Messari talks to Starpower: DePIN's Bull Market Outlook

Author: Starpower

In a recent ‘DePIN Power’ podcast, Laser, co-founder of Starpower, and Dylan, a researcher at Messari, had an in-depth conversation discussing the application and future development of DePIN (Decentralized Physical Network) in the energy sector. Dylan is one of the top experts in the DePIN and RWA (Real World Assets) fields. He shared the latest trends in the cryptocurrency market and expressed optimistic prospects for DePIN as a potential leader in the next Bull Market. Laser introduced Starpower’s progress in energy DePIN and discussed the importance of the blockchain platform in promoting the DePIN ecosystem. This conversation delves into the key issues of energy DePIN, global market opportunities, and the considerations behind technology selection, bringing new insights into the combination of encryption and the energy industry.

The audio recording and translation are generated by GPT, so there may be some errors. Please listen to the complete podcast:

Starpower Youtube：

Opening and Guest Introduction

Laser invites Dylan to participate in the podcast, introducing the background of the Starpower project and the popularity of DePIN. Dylan introduces his work at Messari and past experience.

Laser

It’s a great pleasure to have you here today, Dylan. You can be said to be one of the top experts in the DEP field, always bringing a lot of profound insights. It’s my honor to have you here today. Let me briefly introduce our situation here.

I am a co-founder of Starpower. We are a DEP project in the energy field. Currently, in terms of equipment activation, we should be the largest energy DEP project at present. Today we want to host some podcasts around the theme of DEP.

We are very interested in learning about your personal background and what prompted you to join Messari. We would also like to hear your recent views on this industry. It can be said that this field is currently very popular.

Dylan

Thank you for inviting me. I am a research analyst at Messari. I am mainly responsible for DePIN, as well as the infrastructure of RWA (Real World Assets), and some AI-related content. This is the work content of our corporate team.

Regarding my background, I used to work at T. Rowe Price, a large asset management company in the United States, as a member of their digital asset team. I assisted in developing their tokenization strategy and also participated in some of their early investment prospects, mainly focusing on mainstream encryption assets, but also including how to integrate these strategies into their multi-asset department. I have also worked in the field of encryption venture capital before. During my time in college (Princeton), I co-founded a blockchain club and have been involved in various projects over the past 5 to 7 years. In the early days, I also participated in a real estate tokenization startup project, attempting to tokenize houses by dividing them into shares for leasing purposes.

Now I mainly follow DePIN, which is definitely one of the hottest zones in the encryption field. I also think it’s the most interesting in terms of knowledge.

Current encryption crypto market dynamics

Dylan shared market dynamics brought by Trump’s election, such as Cryptocurrency Bull Market and DeFi revival.

Laser

Great, great. It sounds like you’ve been involved in the blockchain industry since your college days. I also saw in your profile that you founded blockchain-related organizations during your college years, then entered the venture capital field, and finally joined Messari. Messari is definitely the top research institution in this industry. So your experience is very rich, from academic to non-research fields. Based on your experience, the encryption industry has been very hot recently. Have you seen any new trends or interesting things? Of course, DePIN is one of them.

Dylan

Yes, I think the biggest news right now is the election. Trump won the election, which triggered a bull run in the cryptocurrency and stock markets, and even broader market sentiment was affected. This is largely due to Trump’s support for cryptocurrency. He promised measures such as establishing a strategic BTC reserve for the United States and ending the SEC’s crackdown on the encryption industry. He also mentioned releasing Silk Road founder Ross Ulbricht and overall supports cryptocurrency. This has triggered a wave of BTC-dominated bull markets, and recently BTC has exceeded $90,000, reaching $93,000 at the time of recording this conversation.

Other markets are also following this wave of gains, such as Decentralized Finance performing very well, with some even calling it the ‘Decentralized Finance revival.’ Derivatives platforms like Hyper Liquid are very popular, and may soon release Tokens, along with Jupiter and Raydium also showing outstanding performance. In terms of infrastructure, projects like Solana, Avalanche, and even the underperforming Ethereum have all rebounded. DEP is also performing well, such as Helium and other public Token projects like io.net and Xnet, all showing good performance in the past week. Overall, the sentiment in the crypto market is very positive. Additionally, the Federal Reserve plans to cut interest rates in December, combined with an overall improving economic environment, making the market more optimistic. This is the current overall situation.

The potential of DePIN as a leader in the bull run

Laser mentioned the possibility of DePIN being a leader in the Bull Market, and Dylan analyzed the current situation in the DePIN field and its potential future impact.

Laser

Yes, I think the entire encryption industry has indeed been greatly boosted after Trump was elected, and we have also reached a historical high. As for the specific zone of the encryption industry, I found that DEP - although I may have some bias personally - may become the leader of this bull run. I would like to hear your thoughts, is DEP possible to lead this bull run, or become one of the hottest narratives in the bull run?

I remember when we first founded Starpower two years ago, very few people knew about DEP, especially since our team is based in Australia and East Asia, and hardly anyone was talking about it at the time. But after two years, this topic has become increasingly popular. I’m really interested to hear your thoughts on the DEP industry, whether it has the potential to become the leader of this bull run, and what its long-term prospects are.

Dylan

Of course. The DEP field has achieved a lot of success in the past year. The initial funding has risen by more than 500% compared to the previous year, and the performance of public tokens is also similar. If we only compare the third quarter, the funding rise is close to 700%. We can see that the interest of investors in DEP has increased significantly, whether in the early private market or the public market. Currently, there are many exciting DEP protocols emerging, covering areas such as energy and wireless communication, such as GEONET’s RTK base station, the CDN network of Broadcast and Pipe, and GPU computing networks. There are new projects appearing almost every week. These DEP projects are solving very big problems and facing a vast expandable market. I believe this will make DEP a leader in this market cycle and even in the next few years.

However, at present, there are not many public Tokens for DEP. Many of the most promising protocols are still in the Testnet stage or early stage. These projects are more focused on the construction of business, Tokenomics, and game theory, rather than rushing to launch Tokens. I think this is a good thing. The biggest advantage of DEP lies in its creation of real-world value through encryption technology and the construction of real business. I think this kind of value creation is something that other industries cannot achieve. So, in terms of the narrative about DEP, such as the already released Tokens like Render, io.net, Helium, I think they will perform very well in this round of the market. And once those early protocols launch Tokens and consolidate their business, DEP will experience a major outbreak, possibly becoming one of the largest, if not the largest, zones in the encryption industry in the next 5 to 10 years.

The importance of the energy sector in DEP in DePIN (00:09:41 - 00:12:30)

The two sides discussed the huge potential of DEP in the field of energy, especially in the deployment of solar panels, virtual power plants, and demand response.

Laser

Yes, recently we saw the Token of Grass go live, and it performed very well. I feel that DePIN will be very hot in the next three to six months.

Okay, let’s get back to the topic of energy. We’ve talked to some people in the DEP field before, and some of them are very optimistic about energy-related DEP projects. In the past six months, three to five energy-related DEP projects have raised over $10 million in funding from institutions such as a16z, USV, Multicoin, etc. We have also secured funding from Alliance. I think it’s hard to find another DEP field with such momentum recently. What do you think about this?

Dylan

Yes, I do think energy is indeed one of the most exciting subfields of this cycle. This is mainly because the opportunities in this field are enormous. First, the world is striving to transition to cleaner energy, with many governments attempting to reduce carbon dioxide emissions. And clean energy, such as solar and wind power, is the best way to achieve this goal. Currently, solar energy is the cheapest source of energy worldwide, and DEP might be the best way to incentivize solar panel installation and expansion, at least in terms of capital efficiency. This is a huge opportunity, and top-tier venture capitalists have already recognized this.

In addition, there are many issues with integrating solar panels and distributed energy resources into the grid. Coordinating these resources is a huge challenge, and virtual power plants and demand response programs can address real-time data issues and help in the modernization of the grid. Therefore, incentivizing new solar deployments is a huge market. Analysts expect that in the United States alone, trillions of dollars are needed annually to upgrade the grid to accommodate renewable energy. And DEP can address a large part of this problem, which is very meaningful. That’s why there are so many opportunities in this field and why it’s so exciting.

I believe energy is one of the most significant narratives in this cycle. The wireless sector has also performed well, such as Helium, which recently achieved an eight-figure annualized income, and DAWN and XNET, which have also performed well. Of course, these are also trillion-dollar issues, but energy is a matter of survival and may be the world’s largest market. If DEP can make a difference in the energy sector, at any level, it would be a huge breakthrough.

Differences between different DePIN protocols (00:12:44 - 00:17:13)

Dylan analyzed three main issues and directions in the energy DePIN project: incentivizing solar deployment, integrating distributed energy resources, and marketization of real-world assets.

Laser

Yes. I think another reason why energy DEP is becoming a hot area is its close relationship with AI. Marc and Ben recently discussed the issue of AI and energy again. On the one hand, it is due to the congestion caused by the increase in computing demand, and on the other hand, it is the congestion of the U.S. electricity grid system, as well as the accelerated installation speed of solar panels. It’s like an “Unholy Trinity”, solving this problem is a huge challenge. Ensuring sustainable power supply and sustainable development of AI are big issues. So, energy DEP is like the “Twin Brother” of AI.

In addition, I would like to ask, energy is a very large field. You must have in-depth research on this field. Currently, there are many projects in this field. From your perspective, what are the differences between these projects? For example, one project follows this question, while another project follows another question. What are the reasons and differences behind them?

Dylan

Yes, I think every protocol in the energy field is unique. Some protocols do address the same issues, while others address multiple issues. So it’s difficult to categorize all protocols into one group. But I think the three biggest issues at the moment are:

The first is to incentivize the deployment and installation of solar panels and solar power plants. Through Token rewards, people are encouraged to overcome the barriers to installing solar energy, whether it is rooftop solar, solar power plants, or purchasing and connecting clean energy-related equipment such as batteries or electric vehicle charging stations. I think this is an important area, and Starpower is also doing this to some extent, and there are some other projects in the United States that are doing similar things.

The second major issue is coordination. That is, integrating distributed energy resources (DER) into the grid. I believe that blockchain is the best way to solve this problem because it provides verifiable on-chain data and can connect to the DeFi blockchain network. The composability of blockchain allows it to collaborate with many applications to improve energy coordination efficiency. At the same time, it can incentivize users to share their data and even transfer their energy control to virtual power plant operators. These operators can create cost savings for the grid, which will be passed on to the users.

The third major issue is the marketization of real-world assets (RWA), such as investing in solar energy projects. These take the form of tokenized equity, through which investors can gain returns and profits from their investments, all fully on-chain. This creates more liquidity for these assets, as their liquidity is very low in traditional markets. For example, investing in a solar power plant or wind turbine is very difficult in traditional markets. However, blockchain can provide a platform for tokenization and trading for these assets through its built-in Decentralized Finance market and network.

I believe these issues are closely related to each other, so many companies are working in these cross-cutting fields. At the same time, some companies are trying to conduct peer-to-peer energy trading, which is a very complex issue and is still in its early stages and conceptual stages. So, I would categorize these issues into three categories, and each protocol is solving these issues in its own way, sometimes they solve all the problems at the same time.

Geographical areas and the focus of DePIN protocol (00:17:25 - 00:18:47)

The two sides discussed the focus of different DePIN protocols in different geographical areas, as well as the potential for global expansion of these protocols.

Laser

Yes, I think different protocols follow different geographical regions.

Dylan

Yes, that’s absolutely correct. I think, for example, Daylight is entirely focused on the United States, while FUSE is currently entirely focused on Europe. There are also some projects that follow the Asian market, while others are global or intend to build a global virtual power plant. So, different protocols have different approaches and geographical divisions. Meanwhile, due to the massive scale of the energy market (5 to 10 trillion dollars), I don’t think there is too much substantive competition between these protocols at present, but rather competition with Web2 and traditional solutions.

Laser

Yes, the space in this field is enormous. If we put all the Web3 energy DePIN projects in one room, we might not even be able to see each other, because there are so many things in this field.

Dylan

Totally agree, totally agree.

The performance of different Block chain platforms in the DePIN ecosystem (00:18:51 - 00:23:23)

Laser and Dylan discussed the deployment differences of the DePIN project on Solana, EVM, and other on-chain Blocks. Dylan analyzed the reasons why Solana is popular in the DePIN project.

Laser

I have another question. DEP is definitely one of the hottest narratives right now. We see many Layer 1 or Layer 2 blockchains pushing their DEP ecosystems, with Solana being the best performer. We are also building on Solana.

After researching so many DEP projects, what do you think? Some projects are built on EVM, some on Solana, and some on IoTeX and Polygon. From a technical or economic point of view, what are the differences between them?

Dylan

yes, I think one of the interesting things about DePIN is that it’s finally solving a real problem. This is a real-world application scenario. I think most of the underlying blockchains, whether it’s Solana, Polygon, or ETH Square, are able to support DePIN. However, we do see a lot of protocols choosing to build on Solana or migrate to Solana. I think one of the reasons is that Solana has been very focused on being an easy-to-use Layer 1 blockchain over the past few years, with very low Money Laundering and high transaction volumes. This is very attractive to DePIN projects, as they don’t want to face network congestion like ETH Square, and they don’t want to struggle to understand the experimental nature of Layer 2 or the splitting of Liquidity. So Solana naturally became the default choice. Solana’s team has also done a great job of promoting and supporting the DePIN project. In the eyes of many DePIN projects, Solana is a relatively safe platform to build on because it has fewer Layer 2 experiments. As for purely theoretical discussions about the degree of Decentralization, or the “Twitter debate” between Solana and ETH, these are not important to the DePIN project. DePIN projects are more likely to solve their own problems, such as coordination and network start-ups. All they need is a reliable and functioning underlay. And, since a lot of DePIN projects are on Solana, composability and interoperability with each other becomes very easy. So Solana is gradually becoming the default build platform. The PEAQ that you mentioned went live yesterday, it also has a very strong ecosystem. IoTeX also has a strong ecosystem. These blockchains have attracted a lot of projects by providing modular and service-oriented solutions for DePIN projects. In the future, we’ll see if Solana continues to be the dominant platform, or if there will be more decentralization, with some DePIN projects opting for more “customized” solutions. Here’s how I would summarize the current landscape.

Laser

Yes, personally, I feel that for the DePIN project, from a technical and deployment perspective, our top priority is ease of use and low Money Laundering. As you mentioned, whether it is fully Decentralized is not important to us. Because the goal of all DePIN projects, or the problems we want to solve, are real-world problems. For example, for all energy-related DePIN projects, our goal is to accelerate the development of renewable energy in the real world, meet real needs, and solve practical problems. So, whether it’s IoTeX, peaq, Solana, or other EVM platforms, it doesn’t matter which one we choose as long as we are familiar with it. Additionally, in the early stages of the project, on-chain Liquidity may be an important factor. This may affect our choice of which ecosystem to release Token and Mainnet on, as this requires the ecosystem to provide substantial Liquidity support. So from this perspective, Solana may have an advantage.

Future Prospects of DePIN (00:23:23 - 00:25:10)

Dylan is looking forward to the future of DEP, predicting a greater development of DEP next year, especially further rise after the launch of energy-related projects on Mainnet.

Laser

This is just my personal opinion. I know it may be biased towards our side. What do you think? Is there anything else you would like to share before we finish?

Dylan

Yes, overall, as we discussed, I think DEPIN is one of the most exciting zones in the encryption field. It is addressing real-world problems, which is rare in the encryption field. We are seeing phenomena that have not appeared in the encryption industry before, such as very strong infrastructure and founders from a Web2 background joining the DEPIN zone. They hope to solve long-standing problems in their industry through DEPIN, problems that traditional methods cannot solve. This makes me look forward to DEPIN. I think what is being built now is some real business. For example, Glow, a project related to energy, already has a seven-figure income. Helium has achieved an eight-figure income, and Geodnet has also achieved a seven-figure income. We are seeing on-chain income emerging in DEPIN, which was rare in the encryption industry before, except in a few areas.

I think next year will be a very important year for DEP. We will see some protocols that already have a certain product-market fit continue to increase revenue and business. Some of the most exciting projects, especially energy projects, will launch tokens on Mainnet and truly expand and develop their ecosystems. This year we have seen a crazy rise, I think we will see an even bigger rise next year.

DePIN will become more well-known, not only within the encryption industry, but also expanding beyond the industry. We will see more exciting ideas and innovations, as well as more excellent founders entering this field. I am looking forward to the future.

Laser

Yes, I believe that DePIN can be a bridge between Web2 and Web3, allowing more people from Web2 to understand Web3 in a positive way, instead of having a negative image like FTX.

Closing Remarks and Guest Information (00:25:10 - 00:26:23)

Both parties summarized the content of the conversation. Dylan mentioned that his research findings can be found on Messari or Twitter, and he also previewed the upcoming DePIN Energy Report.

Laser

Okay, let’s stop here. Good night!

Dylan

Okay, thank you for inviting me to participate in this interview.

You can find my research on Messari, or follow me on Twitter with the username @DylanBane. I will soon release an energy report on DEP, so don’t miss it if you are interested in DEP.

Laser

Yes, I think Dylan is the best researcher in the DEP field. If you are interested in DEP, be sure to follow Dylan on Twitter, where there is a lot of great information about investing in DEP. Thank you very much for your participation today!

Dylan

Of course, thank you for inviting me!