Author | Heimi, Bai Ze Research Institute
An emerging field is emerging in Web3 - DeWi, or decentralized wireless.
By establishing an incentive mechanism based on blockchain technology, with the help of the "power of the masses" or network operators to provide hotspots, users can create and manage decentralized wireless networks in a trustless, permissionless and programmable manner, rather than being operated by a single, centralized telecommunications company.
Among them, projects such as Helium, Karrier One, Pollen Mobile, and Hexagon stand out.
But what if I told you that there is a DeWi project with 4 million monthly active users, over 150 million product downloads, and a 4.6 rating on the App Store by over 2 million people?
Many people may find this hard to believe, but it is true.
This is the WiFi Map of the public hotspot network that transitioned from Web2 to Web3 in the first quarter of this year.
WiFi Map’s Past: No Marketing, But Going Global
WiFi Map was founded in 2014 with the goal of being a "community-driven wireless network and self-funded startup." Co-founded by Denis Sklyarov (CEO) and Igor Goldenberg (CTO), it has now grown to around 30 team members worldwide.
Denis and Igor worked together at Kenlo Group, an award-winning mobile application software development company, until they realized that a large number of people were unable to travel the world without a reliable internet connection.
At the time, people would scour Foursquare, Facebook, Tripadvisor and other platforms for details on their travel destinations to find out ahead of time if WiFi was available. This was essential for budget travelers, as mobile data was very expensive at the time.
After seeing how users on some platforms were happy to share this information with strangers without expecting anything in return, they came up with an idea: What if all this information was centralized on one app so people could access it quickly and easily?
The early WiFi Map came into being, and as co-founders, the two could earn $300 in application revenue per month.
However, because WiFi Map is driven by a community of travelers and people in countries with insufficient network infrastructure, when they added the "Add WiFi" button, many people began to voluntarily add hotspots. Since then, WiFi Map has added more "user services", such as WiFi global hotspot maps (viewable offline), eSIM plans (mobile data when WiFi is not available), VPN services and network speed tests. It has been quickly adopted in low-income countries such as Indonesia and India.
Eventually, this community of contributors became an influential army, with the founders sharing behind-the-scenes development of the app, and the community talking about WiFi Map on Twitter and other social platforms.
WiFi Map went global without any marketing.
Over the next 8+ years, WiFi Map built a powerful two-sided economy around hotspot sharing and privacy. They have incentivized over 13 million contributors to add over 100 million WiFi hotspots through an in-app “points” system that gives contributors discounts on their purchases.
The end result of this “token-free” DeWi project is that they are now serving 150 million users in over 200 countries around the world.
The core of WiFi Map is still "connectivity", just like other DeWi networks we see today. However, instead of incentivizing participants to deploy hardware to build new networks, they leverage existing infrastructure (public/private WiFi hotspots, local cell towers) and improve the ease with which users can access them.
This model puts WiFi Map into a positive spiral:
More downloads of your app = more contributors and users
More contributors = more mapped WiFi hotspots
More contributors + more WiFi hotspots = increased app value
More apps = more advertisers
More advertising revenue = expanded user services
Expand user services = more downloads
WiFi Map’s Now: Boosting Annual Revenue Through Three Channels
WiFi Map currently generates about $650,000 in in-app revenue per year, according to Data.ai.
According to public information, they are increasing or hoping to increase revenue through the following three channels:
1. Paid subscriptions for additional services (core product remains free)
There are three paid subscription services, "Pro", "VPN" and "Pro+VPN", and there are differences in price between monthly and annual payments.
Here we make a simple calculation, assuming that all paying users have chosen the highest level "Pro+VPN".
Assuming that the $650,000 in monthly revenue is primarily attributable to paid subscriptions, that’s roughly 18,500 paying customers. ($650,000 / $35 subscription = 18,571 paying customers)
PS: Some users may have chosen cheaper subscription services, so the total number of users in reality may be higher.
As an app with 150 million total users and only ~18,500 paying customers, WiFi Map currently generates $650,000 in revenue per year, but as WiFi Map continues to grow, revenue could grow to $6.5 million per year if paying customers grow tenfold (≈185,000).
2. In-app advertising
Advertisers such as restaurants and stores can pay to be featured on WiFi Map's hotspot maps. While WiFi Map doesn't currently monetize this way, it plans to do so in the future.
Google is the world's largest advertising-based company in 2022 by revenue. Google's CPM (cost per thousand views) for 1.5 billion ad impressions and 42 million pageviews in the second quarter of 2019 was about $40. CPM stands for cost per thousand pageviews.
So WiFi Map’s 4 million monthly active users / 1,000 = 4,000. 4,000 * $40 (CPM) = $160,000 in monthly ad revenue = $1.92 million in annual ad revenue.
That is, based on the current number of users, WiFi Map’s advertising revenue for one year is approximately $1.92 million.
3. Integrate third-party services
There is not much public information about this channel at present, and it is possible that WiFi Map will cooperate with companies in other industries in the future.
WiFi Map can integrate third-party services from other companies to provide more convenience for users. For example, Uber taxi, hotel reservation, travel reservation, and car rental can be integrated into WiFi Map.
In this case, let’s assume that WiFi Map uses a commission structure and only charges commissions to customers who order third-party services within the app. The commission percentage for third-party services such as hotels, car/motorcycle rentals, travel agencies, etc. generally ranges from 10-17%.
Then the simple calculation is as follows:
Assume that 10% of the 4 million monthly active users spend $10 per month on third-party services. 400,000 monthly active users * $120 per year in spending * 10% commission = $4.8 million in commission income per year.
In summary:
WiFi Map’s estimated annual revenue from the three channels above, without user growth = $7.37 million.
If the number of users grows 10x, that number = $73.7 million.
The app received approximately 1.85 million downloads from Google Play and Apple App Store between February 15, 2023 and March 15, 2023, an increase of approximately 20% month-over-month. While not all new users will become active users, this is a solid path for WiFi Map to grow its user base 10x.
So, at this point you may be wondering, since WiFi Map has so many revenue advantages, why did it turn to Web3? Think about one of the factors that made them successful - the community.
The Future of WiFi Map: Jumping from Web2 to Web3
The development of the WiFi Map ecosystem is inseparable from the support of the community.
Although WiFi Map developers have introduced many convenient features for users, the key to growth lies in the community members voluntarily "adding hotspots" in exchange for dispensable "points".
Whether it is to continue to attract more users to use the App or to incentivize community members to increase the coverage of hotspots, it seems necessary for WiFi Map to turn to Web3 and become a sustainable, self-sufficient decentralized hotspot network.
In the summer of 2022, WiFi Map announced that it would launch a native token $WIFI on the Polygon network, replacing "points" as a store of value, unit of account, and medium of exchange. It should be noted that previous "points" cannot be exchanged 1:1 with $WIFI tokens.
In fact, tokens are not the first choice for WiFi Map, but payment methods such as PayPal are too expensive, and many countries do not accept them.
Igor Goldenberg，WiFi Map CTO：
Before we had the idea for the $WIFI token, we wanted to incentivize those who made the most significant contributions, but we ran into some technical issues. For example, we looked at PayPal, but the fees were astronomical and there were many countries that didn't accept it. Crypto is a universal, lightweight technology that can be accessed anywhere in the world. We know that some people will decide to use it as a speculative tool, and we have no problem with that, but for us, it's a great tool that gives us the utility we need.
$WIFI was launched and distributed to incentivize community members to map new WiFi hotspots, refresh old ones, and can be used to exchange for desired services on the App.
In addition to the staking function that most native tokens of general applications have, the highlights of $WIFI are:
1. WiFi Map allows users to receive 15–20% of the value of their $WIFI purchases in the app as tokens. More interestingly, spending in the app with fiat currencies will receive 3–5% tokens. This is a broad token distribution mechanism that allows more users to get $WIFI.
2. When a user uses $WIFI to purchase an eSIM mobile data package, $WIFI will be locked. When the package expires, $WIFI corresponding to the amount of unused mobile data will be refunded to the user.
3. Tip contributors who provide hotspots in the App
4. For governance. Given that the team has successfully incentivized millions of contributors over nearly a decade, I’m sure they listen to feedback from those who use their application every day.
In addition, WiFi Map will also strive to become a decentralized network that includes gamification, and may cooperate with other projects on the Polygon chain to add the ability to collect NFTs and other gamification elements to the WiFi Map hotspot map.
The total amount of $WIFI is 1 billion:
31.5% for ecosystem rewards and development
20% deposited in the national treasury
18% allocated to the team and advisors
13% allocated to private and public investors
10% for liquidity
7.5% for marketing
In March of this year, WiFi Map sold 8.83% of $WIFI to private investors at a price of $0.0125 per token, raising approximately $1.1 million in funding.
On March 30th, they held a public sale of 4.17% of $WIFI at $0.025 per token, raising ~$1 million more.
Proceeds will be used to expand the development team, increase in-app features and services, and “make strategic acquisitions when deemed best.”
Conclusion
WiFi Map's mission is to democratize the Internet.
It’s an application built by the Web2 community that has entered the Web3 industry with 150 million application downloads and over 100 million internet hotspots.
Broaden income channels + expand more user-friendly services + Web3 incentive mechanism = help WiFi Map reach its peak = raise the height of Web3
WiFi Map’s journey to Web3 also shows us that even successful Web2 companies can thoughtfully launch tokens, especially in a bear market, to promote growth and build their own mini-economy.
Risk Warning:
According to the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" issued by the Central Bank and other departments, the content of this article is for information sharing only and does not promote or endorse any business or investment activities. Readers are requested to strictly abide by the laws and regulations in their area and not participate in any illegal financial activities.
References:
https://globalcoinresearch.com/2023/03/29/wifi-maps-embraces-crypto-for-next-phase-of-growth/
https://medium.com/wifi-map/interview-igor-goldenberg-co-founder-cto-at-wifi-map-fc112650a254