In a crypto network, a two-sided market is the structure underneath almost every DePIN: operators supplying hardware on one side, customers buying the service on the other, and a token used to pay whichever side will not show up on its own. The token exists to break the circularity, because operators will not deploy without buyers and buyers will not commit without coverage. The design decision is which side gets subsidised, and for how long.
Subsidising supply when demand is the binding constraint is not a strategy, it is a delay with an inflation cost attached, and node count is the metric that hides it for as long as anyone is willing to look at node count.
Scroll to see the full diagram
The crypto version, before the textbook one
Take Helium. Hosts buy radios and provide coverage. Carriers and device operators buy connectivity. Neither is worth much without the other, and nobody was going to install thousands of radios on the promise that carriers might eventually buy offload. The token resolved that by paying the supply side up front out of future issuance.
The framing is standard in DePIN analysis. Writing in CoinDesk in August 2024, Jasper De Maere classified DePIN projects as almost always made up of two-sided marketplaces with a distinct demand side, where users seek a service, and a supply side, where decentralized infrastructure such as nodes, hardware and sensors is hosted.1 The academic version arrives at the same place: a 2026 review in Frontiers in Blockchain describes the DePIN structure as what economists call a multi-sided platform, and notes that framing it this way allows the established Rochet and Tirole platform-competition framework to be applied to designing fees and rewards.2
Which side is actually binding
The default assumption in this category is that supply is the constraint, because supply is the visible thing and rewards are the tool everyone already has. That assumption is right at the very start and wrong soon after. Once there is enough coverage to serve a customer, the constraint moves to whether anyone is selling to customers, and reward budgets rarely move with it.
Multicoin's design review makes the point operationally. Because networks differ in how much footprint they need before they can serve demand, reasoning about minimum viable coverage is what determines when a network should start generating demand at all.3 That is a scheduling instruction, not a philosophy. Work out the coverage threshold, then move the budget from supply recruitment to sales the moment you clear it.
Why node count is the wrong number
Node count is attractive because it goes up. It also dilutes: each additional operator shares the same reward pool, so growth on the supply side reduces the return of every operator already there. In a two-sided market with a fixed subsidy, supply growth beyond the coverage threshold is a transfer from existing operators to new ones, dressed up as traction.
The number that means something is coverage against a serviceable market, plus the share of rewards funded by customer payments rather than issuance. One tells you whether you can sell. The other tells you whether the sale is covering the cost.
What this changes at design time
Three decisions follow from taking the two-sided structure seriously. Split the reward budget explicitly into a supply-side line and a demand-side line, and give the demand line an owner, because unowned budgets do not get spent. Set the coverage threshold that flips the emphasis, and name it in a governance document so the switch is not a judgement call made later under pressure. And price the demand side in a unit customers can plan around, which in practice means dollar-denominated credits minted by burning the token rather than quoting a volatile asset.
Underneath all of it sits the ordinary business question. A two-sided market is only worth building if there is a customer with a budget on the far side. The token can pay for the supply side. It cannot manufacture the demand side, and a design that assumes otherwise is a subsidy in search of a business.
Common questions
What is a two-sided market in crypto?
It is a network connecting two groups that need each other, most commonly hardware operators and paying users on a DePIN. CoinDesk analysis describes DePIN projects as almost always two-sided marketplaces with a supply side hosting nodes, hardware and sensors and a demand side seeking a service.1 The native token is used to pay whichever side will not turn up first, usually supply.
Which side of a two-sided market should a token subsidise?
Whichever side is genuinely binding, which changes over time. Supply is binding until there is enough coverage to serve a customer; after that the constraint is sales. Multicoin frames minimum viable coverage as the trigger for when a network should begin generating demand.3 Continuing to subsidise supply past that point dilutes existing operators without making the service more sellable.
Why is node count a misleading DePIN metric?
Because every new node shares the same reward pool, so supply growth beyond the coverage threshold lowers the return for every operator already on the network. It reads as traction while functioning as dilution. More useful pairs are coverage against a serviceable market, and the share of operator rewards funded by customer payments rather than by scheduled issuance.
See DePIN Tokenomics Guide for how this applies in practice.
Sources
- Why DePIN Is Taking Off Now
CoinDesk (opinion), by Jasper De Maere, 2024
Published 19 August 2024. Classifies DePIN projects as almost always two-sided marketplaces and defines the demand and supply sides in DePIN terms. - Decentralized physical infrastructure networks (DePIN) tokenomics
Muneer Maher Alshater, Frontiers in Blockchain, volume 8, 2026
Received 9 June 2025, published 9 March 2026. Describes DePIN as a multi-sided platform and applies the Rochet and Tirole platform-competition framework, cited in the paper's own reference list as Rochet and Tirole (2003), to fee and reward design. - Exploring The Design Space Of DePIN Networks
Multicoin Capital, by Shayon Sengupta and Tushar Jain, 2023
Published 21 September 2023. Sets out threshold scale and states that reasoning about minimum viable coverage determines when a network should engage in demand generation.
Last reviewed 2026-08
Know the terms but not sure how they apply to your project? That is what an engagement is for. We design, document, and stress-test the whole token economy inside the Tokenomics Data Room.
100+ projects advised. Complete tokenomics in 4 to 6 weeks.