DePIN is pivoting toward traditional Infrastructure-as-a-Service model
Analyst Konstantin Tkachuk argues that decentralized networks must shift from raw capacity to guaranteed service contracts to survive.
Decentralized Physical Infrastructure Networks (DePIN) are undergoing a fundamental shift in value, moving away from raw resource provision toward a traditional service-based model. This transition suggests that the industry's initial focus on decentralization is being superseded by enterprise demand for reliability and legal guarantees.
Konstantin Tkachuk argues that DePIN is following a historical infrastructure playbook where raw capacity is built ahead of demand, leading to inevitable commoditization. According to Tkachuk, profit in such sectors eventually shifts from the providers of the raw resource to the entities that sell guaranteed, contracted services on top of that resource. He posits that the real value in the current landscape is migrating from the decentralized raw resource layer to a service layer capable of providing contracted Service Level Agreements (SLAs).
The Commoditization Trap
DePIN projects typically use token incentives to encourage individuals to deploy hardware—such as compute, storage, or wireless nodes—to create a shared network. While this effectively bootstraps supply, it often creates a surplus of raw capacity that drives prices down. Tkachuk notes that every modern infrastructure sector has developed using this same pattern: raw resources get cheaper forever, and the money moves to whoever provides the guarantee.
The risks of remaining solely in the raw capacity layer are evident in recent industry volatility. Storj Labs, Inc., a decentralized storage provider, filed for Chapter 11 bankruptcy on July 26, 2026. Despite the filing, the company described its underlying business as "strong and right-sized," attributing the restructuring to the need to resolve legacy liabilities.
The Shift to Enterprise Standards
This evolution represents a pivot in how blockchain is applied to physical assets. While DePIN was initially marketed as a disruptive alternative to centralized giants like AWS and Azure, enterprise customers prioritize stability and legal recourse over the ideological benefits of decentralization. For these clients, a blockchain-based dashboard is less valuable than a legally binding contract that guarantees uptime and performance.
If the most successful DePIN companies continue to move their revenue and contracts off-chain, it suggests that blockchain's primary utility in infrastructure is as a bootstrapping mechanism for supply rather than a permanent operational layer for demand. In this scenario, the token economy serves as the catalyst to build the network, but traditional business contracts sustain its growth.
Future Outlook
As the industry matures, the distinction between "crypto" projects and traditional Infrastructure-as-a-Service (IaaS) providers is expected to blur. Tkachuk predicts that this trend will lead to a future where the majority of demand-side revenue settles off-chain under enterprise contracts, leaving on-chain dashboards to track only a minority share of total revenue. The industry is now watching to see if other DePIN pioneers can successfully transition to this service-oriented model before their raw capacity becomes a commodity.