The Rise of DePIN in Crypto

Decentralized Physical Infrastructure Networks, or DePIN, are emerging as one of the most compelling use cases for blockchain technology. At the forefront of this revolution is Helium, a protocol that is harnessing crypto incentives to build out global wireless infrastructure. In a recent episode of the Lightspeed podcast, Abhay Kumar, CEO of the Helium Foundation, shed light on how Helium is leading the charge in bringing tangible utility to the crypto space.

DePIN represents a paradigm shift in how we think about physical infrastructure. At its core, it's about using blockchain technology and token incentives to bootstrap marketplaces for physical resources. In Helium's case, this marketplace revolves around wireless networks. The concept is elegantly simple yet profoundly impactful: there's a demand for wireless coverage, and there's excess supply in the form of individual hotspots. Helium's blockchain protocol bridges this gap, allowing for rapid scaling of network infrastructure in a decentralized manner.

Helium's Journey: From IoT to Global Wireless Network

Helium's story begins over a decade ago, with roots deeply embedded in the Internet of Things (IoT) sector. The company, originally called Nova Labs, started by building comprehensive IoT solutions – from protocols and networking layers to sensors and analytics platforms. Their initial focus was on niche applications like cold supply chain monitoring, placing temperature sensors in ultra-cold fridges at medical centers and restaurants.

However, the team quickly realized a fundamental limitation: coverage. As soon as devices left a campus or specific area, they lost connectivity. This realization led to a pivotal shift in thinking. The question became: how do you incentivize the creation of a wide-reaching network that can support generic IoT applications?

Abhay Kumar explains the rationale:

"For example, if you have a package tracking application, you want to slap a sticker on the side of a box. As soon as that box leaves a depot, it no longer has any coverage. And you don't want to go ask for every single Wi-Fi AP's password along the way they're out of that package."

This challenge was particularly acute for large-scale sensor deployments. Connecting hundreds of thousands of sensors to cellular networks was prohibitively expensive. Helium emerged as a protocol to enable massive IoT applications that required minimal data transfer but ubiquitous coverage.

The Helium Network: A New Paradigm in Wireless Infrastructure

In 2019, Helium launched its first product that allowed individuals to start mining and operating hotspots. This marked the beginning of a decentralized approach to building wireless infrastructure. The network utilizes a novel concept called "proof of coverage" to bootstrap incentives.

Kumar describes the mechanism:

"When you have a hotspot that you deploy, you're sort of claiming that you're in a certain location. But you don't really know if that location is actually real, because blockchains don't know anything about the physical world. So you sort of need to introduce information about the physical world."

Initially, each hotspot ran a full copy of the blockchain and participated in a challenge-response system. Hotspots would send out beacons, and neighboring hotspots would witness these signals. This information was recorded on-chain, and if the interactions were as expected, both the beaconer and the witness were rewarded with tokens.

This innovative approach allowed Helium to rapidly deploy a vast network of IoT hotspots. In just four years, hundreds of thousands of nodes have been deployed worldwide, providing coverage in every major city. The result is what Kumar calls "the macro network for IoT" – a global infrastructure layer for low-power, wide-area networking.

The Transition to Solana: Scaling for the Future

One of the most significant developments in Helium's journey was the decision to migrate from its own Layer 1 blockchain to Solana. This move, which occurred in April 2023, was driven by the need for greater scalability and efficiency.

Kumar candidly discusses the challenges of running a proprietary blockchain:

"Carrying a pager for block production sucks. Let's just be direct about it. Running your own L1, while also building a wireless network, are two enormous problems. And they are two sort of very divergent problems as well."

The migration to Solana brought several advantages. It allowed Helium to focus on its core mission of building wireless infrastructure rather than maintaining a blockchain. The move also provided access to Solana's high-performance infrastructure and vibrant ecosystem.

One of the key benefits was the ability to leverage Solana's NFT capabilities. Helium's hotspots, which weren't originally implemented as NFTs on their native chain, were seamlessly transitioned to compressed NFTs on Solana. This implementation detail allowed for efficient representation of millions of hotspots on-chain.

Kumar highlights the importance of this transition:

"Being able to very easily migrate those wallets to Solana was actually a pretty important thing, because now there's no bridge risk, and there's no potential, like, you know, helium2.com/claim, but like, website that gets thrown up."

The migration process was remarkably smooth for users. Kumar describes it as a seamless experience where users opened their wallets one day to find they were on the Helium L1, and shortly after, they were using Solana without any additional steps required.

Helium Mobile: Disrupting the Carrier Landscape

Building on the success of its IoT network, Helium has ventured into the mobile carrier space with Helium Mobile. This innovative service, launched by Nova Labs (the original team behind Helium), aims to revolutionize how we think about cellular coverage and pricing.

Helium Mobile operates on a unique model that combines traditional carrier partnerships with decentralized infrastructure. Kumar explains:

"The bet that they're taking, which I think is a really interesting one, is that the coverage of the Helium 5G network will grow so much and so well in the cities that they're focused in, that most of the backhaul will happen on the Helium network versus the roaming partner that they have, they're working with T-Mobile."

This approach allows Helium Mobile to offer exceptionally competitive pricing. Their launch in Miami featured a $5 unlimited plan, showcasing the potential for dramatic cost reductions in cellular service.

What sets Helium Mobile apart is its focus on privacy and user experience. Unlike traditional carriers that often monetize user data, Helium Mobile prioritizes user privacy. Kumar contrasts this with typical ISP practices:

"Contrast this from like, I don't know, a typical ISP that is 100% selling like all of your usage data, right? Like is, you know, here are all the websites that people in this zip code are going to. Like, that is incredibly valuable data, you know, market research data."

Helium Mobile's approach represents a paradigm shift in how cellular services can be delivered, combining the benefits of decentralized infrastructure with user-centric design.

The Future of Wireless Infrastructure: Democratization and Efficiency

Kumar paints a compelling vision for the future of wireless infrastructure, one where access to high-quality internet is democratized and efficiently deployed. He points out the current inefficiencies in traditional infrastructure deployment:

"I saw this incredible report the other day of the cost of providing internet coverage to a sort of Native American reservation in Nebraska. It's something around along the lines of, you know, cost about $50,000 per household to bring fiber to their home. That is atrocious."

Helium's approach offers a more cost-effective and scalable solution. By leveraging a decentralized network of hotspots, high-bandwidth internet can be brought to areas traditionally underserved by major telecom companies.

Kumar envisions a future where:

"Any individual or any brand could actually build their own carrier. And this is a, this was a hot thing. And, you know, I think I mentioned I was in payments for a while. There's a hot thing in payments. Like, a company like Blackhawk would create gift cards for any brand out there. It's why when you go to like, you know, in California, you go to Safeway and you see the big wall of like every single kind of gift card out there. It's like powered by Blackhawk, you know, tremendous business. I could imagine that in five years, we'll see that any brand out there will have their own carrier."

This democratization of carrier services could lead to more innovative, tailored, and cost-effective solutions for consumers worldwide.

The Role of Crypto in Helium's Ecosystem

While Helium leverages blockchain technology and crypto tokens, it's important to note that the end-user experience is designed to be accessible to those unfamiliar with crypto. Kumar emphasizes this point:

"Most people that come to Helium don't know anything about crypto, they don't know anything about radios, but they, like, join this Discord channel, join the enclosures and off-grid channel, and, like, figure out how to put up giant antennas on their roof and post, like, stick-ass pictures of, like, where they are."

This accessibility has been key to Helium's growth, allowing it to attract users who might otherwise be intimidated by crypto complexity. The Helium Mobile app, for instance, functions as a wallet but hides the crypto elements unless users specifically want to engage with them.

Helium's Impact on the Broader Crypto Ecosystem

Helium's success in the DePIN space has implications for the broader crypto ecosystem. It demonstrates a viable use case for blockchain technology that extends beyond financial applications. Kumar reflects on the state of crypto:

"I think ultimately crypto is a tool, right? Like, and, you know, we are, I spent all of my time on Helium, right? Like I'm not really like as attuned to some of the things that are happening in another particular crypto. I think in general, you know, why do we, like, why do we use these kinds of tools?"

He emphasizes the importance of building products that solve real problems and have clear demand:

"Are you building something that people want, right? Like if you aren't, then what are you even doing? Like, why are you even bothering? Like, are you solving a problem that actually needs to be solved?"

This focus on utility and problem-solving sets Helium apart in the crypto space and provides a model for other projects to follow.

Challenges and Opportunities in the DePIN Space

While Helium has made significant strides, the DePIN space is not without its challenges. Kumar acknowledges that the network is still evolving:

"I don't think we're at a steady state yet where I could say that it's just easy to move around or easy to sort of, you know, do we have a moat? I would argue that inertia is still the strongest factor here, right?"

Maintaining and upgrading the network of hotspots presents ongoing challenges. Kumar notes the need for more consistent firmware and better tools for hotspot maintenance. He also highlights the importance of community involvement in the network's evolution:

"One thing that I really appreciate about Helium's ecosystem is we've been very involved with the community. And the community has been very involved in the evolution of the network from the beginning, right?"

This community-driven approach has been crucial in navigating the complexities of building a decentralized physical infrastructure.

The Intersection of DePIN and DeFi

While Helium's primary focus is on building wireless infrastructure, Kumar sees potential for interesting intersections with decentralized finance (DeFi). He notes:

"The other thing that I should have liked about the Solana ecosystem is that the sort of builders in the ecosystem just build shit and tell you about it after. It's like, oh, this is on Solana. I can now do this and hey, look what I just built, right?"

This builder-centric ecosystem could lead to innovative financial products built on top of Helium's infrastructure. For instance, the ability to easily integrate HNT (Helium's token) into various DeFi protocols could create new opportunities for liquidity and yield generation.

The Importance of Onchain Identity

Kumar highlights onchain identity as a crucial area for development in the crypto space:

"Things that I get excited about in crypto that have nothing to do with DePIN really probably are around things around identity. And because like ultimately identity is, you know, and there has to be like multiple ways sort of identifying yourself, right, and sort of decentralized identity is a really tough problem, I think."

He sees potential for DePIN projects like Helium to contribute to and benefit from advancements in decentralized identity solutions. This could lead to more robust systems for user authentication, reputation, and permissions within decentralized networks.

Helium's Governance Model: A Blueprint for DAOs

Helium's governance structure offers insights into effective decentralized autonomous organization (DAO) management. Kumar proudly notes:

"The amount of governance participation was higher than I've seen in pretty much any other crypto network. And it's something that I-- you know, if you look at real voting off chain and in the real world, crypto's pretty bad, just in general, right? Like, we just don't have a lot of participation. But, you know, at least within our bubble, I guess, we do pretty well."

This high level of engagement is particularly noteworthy given the diverse stakeholders in the Helium ecosystem, including hotspot operators, network users, and token holders. The foundation has even implemented governance actions specific to certain geographical areas, demonstrating the flexibility and granularity of their approach.

The Role of Oracles in DePIN

Oracles play a crucial role in bridging the gap between onchain and offchain data in DePIN projects. Kumar emphasizes the importance of layered trust in oracle systems:

"I think you need to layer the information, right? So there's like sort of a base set of information that you get, it provides you some level of trust. And you add on some more information that gives you more trust."

He provides an example of how this might work in practice:

"When a boat comes into a bay, like, you know, it's being tracked by GPS, it might have a transponder. That is information that is, you know, those are two oracles, right? Like the transponder that's on the boat, you know, could be manipulated, of course. But, you know, probably trustworthy because there's some legal ramifications to that. You know, the GPS is fairly hard to spoof, but it's doable."

By combining multiple data sources and oracles, DePIN projects can build robust systems that provide reliable real-world data to blockchain networks.

Helium's Impact on IoT and Smart Cities

Helium's infrastructure has the potential to accelerate the development of IoT applications and smart city initiatives. The network's low-cost, wide-area coverage makes it ideal for large-scale sensor deployments. Kumar gives an example:

"If you have 100,000 sensors sitting out in the field, it is incredibly expensive to connect all of those into a cellular network. So that's really like Helium came as a protocol that was to enable these kinds of very, very large applications for very, very simple data, like very small data sets."

This capability could enable everything from more efficient waste management systems to advanced environmental monitoring networks, all operating on a decentralized infrastructure.

The Potential for Blockchain in Telecommunications

Helium's success demonstrates the transformative potential of blockchain technology in the telecommunications industry. By decentralizing infrastructure deployment and management, Helium is challenging traditional telecom models. Kumar envisions a future where:

"I think Wi-Fi, where we're in this like really awesome time, I think with, with the, with the E-Sims being very, very easy to install on our phones and Wi-Fi offload actually working, you know, at scale, where you could build a carrier anywhere in the world. In fact, like any individual or any brand could actually build their own carrier."

This democratization of carrier services could lead to more competition, innovation, and ultimately better services for consumers.

Helium's Migration to Solana: A Case Study in Blockchain Interoperability

The migration of Helium from its proprietary blockchain to Solana offers valuable insights into blockchain interoperability and ecosystem dynamics. Kumar explains some of the technical considerations:

"Helium uses the Edwards curve for all of our district user wallet keys, almost all of them, but effectively 98% of them. And being able to very easily migrate those wallets to Solana was actually a pretty important thing, because now there's no bridge risk, and there's no potential, like, you know, helium2.com/claim, but like, website that gets thrown up."

This seamless migration demonstrates the potential for projects to leverage existing blockchain ecosystems while maintaining their unique value propositions.

The Future of DePIN: Beyond Wireless Networks

While Helium has focused on wireless infrastructure, the DePIN model has potential applications across various physical infrastructure domains. Kumar hints at future possibilities:

"I think there's probably a future where there's a Helium or Helium-like network that it sort of incentivizes massive backhaul projects."

This could extend to areas like energy distribution, water management, or even space-based infrastructure. The core principles of decentralized coordination and tokenized incentives could be applied to numerous physical systems.

Helium's Approach to Regulatory Challenges

Operating in the telecommunications space inevitably involves navigating complex regulatory environments. Kumar touches on Helium's proactive approach:

"We're an active conversation right now is, there are a bunch of countries in Africa that are not specified of what frequency plan they should use. We think our roles here to be an advocate for those countries and say we should use these frequencies here. We're working with local authorities to try to like, stress out, you know, what is correct there before the sort of regulatory body, sort of corporate body, sort of corporate mixed corporate early-to-year body called the LORA-WAN sort of decides here's the frequency plan for this area."

This engagement with regulatory bodies and standards organizations demonstrates Helium's commitment to responsible growth and integration with existing telecommunications frameworks.

The Role of Community in DePIN Projects

Throughout the discussion, Kumar repeatedly emphasizes the importance of community engagement in Helium's success. He notes:

"One thing that I really appreciate about Helium's ecosystem is we've been very involved with the community. And the community has been very involved in the evolution of the network from the beginning, right?"

This community-centric approach has been crucial in solving technical challenges, driving adoption, and ensuring the network evolves in a way that serves its users' needs. It provides a model for other DePIN projects on how to leverage collective intelligence and enthusiasm.

Helium's Impact on Bridging the Digital Divide

One of the most compelling aspects of Helium's mission is its potential to address the digital divide. Kumar highlights the inefficiencies in traditional infrastructure deployment:

"I saw this incredible report the other day of the cost of providing internet coverage to a sort of Native American reservation in Nebraska. It's something around along the lines of, you know, cost about $50,000 per household to bring fiber to their home. That is atrocious."

By providing a low-cost, community-driven alternative to traditional infrastructure, Helium could play a significant role in bringing connectivity to underserved areas.

The Intersection of AI and DePIN

While not explicitly discussed in the podcast, the potential synergies between artificial intelligence and decentralized physical infrastructure networks are significant. As AI systems increasingly rely on real-world data for training and operation, networks like Helium could provide the decentralized sensor infrastructure needed to feed these systems with diverse, global datasets.

Advice for Crypto Founders in a Bear Market

Kumar offers valuable advice for crypto founders navigating challenging market conditions:

"Figure out where to cut costs, figure out where to survive and figure out where where you can like continue to build. That is the place that, you know, we all need to be because they sort of ignore the macro cycles."

He emphasizes the importance of focusing on real problems and building products that people actually want, regardless of market conditions.

The Future of Wireless Technology and Helium's Role

Looking ahead, Kumar paints an exciting picture of the future of wireless technology:

"I could imagine that in five years, we'll see that any brand out there will have their own carrier. You know, Mr. Beast might have a carrier, which is crazy."

This vision of democratized, branded carriers powered by decentralized infrastructure represents a radical shift in how we think about telecommunications. Helium is positioning itself at the forefront of this transformation, leveraging blockchain technology to create a more open, efficient, and user-centric wireless ecosystem.

In conclusion, Helium's journey from an IoT-focused startup to a leader in the DePIN space offers valuable insights into the potential of blockchain technology to transform real-world infrastructure. By combining innovative tokenomics, community engagement, and a focus on solving genuine problems, Helium is not just building a network – it's pioneering a new model for how we deploy and manage critical infrastructure in the 21st century.

Facts + Figures

• Helium started in 2013-2014 as an IoT company, focusing on building comprehensive IoT solutions.
• In 2019, Helium launched its first product allowing individuals to start mining and operating hotspots.
• The Helium network has grown to include hundreds of thousands of nodes deployed worldwide in just four years.
• Helium migrated from its own L1 blockchain to Solana in April 2023.
• The migration to Solana involved moving approximately 700,000 wallets and 900,000 hotspots.
• Helium Mobile launched a $5 unlimited plan in Miami as part of its initial rollout.
• The Helium community Discord channel has over 100,000 members.
• Helium's governance participation is noted to be higher than most other crypto networks.
• Helium uses the Edwards curve for about 98% of its user wallet keys.
• The cost of providing internet coverage to a Native American reservation in Nebraska was reported to be around $50,000 per household for fiber installation.
• Helium's IoT network uses the LoRaWAN protocol, which operates in the sub-gigahertz spectrum (900 MHz in the US, 868 MHz in Europe).
• LoRaWAN packets can travel very long distances and typically contain 23-24 bytes of data.
• At scale, 100,000 messages on the Helium network cost approximately $1.
• Helium's "proof of coverage" concept involves hotspots challenging each other and witnessing beacons to verify network coverage.
• Helium Mobile operates on the CBRS (Citizens Broadband Radio Service) spectrum in the US.

Questions Answered

What is DePIN and how does Helium fit into this category?

DePIN stands for Decentralized Physical Infrastructure Networks. It's a concept where blockchain technology and token incentives are used to bootstrap marketplaces for physical resources. Helium fits into this category by using crypto incentives to build out global wireless infrastructure. The Helium network allows individuals to deploy hotspots that provide wireless coverage, creating a decentralized network for IoT devices and, more recently, mobile phones.

How did Helium transition from an IoT-focused company to a decentralized wireless network?

Helium started as an IoT company in 2013-2014, building comprehensive solutions including protocols, networking layers, sensors, and analytics platforms. They initially focused on specific use cases like cold supply chain monitoring. However, they realized the need for widespread coverage to support generic IoT applications. This led to the development of the Helium protocol, which incentivizes individuals to deploy hotspots and create a decentralized wireless network. In 2019, Helium launched its first product allowing people to mine tokens by operating these hotspots.

Why did Helium migrate from its own blockchain to Solana?

Helium migrated from its proprietary blockchain to Solana in April 2023 for several reasons. Running their own Layer 1 blockchain while also building a wireless network proved to be two enormous and divergent problems. The migration to Solana allowed Helium to focus on its core mission of building wireless infrastructure rather than maintaining a blockchain. Solana's high-performance infrastructure, vibrant ecosystem, and NFT capabilities (used for representing hotspots) were key factors in the decision. The move also eliminated bridge risks and simplified the user experience during the transition.

What is Helium Mobile and how does it differ from traditional mobile carriers?

Helium Mobile is a new kind of carrier built on top of the Helium network. It combines traditional carrier partnerships (like with T-Mobile for roaming) with decentralized infrastructure provided by Helium hotspots. Helium Mobile aims to offer more competitive pricing (like their $5 unlimited plan in Miami) by leveraging the growing Helium 5G network. Unlike traditional carriers, Helium Mobile prioritizes user privacy, avoiding the common practice of selling user data. It represents a new model for cellular service that could potentially allow any brand or individual to become a carrier in the future.

How does Helium's governance model work and why is it significant?

Helium's governance model is notable for its high level of community participation, which is reported to be higher than most other crypto networks. The model allows for diverse stakeholders - including hotspot operators, network users, and token holders - to have a say in the network's evolution. Helium has even implemented governance actions specific to certain geographical areas, demonstrating flexibility and granularity in decision-making. This community-driven approach has been crucial in navigating the complexities of building a decentralized physical infrastructure and provides a potential model for other DAO (Decentralized Autonomous Organization) structures.