DePIN Should Be Next

Opinion by: Aaron Basi, head of product at IoTeX

With the recent passage of the GENIUS Act, the United States has taken its first real step toward regulating crypto nationally. The bill focuses on stablecoins, establishing reserve rules, audits and authorized issuers. This is a milestone for the industry. If lawmakers want to support the next wave of innovation, they cannot stop here. 

One of the fastest-growing sectors, decentralized physical infrastructure networks, or DePINs, still lacks a legal framework .

DePIN is not about speculation or NFTs. It involves building real-world infrastructure through community-owned hardware. People contribute antennas, sensors or hard drives and earn token rewards. These systems support services like wireless connectivity, mapping and decentralized storage. 

Unlike many blockchain use cases, DePIN is already operational and growing fast.

DePIN is scaling faster than regulation

Projects like Glow have surpassed $15 million in revenue, while Geodnet reports over $1 million in annual recurring revenue. DePIN protocols across the ecosystem collectively generate over $250 million in revenue. These are not pilots; they are functioning networks delivering value to users and contributors.

They still lack regulatory clarity. Unlike stablecoins, which are now governed by defined federal rules, DePIN projects operate in a gray zone. That uncertainty leaves users, developers and investors exposed.

The regulatory gaps are becoming harder to ignore

DePIN systems rely on real-world data and infrastructure. They do not fit neatly into telecom, cloud computing or crypto categories. This makes existing laws difficult to apply.

Many DePIN protocols depend on devices that gather and share environmental or location-specific information. There are no clear standards around what data can be collected, how it should be stored or who owns it. Without this, users may lose trust and opt out.

Compensation is another unresolved issue. People are paying out-of-pocket to deploy hardware, but there are no baseline rules on how they should be rewarded. If incentives dry up or tokenomics shift, contributors are left holding risk without safeguards.

Related: Blockchain and AI could fuel $3.5T DePIN market boom by 2028: WEF

Governance presents its own challenge. Many DePIN projects claim decentralization, yet key decisions remain in the hands of core teams. If these systems will serve public interests, they must be transparent and accountable.

DePIN deserves thoughtful regulation

The GENIUS Act proved that crypto regulation doesn’t have to be destructive. It offers a foundation for stablecoins without stifling innovation. DePIN deserves a similarly nuanced approach.

DePIN differs from financial tokens. It exists at the intersection of hardware, software and services. This hybrid nature means it needs a tailored framework. It should not be treated like decentralized finance (DeFi) or stablecoins.