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- My favourite DePIN talk of 2024 - Hivemapper @ Breakpoint
My favourite DePIN talk of 2024 - Hivemapper @ Breakpoint
Ariel Seidman's talk on Hivemapper at Breakpoint was my favourite DePIN talk of 2024. The talk not only highlighted the success of Hivemapper and DePINs, but the VC funding landscape.
Hivemapper is a DePIN project which uses a dashcam (custom hardware device), to map images of the roads as you drive. Users are incentivised by earning the crypto currency token $HONEY.
How Hivemapper works [1]
Part of the ethos and dreams of Web3 companies, is to compete with the ‘big tech’ of Web2. The slide below epitomises the Web3 ethos, with Hivemapper competing against Google directly. Hivemapper provided efficiency benefits too, by mapping at a rate 5x faster than Google Maps - Hivemapper mapped 10 million miles in two years, this took Google 10! This might be the best slide too. *The slide has an error and should be Hivemapper mapping 10 million unique miles.
The data provided on the supply side, by users, is then sold on the demand side to map companies. Hivemapper are selling to 3 of the top 10 global mapmakers.
VC Funding Landscape
The key differentiator compared to most project talks, was the focus on the VC funding landscape and the context of why they are building a DePIN. The two slides below show the impact of fiscal stimulus/money printing which peaked during 2020/21, to pay for lockdowns and the excessive funding of projects by VCs. The 502 unicorns funded in 2021 may never be topped.
In the Zero Interest Rate Phenomena (ZIRP) of the 2010s, VCs heavily funded unprofitable projects to drive out competitors and generate demand. These incentives were unsustainable and inefficient, everyone knew $5 Uber’s were never going to last. Uber’s demand and supply ‘success’ has resulted in them being the #1 app in many major Western cities. But, at the cost of a $30bn accumulated deficit as of Q2 2024.
Tesla has a similar story to Uber, at the cost of a $6bn accumulated deficit in 2019, but managed to be breakeven in 2021 and up $30bn in 2024. Whether Uber will be able to reverse their cost (like Tesla) remains to be seen, but I believe DePINs provide a much more efficient way for the next generation of applications.
DePINs - A new form of capital deployment
DePINs offer a new form of capital deployment. DePINs have the tokenised user incentives generating the supply side, without the inefficient cost deployment of (traditional) Venture Capital firms. This allows for users to tokenise their assets/real estate and generate income in a transparent way. The rewards are linked to the supply side incentives and revenue from demand enables further rewards in the form of Burn and Mint tokenomics design. A recent report by Messari shows the increased demand and the number of tokens burnt as a result (see Appendix 1). This leads to a more efficient way to deploy capital, grow the supply side and incentivise users to contribute to the network.
The presentation also brought in other DePIN projects to highlight their success, with Helium. It’s nice to see other project highlighting helium’s 100,000 mobile users (on the consumer side).
Helium Mobile’s Success [1]
Clsoing Remarks
It is easier to respond to technological changes, than to change your business model.
Appendix 1 - DePIN Burn and Mint Tokenomics
The chart below from Messari demonstrates the demand side growth since Breakpoint, with the Burn and Mint tokenomics model used by Hivemapper and other DePIN projects.
DePIN Burn & Mint Tokenomics [2]