For years it has been an enemy of encryption. Now, the SEC is her friend. Provided that web3 companies play by the rules, they are free to do what they do best — innovate, code, and build — without fear of a US regulator breathing over their shoulder. The industry has weathered the recall tsunami that has characterized the Biden administration, and in 2025 the SEC’s tiger has transformed into a friendlier cat. She still has teeth, but she will only use them when threatened – and as her latest ruling shows, she does not view DePIN as a threat.
In late September, the agency issued a no-action letter that marked an important regulatory milestone for decentralized physical infrastructure networks (DePIN). The letter is addressed to the DePIN Projects Consortium He explained Some token distributions on these networks will not be treated as securities under federal law – provided they adhere to specific utility-focused standards.
It may be a long time ago, but the era of logical cryptocurrency regulation has arrived and is ready to benefit projects developing web3 infrastructure in particular. This is the story of DePIN and why it’s the most important blockchain narrative you’re not following.
DePIN gets the green light
It’s hard to overstate the importance of the SEC’s September ruling on DePIN. This development represents a pivotal moment in blockchain regulation, allowing token projects to develop solutions of real-world utility. While the SEC’s decision doesn’t give DePIN projects carte blanche to operate without restrictions — there are still rules to adhere to — it does enable them to focus on onboarding users and institutions alike.
One of the reasons the SEC has given DePIN its broad blessing, by the way, is that it recognizes that the sector’s various native tokens are not inherently speculative. Instead, DePIN codes are designed to incentivize the direct provision of real-world services. The SEC’s position emphasizes that tokens used to bootstrap and maintain physical infrastructure, such as wireless networks or data storage, fall outside the scope of traditional securities oversight when they operate as pure utilities.
Other sectors, such as DeFi, are more ambiguous in this regard, depending on whether the token in question pays dividends or other profits. However, for DePIN, the SEC’s no-action letter enables projects that link token utility to verifiable network contributions to operate with low legal risk. They got the green light.
Debbie
Decentralized physical infrastructure networks are blockchain-based systems that crowdsource real-world physical assets through token incentives. In essence, Demin Untapped resources – such as spare bandwidth, computing power, or power capacity – are transferred to shared networks.
You may not need the full access to cellular data your plan provides, but someone else in your area probably does — and is willing to pay for the privilege. Likewise, your high-powered GPU may only see any action when you’re gaming, but the rest of the time it can work for someone else and earn you revenue in the bargain. And that, in a nutshell, is the DePIN promise.
Its use cases extend beyond computing resources. If you envision DePIN as a distinct franchise model for critical infrastructure, it’s easy to envision some ways in which it could be leveraged. Imagine franchising a telecommunications tower or a solar grid: Participants invest capital and effort to deploy the devices, and earn tokens proportional to the value they add to the grid.
These tokens can then be exchanged for services within the ecosystem, such as accessing discounted data or calculating credits. The main difference is that value accumulation is based on tangible outputs. In other words, it is measured in gigabytes transferred, terabytes stored, or kilowatt-hours generated, not abstract promises of higher prices. This is why DePIN tokens are clearly not securities.
Their business model is actually consistent with that of established industries such as telecommunications and cloud computing, where revenues stem from providing services, not speculation. By decentralizing ownership and operations, DePIN reduces barriers to entry and expands global coverage while leveraging the transparency of blockchain to track contributions and rewards. For users of the services provided by DePINs, who are typically enterprises, this translates into cost-effective access to computing, data, and other digital resources.
The world of mobile phones is booming because of the DePIN tailwind
If there is one project that embodies the potential of DePIN, this is it Mobile worlda blockchain-powered mobile network targeting underserved areas in Africa, Asia and beyond. Launched in 2018, World Mobile’s DePIN architecture sees community operators deploy lightweight AirNodes for connectivity and EarthNodes for core infrastructure to form a global communications alternative.
Network metrics show that World Mobile is an idea whose time has come: It is now approaching 2.5 million users in more than 20 countries, with operators earning hundreds of thousands of dollars in bonuses for maintaining coverage. It is noteworthy that the world is mobile Rows It is among the top five blockchains by daily active users, even though the majority of DeFi users are yet to transact on it.
These numbers – 2.5 million users in particular – validate DePIN’s revenue generation mechanisms. Operators recoup their investments through token rewards funded by user fees and partnerships, creating a self-sustaining loop. Projects like World Mobile show how DePIN can deliver measurable social and economic returns, bridging the digital divide while generating revenue at the protocol level. In fact, there is a strong argument to say that DePIN has done more to connect web3 with web2 than any other sector in the onchain space.
Why DePIN doesn’t rely on the efforts of others
The SEC’s positive view of DePIN hinges on a nuanced but critical interpretation of the Howey Test, the Supreme Court’s landmark 1946 framework for determining which investment contracts constitute securities. Under Howey, an asset qualifies as a security if it involves investing money in a common enterprise with the expectation of profits derived primarily from the efforts of others.
DePIN avoids the fourth prong through its participatory design. If you want to make money from DePIN, you have to put in the work. Sure, you can buy a DePIN token on the open market and hope that demand for it will drive the price up, but that’s not enough to make it a security — especially since DePIN is one of the most undesirable sectors of the onchain. Unlike meme coins or many AI tokens, they do not rely on “number rising” speculation.
In contrast, many cryptocurrencies fail the Howey test by promising returns from the founder’s development roadmap, resembling negative stakes in the project. In comparison, DePIN’s focus on “skin in the game” for all stakeholders provides defensible legal boundaries. This nuance not only protects compatible projects, but also emphasizes to all blockchain projects the need to develop utility models first.
Asset class in the real world
Critics of DePIN have gone silent now that the industry has proven it can achieve significant real-world adoption while showing that web3 infra can offer better pricing, uptime, and reliability than its centralized counterparts — a point underscored by the recent AWS and Azure outages.
By integrating blockchain with physical infrastructure, DePIN provides exposure to high-growth sectors such as 5G data and edge computing, backed by real-world revenue streams that outpace cryptocurrency market cycles. While DePIN tokens, like all crypto assets, are subject to peaks and troughs, the core services provided by these projects will continue to operate, regardless of the token price or market expectations.
As DePIN networks scale, they have the potential to unlock trillions in untapped infrastructure value while rewarding users around the world – including users in developing countries, for whom token rewards can make a meaningful difference. With regulatory tailwinds in its favor and a high number of organic users, DePIN is just getting started.
