Original author: Kay (Partner of Aperture Digital)
Editor's note: Helium is a centralized wireless network project (distributed Internet of Things), and its eco-coin MOBILE has gained tenfold in seven days. As of press time, the price of MOBILE is $0.0037. Kay, a partner of venture fund Aperture Digital, has been optimistic about Mobile on X recently and has repeatedly expressed his clear support for the project. In the latest issue of Binance Space, he answered in detail why he is optimistic about the project and the future development of the DePin track. BlockBeats sorted out the full text as follows:
Thanks to my colleagues for helping me sort out yesterday's Q&A on Binance Space. Welcome to discuss.
Personal introduction: I am Kay, a partner of venture fund Aperture Digital. I also led some investments in Solana ecosystem projects in the last cycle, and the institution I worked for at that time also participated in Solana's early investment. But today's sharing is all personal opinions, not representing the company and my past employer, and is not investment advice.
Q1: What are the differences and updates between DePIN and previous concepts such as the Internet of Things and IoT?
Is it a new value trough or old wine in a new bottle?
Kay: First of all, the second question is definitely the value trough, and it is the main narrative.
The main narrative is that the cryptocurrency industry has no future if there are only cryptocurrency speculators. Western institutions/media such as Multicoin/Messari, which create narratives and lead narratives, are looking for DePIN as a solution for this round of Mass Adoption. Only traditional infrastructure like Helium Mobile, which is crypto-native and can reach non-crypto users, can allow ordinary users to hold crypto, and then convert part of it into cryptocurrency speculation to feed back.
So for the first question, intuitively the biggest difference is that the DePIN we are discussing now is limited to Solona's DePIN ecological project, while most of the projects in the past wanted to build IoT chains. The logic of building chains is essentially a shell of PoW. The project party has mining machines on one hand and coins on the other. Of course, it may not be called a mining machine, such as a router, or even a power strip in the primary market. But the core is that these devices that can mine are collectively called mining machines. These mining machines are priced using the logic of financial products. In other words, they are priced based on the payback period, not the hardware price.
This is a two-wheel model of PoW mining coins. The project party sells mining machines and then uses the income from mining machines to increase the price of the coin. If it is in a bull market cycle, the price of the coin continues to rise, and the mining machines priced according to financial products can also continue to rise. Or, the mining machines do not rise, but the project party has more exit liquidity and ships more goods from the mining machines.
This is essentially a bull ponzi.
But this round of DePIN is quite different. If we take the leading US mobile $MOBILE as an example, it also has this layer of mining coin dual-wheel model to sell in-door and out-door mining machines, but it also has access to terminal network users, that is, ordinary users who use sim cards and esim cards to join the operator network. This layer of de-bubble model, and, at present, this model is scalable, two points, first, Helium Mobile's package is really cheap. 5 US dollars or 20 US dollars a month for unlimited call/data/text packages is really the cheapest package in the United States. If we look at it year-on-year, we don't even compare the traditional four major US operators, such as Google Fi, the lowest-equipped unlimited data package is 50 US dollars a month; second, it is really convenient for users to switch to his package. Maybe many listeners are mainly in Asia, where eSIM is not popular. New iPhones purchased in the United States are 1 eSIM + 1 SIM physical card slot. For eSIM, you only need to download the Helium Mobile App to switch the package.
This whole model is actually a dual-round PoW mining machine model plus a standard Internet product subsidy growth hack model, or a speed reduction side model. For example, the takeaway subsidies and taxi subsidies in the early years all followed this logic. However, there are two more layers of logic. One is the early logic of Luckin Coffee. They issued additional shares and bonds in the US stock market and used the money from the secondary market to continue to provide subsidies. The other is the logic of MEME Coin. If eSIM users turn on Discovery Mapping, they can also get $MOBILE rewards. This is very similar to the slogan of PI coin, similar to saying that this is a new Bitcoin created by Stanford. You only need to turn on your phone to mine. It is very easy to spread on TikTok and very sinking.
In general, now with $MOBILE as DePIN, and in addition to the PoW mining machine model of past IoT projects, I see a three-round model, PoW, secondary market subsidies for ordinary users to slow down the Ponzi scheme and eliminate bubbles, and the main narrative of the Solana ecosystem, Big Beta.
Q2: How can we find high-quality projects in this round of DePIN concepts? How can we distinguish whether a DePIN project has room for development and potential? How should we plan DePIN at this stage?
Kay: Two ideas. One is to make quick money from ordinary projects, with two core points: early participation and only buying coins instead of mining machines.
Another way to make money from the leading Beta in the bull market is to find a real DePIN project. You need to consider whether there are any means to eliminate bubbles, or whether it is a slowdown Ponzi scheme, in addition to the PoW mining model. Currently, I have only seen $MOBILE, which has a big enough narrative and the possibility of eliminating bubbles.
Q3: MEME on Solana will be crazier than other infrastructure projects. What do you think of this craziness? Is it reasonable? Are there other opportunities on Solana besides DePIN and MEME? Will NFT and DeFi have room for value mining?
Kay: This argument itself is flawed. Since the bull market started in October, Solana's top protocols have skyrocketed, such as NEON, Solana's Aurora, Metaplex, Solana's NFT protocol, all of which have increased more than tenfold in the past sixty days.
Solana’s main narrative is DePIN, which is determined by the founder’s background, ideas, and layout, and it is not a coincidence.
Solana founder Toly’s longest working experience was as a developer at Qualcomm, where he worked for more than ten years, including when Solana first started raising funds in 2018. The founder also said he wanted to do communications and hardware. Later, the transaction chain narrative represented by Serum and the reconstruction of SBF led to the pivot of the last round.
At first, when everyone saw Solana making a mobile phone, they all thought that this public chain would start making cars after making money. But they recruited a good team to make Solana Saga mobile phones. In addition to acquiring Helium Mobile, they also introduced DePIN protocols such as Hivemapper and Render Protocol. From a global perspective, I can't say how conspiratorial they are, but it is obvious that they have thought deeply about the direction.
I also recommend that you go back and watch the Breakpoint conference at the end of October. The Helium Mobile case was placed at the forefront and mentioned repeatedly. In addition, every project mentioned in the conference had a wonderful performance in November, either skyrocketing or announcing an airdrop.
Other opportunities for Solana Eco mainly focus on:
1. Are there any other scenarios where the architecture and performance of the main chain are not sufficient?
In the last round, this was the transaction speed of Serum. In this round, it is Helium Mobile. A US mobile communications operator and a bunch of DeFi and NFT protocols run on the same chain, which is also very magical. I don’t know what potential directions there are in the future, but this idea will definitely have a chance.
2. Pick up cigarette butts
In the last round, many Solana teams raised a lot of money and finally made some products, but they encountered the bear market and FTX crash. Now many have begun the process of rediscovering value. If the team is still delivering, participating now can get the price of private equity investors that year. There must be great opportunities here.
For example, NEON was a first-tier super king project with a valuation of 400 million yuan in the first round. However, during the bear market, FDV was only 50-80 million yuan. Investors did not cut their investment in half, but cut their investment in half. Now the rebound is very rapid. But the current price is not cheap anymore.
There are many options like this, but you should pay special attention to the fact that although it is cheap,
1. Does the project owner want to continue working or just take the opportunity to ship out?
2. How many chips do investors have left? If all are unlocked, will they suddenly open their wallets and sell at the cost range?
Q4: Why did this wave of DePIN explode on Solana? What technical features made these projects choose Solana? In addition, what are the requirements of the DePIN project for the public chain?
Kay: Solana was often criticized as a server room chain in 2021 due to dust attacks, but in fact, Solana's version of "EIP-1559" was launched in 2022, introducing base fee / priority fee. Obviously, in this round of inscription stress testing, Solana performed outstandingly. Even if we don't look at those air chains that claim to have high TPS, even AVAX, the gas was once higher than the main network. Not to mention the various "high-performance chains" that directly crashed due to RPC.
Otherwise, it’s clear that Solana’s transaction speed, transaction fees, throughput, concurrency, storage capacity, network reliability, and developer kit are all better than Helium’s own chain.
However, Solana's developer kit, including but not limited to the deployment environment, ABI and even the block browser, has a lot of room for improvement. It is still a little worse than Ethereum, but this can be made up for in the future, otherwise it might have already flipped.
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