution platforms. This enables efficient content distribution, reduces operational costs for video platforms, and even provides localized, low-latency bandwidth support for edge computing scenarios, improving network response speeds.

Taking decentralized content distribution networks (CDN) as an example, when users need faster content loading services, smart contracts will automatically call the nearest and most optimal bandwidth nodes based on the current network load, optimizing the data transmission path, reducing latency, and improving service quality. Once the service task is completed, users who contribute bandwidth immediately receive corresponding rewards through the token incentive mechanism. In contrast, users who pay service fees enjoy a fast content-loading experience, with both supply and demand sides jointly driving the growth of network value.

DePIN Flywheel’s Revenue Growth Strategy (Image source: feixiaohao.com)

However, this revenue model also has its unique challenges, namely, how to effectively initiate the first step of the flywheel? Essentially, the flywheel effect of DePIN relies on the continuous development of the network, which is directly reflected in the willingness of resource providers to participate in the network. However, in the early stages, only a few blockchain enthusiasts may show interest in participating in such projects, which could lead to a scarcity of bandwidth resource providers.

Therefore, to attract providers, DePIN should ensure that the token incentives cover the providers’ operating costs and offer them substantial profit potential, effectively activating network growth in the early stages and gradually achieving self-reinforcement of the ecosystem.

Representative Project Listing

Grass

Project Introduction

Grass is the first project deployed on Solana that combines AI, DePIN, and Solana technologies. Users convert unstructured network data into structured datasets to meet AI application needs by running nodes and the Sovereign Data Rollup aggregation component.

Regarding ecosystem expansion, the Grass project has integrated with Solana Phone – Saga for mobile integration and has established deep collaboration with Alignment Lab AI. The core philosophy of the Grass project is to leverage decentralized networks to collect and process vast amounts of data, aiding AI models in more accurate training while continuously exploring the potential advantages of decentralized data in large model training.

Grass Logo (Image source: depinscan.io)

Official Website

https://www.getgrass.io/

Funding Information

According to ROOTDATA, Grass has completed two funding rounds, totaling $4.5 million.

The first round of Pre-Seed funding was completed in July 2023, amounting to $1 million, with notable investors such as No Limit Holdings, Big Brain Holdings, and other well-known venture capital firms.

The second Seed funding round was completed in December 2023, totaling $3.5 million, led by Polychain Capital and Tribe Capital. This series of funding has laid a solid foundation for Grass’s technological development and market promotion.

In September 2024, Grass officially announced the completion of Series A funding, led by Hack VC, with participants including Polychain, Delphi Digital, and Lattice Fund. This funding round marks another significant milestone in Grass’s journey of redefining internet incentives, providing solid financial support for the project’s further development and global expansion.

In October 2024, Grass successfully launched on exchanges, and its token, $GRASS, officially entered market circulation.

Grass Project Funding Information (Image source: Rootdata)

Key Features of Grass

1. Incentive Mechanism: Users running Grass nodes and contributing idle network resources can earn GRASS tokens as rewards, generating passive income. This incentive mechanism encourages more users to participate in network data collection and processing.

2. Extensive Node Network: As of now, Grass nodes are spread across 190 countries, with over 2.5 million nodes, capturing more than 100TB of data daily, demonstrating the extensive reach and data collection capability of its network.

3. Data Security: The Grass protocol manages the entire initial data collection, processing, and validation process, utilizing zero-knowledge transmission layer security protocols (ZK TLS), proof generation for Web requests, Web session records, and decentralized databases for hash storage and anti-data poisoning measures. This ensures identity and data integrity verification without exposing privacy.

4. Multi-Solution Storage: Grass employs multiple storage solutions, using a data ledger for hash storage, combined with a Merkle tree bundling system and on-chain root hash publishing, creating an efficient and secure data verification and storage mechanism.

5. Efficient Data Processing: The protocol uses an HTML to JSON conversion system, custom Python cleaning scripts, data structure tools, and vectorization processes while also developing embedded models for edge processing.

Grass Project Data Processing Process (Image source: Grass Docs)

Token Economics

Grass’s native token, $GRASS, has a fixed total supply of 1 billion tokens. The token distribution plan focuses on fairness and long-term incentives, prioritizing early community development and network infrastructure. Below is the detailed token distribution plan:

Grass Token Distribution Plan and Release Schedule (Image source: Grass-tokenomics)

• Community Allocation (30%)

● Future Incentives (17%)
Future incentives will focus on a retroactive reward program to recognize early contributors and compensate developers who create valuable content or tools for the network, stimulating community activity.

● Router Rewards (3%)
An initial reward pool is reserved to incentivize routers and support early infrastructure development. This pool will help ensure that routers facilitating bandwidth traffic and reducing latency are appropriately incentivized until the network matures and can sustain itself through network fees.

● Airdrop (10%)
Aimed at achieving widespread user coverage, laying the foundation for a user-driven internet map.

• Foundation and Ecosystem (22.8%)
  Foundation tokens are managed by the Grass Foundation, while the ecosystem allocation will promote community and growth plans, including network upgrades, partnerships, and R&D. Additionally, these tokens will serve as reserves for future DAO governance.

• Early Investors (25.2%)
  Tokens allocated to early investors, with a 1-year lockup period and a 1-year linear release period. These tokens cannot be staked before the vesting period is completed.

• Ecosystem Contributors (22%)
  Core contributors, including current and future team members, will receive allocations to ensure continuous team involvement in the project.

Revenue Sharing Mechanism

The Grass project provides a mechanism for earning passive income through users sharing idle network bandwidth. By installing a browser extension and contributing unused internet bandwidth, users allow Grass to utilize these resources for web scraping and data processing.

In return, users will earn Grass Points, which may be converted into network ownership or other rewards after the test period ends. Grass has also introduced a tiered reward system, where users can level up based on their contributions, increasing their earnings.

Additionally, the project has referral bonuses, where users can earn extra income by inviting others to participate.

Miner’s Real Earnings

On October 28, 2024, the $GRASS token was distributed to early adopters and supporters through the first airdrop (Airdrop ONE), providing substantial reward opportunities. According to community feedback, a single Windows device successfully doubled mining earnings during the first mining activity with the invitation mechanism and exclusive strategies for early users.

For example, one miner ran nodes 24/7 on two PCs with different IP addresses, earning 2050.93 $GRASS tokens on the distribution day. Based on the market price of $1.5 at that time, the miner’s total annual earnings amounted to $3,076.4, demonstrating the high-return potential of participating in Grass’s mining activities.

Grass First Phase Single Windows Device Mining Effect (Image source: Grass Launch)

OpenLoop

Project Introduction

OpenLoop is a decentralized wireless network founded in 2024. It aims to enhance internet service delivery and improve efficiency and accessibility by building a network ecosystem based on unused bandwidth. At the same time, it strives to create a scalable and secure digital ecosystem. The project leverages Solana blockchain technology, combining user-driven data sharing with decentralized networks, allowing individuals to convert idle internet bandwidth into a powerful global network.

OpenLoop Project Official Website (Image source: OpenLoop Network)

Official Website

OpenLoop Network

Funding Information

On December 12, 2024, OpenLoop successfully raised $15 million in a funding round led by the IPN Foundation.

The IPN Foundation, a well-known venture capital firm focused on driving the development of AI and DePIN technologies, is renowned for supporting forward-thinking and disruptive innovators. Its participation injected significant momentum into OpenLoop’s development.

Through this round of funding, OpenLoop will further advance the construction of decentralized wireless networks, providing more innovative solutions for global connectivity and data privacy, and laying the foundation for empowering individuals to control their data rights.

OpenLoop Latest Funding Update (Image source: substack.com)

Main Features

1. Frequency Proof. OpenLoop uses an advanced backhaul verification mechanism to prove user contributions securely.

2. Reward System. Users earn rewards by sharing bandwidth in the form of OpenLoop points or tokens. These rewards can be directly converted into real value, turning users’ internet connection resources into passive income sources.

3. AI Development Support. The project network runs via the OpenLoop Sentry Node Extension, aiming to support AI companies and other large-scale data processing enterprises, efficiently and securely handling massive data sets.

4. AI-Driven Operations. By applying advanced machine learning (ML) algorithms and predictive analytics, the network can autonomously adjust its operations to optimize resource allocation, traffic management, and network reliability, continually adapting to and optimizing its cyclic network.

Token Economics

OpenLoop’s native token, $OPL, has a fixed total supply of 1 billion tokens. The distribution strategy balances ecosystem development with user incentives, ensuring both the operational needs of the project and strong support for network decentralization and continued growth. Meanwhile, the user incentive mechanism strengthens its innovative position in decentralized AI and bandwidth sharing. The specific allocation is as follows:

● Node Validators (40%): Used to incentivize node validators in the network, attracting more participants to join the ecosystem.

● Ecosystem Growth (25%): Used for the expansion and innovative development of network infrastructure, providing support for the project’s long-term development.

● Marketing (15%): Used to increase the project’s market visibility and user participation, accelerating the adoption of applications.

● Community (12%): Incentivizing community users and enhancing community vitality and engagement through diverse activities.

● Team (8%): Incentivizing core developers and providing stable support for the development and maintenance of DApps.

Revenue Sharing Mechanism

According to official documents, OpenLoop introduces a point reward mechanism to incentivize users to participate in network node operations and ecosystem expansion.

Users’ revenue sharing in the OpenLoop network is primarily based on node contributions and referral rewards earned through points, each representing the user’s direct impact on building the future internet ecosystem and advancing AI development. Specifically, this includes the following:

● Node Operation Rewards
The OpenLoop network consists of 25,500 limited nodes. Users contribute their idle bandwidth to the network and receive reward points. The points calculation directly reflects the quality and contribution of the node’s operation, where stability and efficiency are key factors in earning high points.

● Validator Governance and Airdrop Rewards
Validators are vital in network governance, controlling 40% of $OPL governance rights and supporting the network’s future direction. In return, validators not only enjoy passive rewards but can also receive exclusive airdrop benefits. As planned, $OPL tokens are expected to be listed in Q1 2025, and validators will receive priority for exclusive airdrops, providing additional incentives for their long-term support of the network.

● Referral Rewards
Users who refer others to join the OpenLoop network can receive additional points as rewards. This mechanism encourages users to expand network coverage while accelerating the ecosystem development of OpenLoop.

It is important to note that OpenLoop is still under development, and the revenue-sharing mechanism may be adjusted as the project progresses. Users are advised to stay updated on official documents and announcements to get the latest details on the revenue distribution mechanism.

OpenLoop Node Tiering and Reward Explanation (Image source: Limited Tiers & Benefits | OpenLoop Network Docs)

Miner’s Real Earnings

According to a case shared by the community, a miner shared network bandwidth to run an OpenLoop node. The miner’s node connection quality score was 69, indicating that their network connection performance was average. During the node operation, the miner accumulated 2,240.34 points, with a daily average earning of 13.42 points. A single node could earn around 402.6 points per month based on the estimated daily earnings.

Regarding the market value of points, the miner’s monthly earnings would be approximately $340. This case reflects the feasibility of earning passive income through sharing network resources in the OpenLoop system, considering the impact of node operation efficiency on earnings fluctuations.

OpenLoop Miner’s Real Earnings Share (Image source: youtube.com/)

Future Outlook

At present, DePIN is still in its early stages of development, with its market share in the trillion-dollar end market being less than 0.1%. Its growth point lies in providing foundational support for the contribution of public data. So, which industries are most dependent on large-scale public data? Naturally, AI model training. Take the widely known GPT as an example; behind its outstanding performance is the result of OpenAI collecting vast amounts of public data through crawlers for training. On the other hand, DePIN projects, with low entry barriers, low equipment costs, and minimal technical restrictions, are the ideal solution for this demand. Theoretically, the more IP resources accumulated by DePIN projects, the more significant their contribution to AI training data.

Clearly, bandwidth-sharing DePIN projects, as core participants at the hardware layer, have huge growth potential at the intersection of the two major narratives of “decentralized infrastructure” and “AI data empowerment.” This concept is reflected in the representative project Grass, as stated by the CTO of Grass’ parent company, Wynd Network, Nguyen: “We hope to make public network data more accessible to open-source AI projects, and decentralization is the only way to achieve this goal in an ethical and efficient manner.”

DePIN is still in its early stages, with a market share of less than 0.1% (Image source: https://foresightnews)

In the future, bandwidth-sharing DePIN projects are expected to continue to be a key bridge connecting physical infrastructure with the AI ecosystem. Their role will not only be limited to data collection and storage but will also deeply embed themselves into the core aspects of AI model training, becoming a crucial infrastructure driving AI technology development. Notably, bandwidth-sharing DePIN’s potential goes beyond just the AI industry. With the rapid development of the Internet of Things (IoT), edge computing, and Web3 applications, such projects are expected to provide efficient, low-cost distributed solutions for other data-intensive industries, further expanding the innovative prospects of decentralized bandwidth sharing.

Conclusion

The rise of blockchain technology has brought disruptive innovation to numerous industries, from decentralized finance (DeFi) in the financial sector to the play-to-earn (P2E) model in gaming, and generative NFTs and trustless identity verification in the art field. However, in this wave of Web3 empowerment, changes in the physical infrastructure sector have been relatively slow. Capital-intensive enterprises have long dominated traditional physical infrastructures like wireless networks, cloud services, and mobile networks, leading to limited innovation and shortfalls in the long-standing consumer experience.

DePIN, through a community-based model, achieves the democratization of both software and hardware infrastructure, representing the next stage of development in commercial-grade network resource allocation and management. Decentralizing the control of resources to user groups forms an industrial-level DAO for fair distribution of bandwidth resources, with some existing projects already proving its feasibility.

It is important to note that, despite the significant potential demonstrated by DePIN projects, these systems are still in their early stages of development. Potential issues have not fully emerged, and the rapid evolution of technology may lead to discrepancies between user expectations and actual performance. Therefore, it is recommended that providers and users conduct thorough personal research and fully understand the potential risks when participating in such projects.