What Is The State Of Play In The World of DeWi?

Heli­um is the project that start­ed it all, but the DeWi space is rapid­ly grow­ing. With that growth come ques­tions, mys­ter­ies, and oppor­tu­ni­ties. New play­ers, both known and unknown, are enter­ing the mix. As the idea of 5G starts to real­ly get legs, one ques­tion you should con­stant­ly be ask­ing your­self is, “What is the state of the space?” I’m glad you asked…

The thing we call “Heli­um” is now at least 3 sep­a­rate enti­ties (Nova Labs, the Heli­um Foun­da­tion, and it could be argued, the greater com­mu­ni­ty of Hotspot own­ers). Heli­um may even­tu­al­ly stand to mean the entire decen­tral­ized wire­less space; it cer­tain­ly cre­at­ed it. For now, let’s start with a use­ful begin­ning point, which is some­where in 2020, when the first Heli­um Hotspots were being sold.

Heli­um start­ed by play­ing in an uncon­test­ed space: Build­ing a glob­al LoRa net­work. Until Heli­um came along, most of us nei­ther knew about nor cared about LoRa. I mean, I did, but only as far as it was use­ful to me in my paraglid­ing endeav­ors. That’s how I found Heli­um, but that’s anoth­er sto­ry.

Heli­um, using a token as an incen­tive, deployed a glob­al net­work of 800k+ LoRa gate­ways in about 2 years. They did that on the cost of the salaries for a few dozen peo­ple plus the first whack of cash to do a pro­duc­tion run of what would ulti­mate­ly be less than 1% of the Hotspots/nodes/gateways on the Net­work. No one else had done any­thing close to that before, no mat­ter how much cash they had. 

Heli­um start­ed with LoRa because it was uncon­test­ed. The Heli­um team knew they would even­tu­al­ly get to a point where they entered con­test­ed space, whether that was 5G, WiFi, or all data flow on the plan­et. Before they showed up for the big game, they want­ed at least a scrim­mage under their belt. LoRa was that scrimmage. 

That test game taught them a lot. They were far more suc­cess­ful than they’d hoped to be. Now, suc­cess isn’t always rain­bows and HNT, and part of the rapid and unmit­i­gat­ed suc­cess played out in an angry crowd of cus­tomers who did­n’t under­stand what they were get­ting into, or how it worked, or what to expect. Over­whelm­ing growth also high­light­ed faults in the engi­neer­ing and gov­er­nance plans they had. 

Of course, faults were expect­ed. Every good engi­neer knows that you don’t get it right on your first try, and when your first try blooms into a glob­al net­work you’re going to have glob­al prob­lems to go along with it. Heli­um is stacked with excel­lent engi­neers, so while the indi­vid­ual issues may have been sur­pris­es, every­one on the Heli­um team expect­ed sig­nif­i­cant tur­bu­lence along the way, and they got it.

Now, most of us did­n’t think about all that. We weren’t ask­ing, “What can we learn from build­ing out an eso­teric glob­al net­work in an uncon­test­ed space?”

The vast major­i­ty of peo­ple deploy­ing hotspots were doing so because, as Steve on the DeWi­Go blog has said, “Peo­ple just want cryp­to.” I get it. I’m one of those peo­ple, just like you. Still, as the dust set­tles and thou­sands of peo­ple are real­iz­ing they aren’t going to be earn­ing that much cryp­to, you’ve got to wonder: 

What did we just build? What lessons can we learn? What lessons did the ven­ture cap­i­tal­ists learn? The big tele­coms? How does this direct our next actions?

When you think about in terms of lessons learned, it helps re-frame the ques­tions that you ask about the next project. If I’ve learned any­thing in a few dozen spins around the sun, it’s that the ques­tions you ask deter­mine the out­come you get. 

Let’s start with a few lessons learned. Keep in mind that some of these lessons may not seem impor­tant to you. They may seem to only apply to ven­ture cap­i­tal­ists or big com­pa­nies. You may want to skip them. Don’t. If you’re going to invest your blood and trea­sure in a project and you want returns on that, you had bet­ter be able to see the thing from every per­spec­tive pos­si­ble, large and small. 

Let’s begin with a les­son for peo­ple think­ing about build­ing the next big decen­tral­ized net­work. These are the engi­neers, the investors, the stu­dents, the dream­ers who saw what Heli­um did and thought, “I can do better.”

First and obvi­ous­ly, build­ing a decen­tral­ized net­work decen­tral­izes what are called “CapEx” for “CAp­i­tal EXpen­di­tures”. A nor­mal per­son would call that cash. It also means you can keep OpEx, or OPer­a­tional EXpen­di­tures low, because all you have to do is main­tain a net­work some­one else built. You might think of OpEx as “pay­roll” and “tech support”.

Trans­la­tion: It’s rel­a­tive­ly cheap to build and main­tain a giant glob­al decen­tral­ized network.

Impli­ca­tion: Expect many more decen­tral­ized blockchain + meat­space com­peti­tors to spring up. That’s not just in wire­less. Heli­um led the way to show how suc­cess­ful these projects can be, but that ain’t where it stops. Need an exam­ple out­side of DeWi? What does a decen­tral­ized Glu­cose Mon­i­tor­ing Net­work look like, where you get paid in GLUC tokens to con­tribute your blood sug­ar data stream through a device you buy and maintain?

Sec­ond, any time easy cash comes up for grabs, then graft, grifts, and gen­er­al cons will imme­di­ate­ly embed. Not ded­i­cat­ing resources to com­bat that from the begin­ning can cre­ate sig­nif­i­cant cus­tomer dis­sat­is­fac­tion. Dis­sat­is­fac­tion equals fric­tion, and fric­tion in busi­ness kills profits.

Third, anonymi­ty sounds real­ly cool, but when you’re try­ing to stamp out the graft (read “gam­ing” “cheat­ing” “steal­ing” etc) men­tioned above, it’s pret­ty hard when you don’t know who to step on. Just hav­ing the abil­i­ty to make play­ers anony­mous does­n’t mean it should be used willy nilly.

Fourth, with all of those above things being true, struc­tur­ing the incen­tives of any of these blockchain + meat­space projects (NOT just DeWi projects) is crit­i­cal to long term success. 

I’ll tell ya this: If I were build­ing a blockchain + meat­space project, employ­ee #2 would be the most com­pe­tent econ­o­mist I could find at any price. 

Per­haps the dis­mal sci­ence isn’t quite so bad after all?

Fifth, a net­work that is glob­al can exist and still be more or less unused. Sole­ly build­ing actu­al util­i­ty on that net­work may cre­ate enor­mous wealth. Exam­ples of com­pa­nies build­ing on the giant cur­rent­ly unused net­work we all cre­at­ed include Track­pac and Uplink Engine.

Sixth, trans­par­ent and effec­tive gov­er­nance is crit­i­cal to effi­cient growth and com­mu­ni­ty man­age­ment. Rely­ing on a decen­tral­ized group to make good deci­sions togeth­er is nei­ther effi­cient nor like­ly to come up with the best out­come. As Ken­neth Stan­ley has explored, group deci­sions end up being things that are the least bad for every­body, not nec­es­sar­i­ly the best thing for the group as a whole. 

Sev­enth, an edu­ca­tion plan that details to the com­mu­ni­ty what to expect, what is chang­ing and why, and how they should pre­pare for future growth can remove sig­nif­i­cant amounts of fric­tion. A com­mu­ni­ty liv­ing in igno­rance because infor­ma­tion is not easy to find is ripe for being led astray by the biggest voice, whether that voice is informed or not. Edu­ca­tion is essential. 

If you are read­ing this think­ing that your team needs help with an edu­ca­tion plan, please reach out. I built the largest blog on the net for Heli­um that helps explain to thou­sands of peo­ple what was (and is) hap­pen­ing with the project. I would be hap­py to apply the lessons learned here to oth­er projects. 

With all that learned from the “LoRa scrim­mage”, let’s take a look at the next net­work Heli­um announced, “Heli­um 5G on April 27th, 2021.

Heli­um launched it first, but Heli­um 5G has not been the wild suc­cess LoRa was. Why? Let me be clear here: It’s NOT because the Heli­um team is stu­pid, or igno­rant, or unable to learn lessons from the past. Many of the lessons from LoRa were so clean­ly applied to the 5G roll­out that you did­n’t notice some of the fric­tion was gone. Still, 5G is a dif­fer­ent ani­mal entire­ly and (I sus­pect) the announce­ment was rushed. Let’s start with the dif­fer­ences between LoRa and 5G.

First, LoRa was basi­cal­ly uncon­test­ed. In 2019 you could’ve announced an intent to stamp out the exis­tence of LoRa as pesti­len­tial spec­trum or to make it an inter­plan­e­tary pro­to­col; nobody cared.

Sec­ond, the rea­son LoRa was uncon­test­ed was that very few peo­ple knew how to use it, let alone use it in every­day life. It’s still com­plex, and the like­li­hood that the aver­age glob­al cit­i­zen will use it in 2022 hov­ers only slight­ly above absolute zero. Hell, less than 1% of the world’s largest LoRaWAN net­work even votes on how to use it, and the num­ber of cit­i­zen tech­nol­o­gists who will today improve their life through some LoRa stat can be mea­sured with the num­ber of fin­gers on a carpenter. 

Now, that’s not an indi­ca­tion of val­ue, but of cur­rent use. The “bat­tle” for LoRa was­n’t a bat­tle; Heli­um just came in and scooped a del­i­ca­cy off the plat­ter that no one knew exist­ed. That is unlike­ly to hap­pen again, and if you were there to watch it, you were remind­ed of the great hock­ey play­er Wayne Gret­zky’s quote, “I don’t skate to where the puck is, I skate to where the puck will be.” Heli­um was there, but the puck has moved again.

Third, because large LoRa net­works did­n’t exist, no one knew the val­ue of large LoRa net­works. Now, let me be super clear here: Heli­um obvi­ous­ly knew the val­ue; that’s why they tar­get­ed it. Some senior lev­el execs at var­i­ous com­pa­nies around the world also knew and know the val­ue, though my feel­ing is they could­n’t believe that a glob­al net­work could be (and has been) built out so quick­ly and cheaply.

Suf­fice to say, a glob­al LoRa net­work is HUGELY valu­able. If you believe that, and I do, I’d advise (as your per­son­al invest­ment advi­sor on the inter­net) that you hold onto both your Hotspots and your HNT

With all that in mind, pret­ty clear­ly the LoRa roll­out is the oppo­site of “Heli­um 5G”, aka data on cell phones. How?

  1. Every­body knows what cell data is. It is not an unknown
  2. There are large, estab­lished, and very dan­ger­ous com­peti­tors in the water. Hi Char­lie Ergen!
  3. Every­body already uses cell data. 7.1 bil­lion phone users in the world is close enough to everyone.
  4. The part we’re using, CBRS, is a small slice and we have the low­est priority.

So, why would a com­pa­ny that came off a giant suc­cess­ful launch of an unknown prod­uct in an unknown space to an unknown mar­ket enter a new space that was crowd­ed, dan­ger­ous, and well known, at a bot­tom tier and almost com­plete­ly unpre­pared to deliv­er? I mean, ask your­self that!

To be clear, I don’t know why. It still seems sil­ly to me to launch so ear­ly, and I can­not make sense of it. I do have a few guesses:

First is prob­a­bly use­ful hubris. We need bold, dar­ing vision­ar­ies to archi­tect a new future. If you’ve ever met Amir Haleem, you know he is exact­ly that. If peo­ple like him don’t imag­ine a world for the rest of us to grow into, well, we don’t have much hope. We do, and it’s a result of use­ful hubris. I sup­port that.

Before I get to the sec­ond rea­son, let me state for the record: The Helium/Nova team (and prob­a­bly Pollen, for that mat­ter) rep­re­sent some of the smartest and most tech­no­log­i­cal­ly capa­ble humans in exis­tence. I would not dis­count their deci­sions. In gen­er­al with Heli­um, I’ve always assumed that every­one knows more than me and is smarter than me. I believe that to be true in this case. 

Sec­ond, Heli­um HAD to announce 5G. They had to claim it. They did­n’t know how far along either a tel­co or their next com­peti­tor was. Those enti­ties could’ve announced on April 28th, 2021 or…later, which is what Pollen did 10 months lat­er, in Feb­ru­ary of 2022. Giant tel­cos still (as of July 2022) aren’t tip­ping their hand. 

So now we’ve got the (minia­ture) ele­phant in the room, which is Pol­len­Mo­bile. The ques­tion every­one’s tip­toe­ing around is, 

Is PollenMobile a competitor to Helium?

You are god­damn right they are! HOWEVER

Both Pollen and Heli­um have to sur­vive long enough to be able to emerge on the oth­er side of the tel­co bat­tles. Remem­ber, they’re not enter­ing an uncon­test­ed space that nobody cares about. They’re enter­ing one of the most com­pet­i­tive mar­kets in the world, with giant dan­ger­ous play­ers walk­ing around who are excep­tion­al­ly well fund­ed, well orga­nized, and stand to lose moun­tains if they don’t play this right. 

My take on the Heli­um vs Pollen debate is to sup­port both, to roll out both, and to help both of them get big enough to build us a bet­ter world.

That’s what we’re bet­ting on. When you build with Heli­um, Pollen, or what­ev­er the next project is, you’re bet­ting that a decen­tral­ized world, with all the mess and mis­takes of a new­born human endeav­or, will be bet­ter than a cen­tral­ized one. 

We are bet­ting that a bright and shin­ing thread in human his­to­ry, one of spread­ing pow­er through­out a com­mu­ni­ty and apply­ing rewards where they’re earned, will actu­al­ly win out the bat­tle. It may not. That thread is cov­ered in grease and gore, the black­ened fat and blood of a thou­sand fiery bat­tles between the well-gov­erned and the ill-used. The burnt out tat­tered ends of that thread mark the tread of his­to­ry, though the shin­ing remains yet. Where we end up in the future will be deter­mined in part by where we place our bets today.

That’s why I’m bet­ting on both. Deploy­ing both.  Learn­ing from both, work­ing with both, and more.  They only GET to be com­peti­tors if they sur­vive to adult-hood. They’re not even pre-teens yet; let’s get ’em to matu­ri­ty before they go into mor­tal com­bat with each other. 

For the record, I’m pro-Helium & pro-Pollen.

But, but, but, I thought we were going to talk about the state of the space, what about that?”

We are, but I had to set the stage first, dawg.

Now that we’ve got an idea of the larg­er cur­rents swirling around, the lessons learned, and what’s at stake, you can start to make bet­ter deci­sions about what you’re going to invest your mon­ey in, and how, and where.

What will be the next steps in this space? What do you want to sup­port and build? How will you, as an indi­vid­ual, or com­pa­ny, or investor, place your bets? Will you sup­port a decen­tral­ized world? 

Let me point you in a direc­tion. It’s not the only one you should explore, it just gives you an idea of how to think about the state of play here.

Let’s start with a defined ques­tion: Will Heli­um go after WiFi, or VPN (Vir­tu­al Pri­vate Net­works) or CDN (Con­tent Deliv­ery Networks)?

Run through the same 4 ques­tions for each one:

  1. Does it already exist?
  2. Is it being used at any kind of scale?
  3. Is some­one cur­rent­ly pay­ing for it?
  4. What has to be true in order for a decen­tral­ized ver­sion of this to exist?

The first three are easy answers. Answer­ing the last one is what will deliv­er val­ue to Nova Labs, and the Heli­um Foun­da­tion, and Pol­len­Mo­bile and a host of oth­er orga­ni­za­tions enter­ing this rad­i­cal, vul­ner­a­ble, and poten­tial­ly world chang­ing decen­tral­ized blockchain + meat­space are­na. Per­haps YOU have an answer to that ques­tion that no one has thought of, and you hold the key to a bet­ter world for all of us. If you do, I sure hope you step for­ward and put your shoul­der to the wheel of progress, help­ing us all build this bet­ter world togeth­er. If I can help you, let me know.

Fig­ur­ing it all out is what makes this excit­ing, I’m stoked you’re along for the ride!

Waitwaitwait…what’re we up against, Nik? 

I mean, are we REALLY up against giant dan­ger­ous play­ers in a well devel­oped space? Is there any hope at all? (Yes, that’s why this is so exciting!)

Interesting facts

Hexa­gon Wire­less raised $2 mil­lion to buy hard­ware for Decen­tral­ized Wire­less projects. They’re buy­ing and deploy­ing a ton of Pollen hardware.

Heli­um raised $364 mil­lion across 7 rounds of fund­ing since 2013. Cur­rent­ly val­ued at a bil­lion-ish, with the largest LoRaWAN net­work in the world and rapid­ly grow­ing a small cell (what they call 5G) pres­ence across the US.

Those seem like big num­bers, right? Wrong.

Back in 2020, the FCC sold CBRS Pri­or­i­ty Access Licens­es (a pri­or­i­ty lev­el ABOVE ours) in Auc­tion 105 for a total of $4,543,232,339 in net bids.

What are Pri­or­i­ty Access Licens­es? We’ll take a very quick detour here to talk about the elec­tro­mag­net­ic spec­trum, from long wave to mil­lime­ter wave. In the US, the gov­ern­ment sells access to por­tions of the spec­trum to dif­fer­ent play­ers. It’s why when I turned to FM sta­tion 107.3 in Boston as I kid I rocked out to WAAF, but now anoth­er com­pa­ny has bought the rights to fre­quen­cy and broadcasts…something that ain’t rock ‘n roll. They’ve paid to broad­cast on that band with­in a cer­tain pow­er range, and no one else is allowed to.

A Pri­or­i­ty Access License means that a com­pa­ny pays for pri­or­i­ty over the next lev­el down to broad­cast. It means that if I’m broad­cast­ing with my Heli­um small cell on, say, 3.56 GHz and the com­pa­ny who owns the local PAL wants to use 3.56 GHz, I get boot­ed off.

Con­fus­ing­ly in our band (CBRS, 3.55–3.7 GHz), a Pri­or­i­ty Access License still does­n’t give you the top pri­or­i­ty; that’s reserved for the US government.

Even as a sec­ond tier user, those licens­es are valu­able. Com­pa­nies paid $4.5 bil­lion (with a B) for a tiny slice of spec­trum that the US gov­ern­ment STILL has pri­or­i­ty access over. We’re at the bot­tom of that pri­or­i­ty list. As the use of that spec­trum fills up, you should expect that your DeWi net­work will nego­ti­ate with own­ers of the PALs to allow us to broad­cast under their license. Yes, we’ll slice out some prof­it for them in order to do that. That’s just business.

$4 bil­lion is not all the tel­cos have spent, not by a long shot. That was for just 150 MHz of spec­trum, from 3.55 to 3.7 GHz. The same play­ers have, well, you can read the FCC’s auc­tion sum­ma­ry here. You can look for Auc­tion 105, which I’ve ref­er­enced above, or Auc­tion 107 for the 3.7 GHz band (from 3.7–3.98 GHz), where they’ve spent over $80 bil­lion (again, with a B) on spec­trum. Suf­fice to say, we ain’t talk­ing chick­en feed. In fact, the US Gov­ern­ment Account­ing Office reports that $258 bil­lion has been spent on auc­tion­ing off spec­trum. Heli­um’s bil­lion dol­lar eval­u­a­tion does­n’t look so impres­sive now, except…

The good news is that, hav­ing spent so much on buy­ing the rights, the tel­cos may not have enough cash left to roll out the hard­ware.

That’s where you (and decen­tral­ized net­works) come in. You buy the hard­ware and pro­vide the cov­er­age, get paid for the data your unit(s) process in cryp­tocur­ren­cy, and the tel­cos will man­age the billing in fiat to the end cus­tomer. If this plays out the way these decen­tral­ized net­works are aim­ing for, every­body wins. That’s what’s so cool about this.

  • End cus­tomers should get cheap­er rates because tel­cos are pay­ing less. 
  • You get paid in cryp­to to deploy coverage.
  • The tel­cos buy cryp­to to pay for data usage, then bill their cus­tomers in fiat.

Those are the stat­ed goals for Heli­um, being what’s called a “neu­tral host”. For Pollen, they want to be their own net­work, like AT&T or DISH or Ver­i­zon. Nei­ther is defin­i­tive­ly right or wrong. It’s excit­ing for us to watch because we’re see­ing two (and hope­ful­ly more) com­peti­tors using the same tech­nol­o­gy applied in dif­fer­ent ways for slight­ly dif­fer­ent goals. It won’t be an easy road to the top, and there’s no guar­an­tee that any bet you place will be a winner. 

For those of you who lived and came of age in the 80s, recall the immor­tal line from AC/DC,

It’s a long way to the top if you want to rock ‘n roll.”

I don’t know about you or when you were born, but I’m guess­ing if you’ve got­ten this far, you’re a lot like me. And me? I was born to rock. 

Nik Hawks is avail­able for hire if you’d like help with your blockchain + meat­space project. Whether you’re an investor con­sid­er­ing a new project and want to de-risk it by adding expe­ri­ence, or you’re on the team and try­ing to work out how to align the incen­tives for your space and keep the com­mu­ni­ty edu­cat­ed, Nik will help you eval­u­ate and design out­comes that increase the val­ue of the project. Reach out here.


2 responses to “What Is The State Of Play In The World of DeWi?”

  1. Why does Pollen Mobile charge US$250 to scan an eSIM to access Pollen Mobile’s Net­work, that is US$20 per month for a year of cov­er­age upfront but I pay that month­ly for a iPAD data only plan with a tra­di­tion­al MNO for a data-only plan, and can also obtain glob­al WWAN cov­er­age. Pollen Mobile’s real val­ue is using CBRS 3.5Ghz data net­work in a DeFi net­work for remote last mile or dead zone cov­er­age for many small­er com­mu­ni­ties. Do you think this upfront price is jus­ti­fied, it’s basi­cal­ly a year-long pre­paid plan for Pollen Mobile but where is the cov­er­age map? Dish net­work? Is this the real rea­son Apple iphone 14 is eSIM-Only so that Apple users can freely access pri­vate LTE net­works with­out hav­ing to deal with tra­di­tion­al MNOs and competition?

  2. Hi Karl, they charge that because it earns PCN.

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