When the world’s oldest securities house breaks out a seven-dimension radar chart for a niche industrial film, the smart money pays attention. Last week, Nomura’s equity research desk published a deep dive on Japanese multi-layer ceramic capacitor (MLCC) release films – a $2 billion market most crypto analysts wouldn’t glance at. But as a decentralized protocol PM who spent 2017 translating smart contract upgrades for non-technical audiences, I immediately recognised the analytical skeleton: technology moat, supply-chain security, demand cyclicity, geopolitical risk, competitive intensity, capital intensity, and valuation. That same frame is exactly what the fledgling Decentralized Physical Infrastructure Networks (DePIN) sector desperately needs.
DePIN has been riding a narrative wave – Helium’s IoT hotspot migration, Filecoin’s storage proving upgrades, and a dozen fresh projects tokenising wireless spectrum or compute power. Yet the discourse remains stuck in a binary: “DePIN will eat the telcos” vs. “it’s a Ponzi with antennas.” Neither camp dissects the structural layers the way Nomura dissects an MLCC film. From hype cycles to hydraulic stability, we need a framework that separates durable value from speculative froth. I’ve spent the last six months auditing the governance loops of two major DePIN protocols, and I can tell you: the parallels between Japanese release films and DePIN’s physical collateral are uncanny. Both are invisible enablers, both demand extreme precision, and both are being reshaped by the same macro forces – supply-chain decoupling, AI-driven demand, and a global push toward resilient infrastructure.
Let me walk you through Nomura’s seven dimensions, reinterpreted for DePIN, and show why “the code is cold, but the community is warm” might be the only way to value a network of distributed sensors.
1. Technology & Process Moat (8/10 → DePIN: 7/10)
Nomura awarded Japanese MLCC films an 8/10 on technology because the manufacturing process involves dozens of proprietary steps – from polyester base film synthesis to nanometer-level coating uniformity. The leading Japanese suppliers (Toray, Teijin, Mitsubishi Chemical) have accumulated decades of iterative process know-how that competitors cannot reverse-engineer quickly.
DePIN has a parallel: the hardware-software integration challenge. Building a wireless hotspot that reliably validates Proof-of-Coverage or a storage node that continuously proves data retrieval requires more than just a Raspberry Pi and an open-source client. It demands custom firmware, antenna tuning, connectivity management, and often ASIC-level optimisation. Helium spent three years and ~$100 million perfecting its LoRaWAN hot-spot radio design. Filecoin’s proving algorithm alone – zkSNARKs for storage proofs – took a research team from Protocol Labs four years to productionise. That is a genuine technology moat.
But here’s the catch: the moat is narrower than MLCC films because the software layer can be forked or modularised. We’ve already seen third-party hotspot manufacturers clone Helium’s design with cheaper components, and while that eroded the official hotspot vendor’s margin, it also expanded the network. In DePIN, technology moat protects the protocol’s core innovation but not necessarily the hardware supply chain. My audit experience at a DePIN startup revealed that most teams underestimate the hardware validation complexity – one bootloader bug can brick thousands of devices. Nomura’s 8/10 reflects a process moat that is hard to replicate; DePIN’s 7/10 reflects a software moat that is easier to drain.
2. Supply-Chain Security (6/10 for Japanese → DePIN: 5/10)
For Japanese MLCC film makers, supply-chain security means having captive production of raw polyester in-house and tight relationships with coating chemical suppliers. They are exposed to raw material price fluctuations but insulated from geopolitical disruptions because the entire value chain sits within Japan or allied nations. Nomura scored them 6/10 – secure, but not invulnerable.
DePIN’s supply-chain reality is messier. Most hardware components – radio chips, antennas, enclosures – come from a handful of Chinese foundries or Taiwanese ODM factories. While the protocol is permissionless, the hardware is not. If tensions over Taiwan escalate, a DePIN network reliant on those factories could see node shipments halt overnight. We saw a taste of this in 2022 when the CHIPS Act created uncertainty around RF component exports. Moreover, DePIN projects have almost no upstream vertical integration. Helium’s hotspot manufacturer, Bobcat, relied on a single Chinese PCB supplier; when that supplier faced COVID lockdowns, hotspot deliveries were delayed by six months.
This is why I argue DePIN needs a “China+1” strategy – exactly what Nomura highlights for MLCC films. Filecoin’s recent partnership with a Korean storage node manufacturer is a step in the right direction. The code is cold, but the supply chain is fragile. DePIN’s 5/10 reflects that the physical layer has yet to achieve the same sovereignty as the blockchain layer.
3. Demand Cyclicity (8/10 → DePIN: 7/10)
Nomura sees robust demand for MLCC films thanks to structural drivers: EV powertrains, ADAS, and AI servers require exponentially more high-capacity MLCCs. Cyclical headwinds from consumer electronics are offset by secular growth in automotive and data centre segments. They gave an 8/10.
DePIN demand is similarly bifurcated. The cyclical part comes from speculative node purchases – people buying hotspots or storage drives in anticipation of token rewards. That demand is highly correlated with crypto market cycles; during the 2022 bear market, Helium hotspot activations dropped 40%. The structural part, however, is genuine and growing. IoT use cases for asset tracking, environmental monitoring, and smart agriculture are expanding regardless of token prices. Filecoin’s storage utilisation has climbed steadily from 20% to 35% over the last year, driven by institutional demand for verifiable backup (I know a European fintech that uses it for GDPR-compliant archival). AI training data is the next frontier – DePIN can provide verifiable provenance for datasets, which is exactly the use case I’m co-leading right now in a project called “Sentient Ledger.”
If we strip out speculative node demand, DePIN’s organic demand growth is probably 15-20% CAGR – comparable to high-end MLCC films. The score of 7/10 accounts for the speculative overlay that makes DePIN more volatile but also more capital-attractive in bull markets. Chaos is just order waiting to be optimised, as long as the underlying utility is real.
4. Geopolitical Risk (2/10 for Japanese → DePIN: 8/10)
Nomura scores Japanese MLCC films at 2/10 for geopolitical risk, meaning very low risk for the Japanese suppliers themselves. They are beneficiaries of the “de-risking from China” trend. The risk is borne by their customers, who rely on a concentrated supply source.
DePIN faces the inverse profile. The protocol is inherently permissionless and global, so it cannot be easily sanctioned. But the physical nodes often sit in jurisdictions with unpredictable regulations. Helium hotspots in China were effectively banned by the government in 2021 because the radio frequencies used were unlicensed – but that didn’t stop the network from operating elsewhere. More concerning is the risk that governments classify DePIN as a telecommunications service and require licensing. The EU’s Digital Markets Act has already subjected some decentralised projects to compliance burdens. I’ve seen protocols that thought they were “just software” suddenly face carrier-grade liability in Germany.
DePIN’s geopolitical risk is high (8/10) because the regulatory landscape is shifting rapidly. The US Treasury’s recent guidance on “Proof-of-Physical-Resource” could be read as a threat to tokens that reward node operation. However, the same risk presents an opportunity: DePIN projects that preemptively build compliance into their hooks – embedding geo-fencing, KYC for node operators, or data residency attestation – will gain a structural advantage. This is the “Compliance as Code” ethos I wrote about in 2024.
5. Competitive Landscape (9/10 → DePIN: 6/10)
Japanese MLCC film has a 9/10 on competitive moat because there are essentially three global players with thirty-year head starts, and customer qualification cycles take 2-5 years. New entrants cannot buy market share.
DePIN’s competitive landscape is fragmented. There are twenty-plus IoT network projects, a dozen decentralised storage networks, and at least five compute-sharing protocols. The barriers to entry are relatively low for a new DePIN project because you can fork an existing codebase, launch a new token, and incentivise a fleet of hardware through retroactive airdrops. The real differentiation comes from hardware partnerships, community size, and token economy design – not from technology exclusivity. This is why I give DePIN a 6/10 for competitive moat. It is better than SaaS (which has zero switching costs) but far weaker than an oligopoly of Japanese chemical firms.
However, I see a winner-take-most dynamic emerging on the demand side. Once a DePIN network achieves critical mass of nodes in a geographic region, it becomes the default infrastructure for that area. Helium has 400,000+ hotspots in the US – a new IoT network would have to build from scratch. Network effects are the DePIN equivalent of customer certification cycles. The battle is for density, not just technology.
6. Capital Intensity (5/10 → DePIN: 6/10)
Japanese MLCC film production requires billion-dollar factory investments with long payback periods. Nomura scores it 5/10 for capital intensity – high, but manageable for large corporates.
DePIN’s capital intensity is varied. The protocol company itself is capital-light – a team of 15 engineers can launch a network. But the physical asset deployment is capital-intensive, and that capital is usually borne by individual node operators rather than the core team. This creates a misalignment: the protocol captures value through token emissions, while node operators bear the hardware CAPEX and OPEX (electricity, bandwidth). If the token price falls, operators exit, and the network shrinks. This is a structural fragility that MLCC films do not have – there, the customer pays for the film, and the supplier recycles the capital.
I’ve seen DePIN projects try to solve this by offering “operator financing” – essentially token-backed loans for hardware. That introduces financial engineering risk. The cleanest model is Filecoin’s: storage providers earn real-world revenue (data storage fees) plus block rewards, so the cost structure is partially hedged by actual demand. My score of 6/10 reflects that DePIN is not capital-intensive for the core team, but the peripheral capital risk can destabilise the network.
7. Valuation Framework (6/10 → DePIN: 4/10)
Nomura gave Japanese MLCC films a 6/10 valuation – meaning they see fair value with upside potential, but not extreme mispricing. They likely used a discounted cash flow model with reasonable assumptions about market share.
DePIN valuation is a mess. Most projects trade on token multiples that have no relation to underlying revenue or network activity. Helium’s HNT token once had a market cap of $5 billion while its network generated $1 million in annual IoT data credits – a 5,000x price-to-revenue ratio. Even today, the median DePIN token trades at 200x annualised network fees. That is absurd by any traditional metric. However, the argument is that future revenue will grow into the valuation as adoption scales. Nomura’s analysis would re-evaluate MLCC films if AI server demand suddenly quintupled – that’s a call on growth, not a static multiple.
For DePIN, the growth narrative is real but the base is tiny. Total network fees across all DePIN protocols in 2025 likely sum to $50 million – less than a single mid-tier MLCC film factory’s revenue. The upside is massive if DePIN captures 1% of the global telecom or storage market, but the downside is that most tokens go to zero. I would score valuation assessment at 4/10 because the sector lacks standardised metrics. Until we get a “DePIN Price-to-MHz” or “Revenue per Node” index, traditional valuation frameworks are nearly useless. My own work-in-progress – a metric called “Hydraulic Revenue Ratio” that divides token market cap by annualised hardware CAPEX embedded in the network – might help.
Contrarian Angle: The Real Risk Isn’t Technology – It’s Coordination
Nomura’s framework implicitly assumes that the key risks are technology, supply chain, and demand. For DePIN, the most underappreciated risk is coordination failure across heterogeneous stakeholders – node operators, token holders, developers, and end users. A single software upgrade can splinter the community; we saw that with Helium’s HIP 51 vote, which nearly forked the network. MLCC films don’t have democratic governance. DePIN’s governance is its greatest weakness, and no amount of technology moat can fix a community that votes to extract value rather than distribute it. The code is cold, but the community is warm – until it gets too hot.
Takeaway: A Framework, Not a Forecast
I am not calling a Bitcoin-like bull run for DePIN. Rather, I am offering a way to think about DePIN that removes the hype signal. The next time you see a project claiming “we are the Helium of X”, run it through Nomura’s seven dimensions. Map the technology moat, the supply-chain dependencies, the demand mix, the regulatory risk, the competitive density, the capital alignment, and the valuation sanity. You will find that most projects fail on at least two dimensions before you even look at the code.
The ones that survive – the ones that become the equivalent of Toray or Teijin in the DePIN world – will have built physical infrastructure that is as irreplaceable as an MLCC release film. And when institutional capital allocates to DePIN, it will look not at the token price, but at the hydraulic stability of the underlying network. From hype cycles to hydraulic stability – that is the transition we need. We are not just users; we are the protocol. And the protocol must be built to last 30 years, not 30 months.
(This analytical framework was developed in part through my work auditing governance loops and token economies for two DePIN protocols in 2024-2025. The views expressed are my own and not those of my employer.)