DePIN, or Decentralized Physical Infrastructure Networks, has emerged as a focal point for venture capital, defying a broader slowdown in crypto funding. Escape Velocity, a crypto-focused VC firm, has successfully raised nearly $62 million for its second fund dedicated to investing in DePIN projects, underscoring a strong belief in the sector's long-term potential. This strategic move, supported by prominent investors like Marc Andreessen and Micky Malka, signals a renewed interest in fundamental utility within the decentralized landscape.
Bolstering Decentralized Physical Infrastructure (DePIN)
The successful close of Escape Velocity's second DePIN-focused fund in December highlights the conviction of key industry players in the sector's future. Co-founder Mahesh Ramakrishnan believes DePIN remains significantly underdeveloped relative to its potential, often hampered by projects launching tokens based on "euphoria and an idea" rather than established utility. Yet, industry advocates, including Jeffrey Hu of HashKey Capital, are "especially bullish" on DePIN's ability to seamlessly bridge the physical and digital worlds, presenting real-world applications and value.
A Resilient Sector Amidst Market Fluctuations
Despite broader industry headwinds and significant drops in token prices—with many DePIN-related tokens 94% to 99% below their all-time highs—the sector demonstrates resilience. According to a report by Escape Velocity and Messari, the combined market capitalization of DePIN projects is estimated around $10 billion, with networks reportedly generating $72 million in on-chain revenue in 2025. Other data points to the sector's market cap recently falling below $9 billion, a notable decline from its peak of over $43 billion by late 2024. Crucially, networks generating revenue have continued to operate effectively, indicating the durability of projects tied to active physical infrastructure. Furthermore, DePIN projects are gaining traction in jurisdictions with clearer regulatory frameworks and immediate infrastructure needs, such as the United Arab Emirates and Singapore, suggesting that adoption may accelerate outside traditional Silicon Valley startup ecosystems.
