Introduction

Howdy! Web3 is helping pay for both my coffee and my cell phone plan. The latter is the subject of today’s newsletter. Who said the millennial lifestyle subsidy was dead? — Jack Kubinec

Helium Mobile Overview

Nationwide Cell Plan

It’s been more than five months since Helium Mobile debuted its nationwide cell plan, one of the most ambitious applications of what crypto folks call DePIN (decentralized physical infrastructure) to date. For $20 a month, Nova Labs, the developer behind the Helium Network, began offering US residents unlimited data plans. Helium Network participants run hotspot nodes that emit cellular coverage, and they’re paid in Solana-based MOBILE tokens for operating these miniature cell towers. In places where no Helium data is available, Nova Labs purchases coverage from T-Mobile. The product has gained nearly 90,000 subscribers since its launch, including this newsletter writer.

Nova Labs CEO Amir Haleem told me these growth numbers are solid when put in context. “It looked like in all of last year, AT&T, Verizon, and T-Mobile only added something like 300-400,000 subscribers combined,” Haleem said, adding that Helium Mobile hopes to reach 300,000 subscribers by the end of the year. Publicly available data seems to tell a different story: AT&T, Verizon, and T-Mobile each reported millions of new subscribers last year. Nova Labs did not immediately return a request for comment on the discrepancy.

Subscriber Growth

As a user, I’ll say Helium’s coverage has been as good as any of my past cell carriers. Recently, I enabled discovery mapping, where Helium Mobile pays MOBILE tokens in exchange for location data in order to determine where it needs to create more coverage. On my first day, I earned $0.78-worth of MOBILE — or roughly ½ of a slice of pizza, in New York terms. But there’s a question that’s followed the Helium Network for a while now: Can this make money?

Nova Labs added another revenue stream in January when it partnered with the Spanish telecommunications company Telefónica. The company is offloading some of its mobile data in parts of Mexico to the Helium Network. As data usage increases globally, a new network like Helium’s could prove valuable to data providers. Still, the sustainability of the network’s MOBILE token-based incentives are something of an open question. MOBILE’s price leapt more than 2,000% right after Helium Mobile went nationwide in December, according to CoinGecko. Helium Mobile has yet to face a serious stallout in subscriber growth, which could potentially put downward pressure on the token price.

Haleem thinks that the inefficiencies in legacy cellular coverage make Helium an “obvious” application for DePIN. “It’s just wildly too expensive to keep deploying infrastructure the way it’s being deployed,” Haleem said. “It’s hundreds of billions or trillions of dollars to deploy towers all the time. It doesn’t make any sense.”

Challenges and questions

Coverage and user experience

Helium Network, often synonymous with innovation in decentralized physical infrastructure (DePIN), has ushered in a new era by expanding its data coverage through a unique hotspot node mechanism. Let's get one thing clear: Helium's coverage has impressed many users, including this newsletter writer, who reports no discernable drop in service quality compared to traditional cell carriers. If Helium were a contestant in 'America's Got Talent,' it'd surely be getting some encouraging nods. But, and here's the kicker, how sustainable is it really?

While the subscriber numbers look promising at around 90,000 since January, scaling the network to broader urban and suburban landscapes poses a significant challenge. For now, Helium piggybacks on T-Mobile’s network when its own coverage lags, but this safety net may not hold indefinitely. Could this reliance on an external provider become a choke point if T-Mobile decides to renegotiate terms? It’s a bit like showing up at a party with snacks you didn’t actually make yourself. But props for the effort, right?

One thing worth a chuckle is the introduction of "discovery mapping." Imagine getting paid for driving around and pumping location data back to Helium. First day on the job? You've made a whole 78 cents. Not bad, considering that amounts to roughly half a slice of New York pizza. The system even compensates for dead zones, guiding where nodes need to crop up next. But hey, a half-eaten slice might not be enough motivation for everyone. It raises the question of whether user rewards are sufficient to maintain long-term interest and commitment.

Sustainability and revenue

Let's face it, every bright idea needs some serious cash flow to stay afloat, and Nova Labs, Helium's developer, knows this all too well. Since its launch, there has been a lot of chatter around the sustainability of the MOBILE token-based incentives. Right after the network went nationwide, MOBILE's price saw a colossal 2,000% spike. That’s the kind of rollercoaster that would make even the boldest investor clutch his pearls. While Helium Mobile has managed to avoid a major stall in subscriber growth, the pressure on token prices remains a matter of speculation.

The partnership with Telefónica in January has provided an additional revenue stream. Now, Helium is offloading some of its mobile data in parts of Mexico through this Spanish telecommunications giant. This collaboration has the potential to be a game-changer, as global data usage continues to surge. But let's not forget, we're still gambling on the MOBILE tokens keeping their value. Haleem, Nova Labs' CEO, argues that traditional methods for deploying cell towers are becoming financially unsustainable. Sure, throwing in words like 'trillions of dollars' does add a dramatic flair, but it holds water. Or does it?

The persistent question of making Helium an "obvious" candidate for DePIN must be backed up with more than promising subscriber numbers. The inefficiencies in legacy cellular models could certainly make Helium's model enticing, but investor patience might wear thin if clear, consistent returns don't materialize sooner rather than later. No one wants to be in the business of selling half slices of pizza.

Recent developments

Telefónica partnership

January brought a ray of sunshine with Helium partnering up with Telefónica. This union isn't your typical corporate marriage; it's more of a strategic alliance with tangible benefits. Telefónica offloading some of its data operations to Helium in parts of Mexico could indeed be a significant revenue source. As data needs grow globally, leveraging Helium's decentralized model could offer a cost-effective alternative for traditional telecom giants. However, the partnership's success relies heavily on how seamlessly Helium can handle increased data traffic without buckling under pressure. Does Helium have it in them? It’s like asking a sprinter to run a marathon; speed and endurance are two different ball games.

The deal aligns with a broader trend of legacy telecommunication firms exploring synergies with blockchain technology. For Telefónica, it's an experiment in flexibility and efficiency, while for Helium, it's a golden ticket to legitimacy in a highly competitive market. Still, one must wonder if Nova Labs can put all its networking eggs in the blockchain basket. The effectiveness of this partnership will be a test of Helium’s innovative edge, highlighting whether decentralized networks can truly match, or even surpass, their traditional counterparts.

Helium improvement proposal 113

Enter stage left: Helium Improvement Proposal 113 (HIP 113), the latest buzz in the community, aimed to reroute rewards to Wi-Fi hotspots at the expense of CBRS radios. Think of it as Helium’s way of rewarding the right kind of behavior, and ensuring efficient coverage. On paper, HIP 113 looks like a masterstroke. For a network that relies heavily on community participation, offering substantial rewards for operating nodes ensures coverage gaps are minimized. On May 10, this proposal led to a spike in the number of newly minted NFTs, signaling a boost in user enthusiasm. Minting 837 new NFTs in a single day underscores the proposal's immediate impact.

The market responded well, but the real question is—how long will the magic last? Just like in every reality TV show, there’s always the initial hype, only to fade into obscurity if the content doesn't hold up. Similarly, while HIP 113 has incentivized users today, keeping that excitement alive will depend on continuously improving the service quality. It's about giving users a reason to stay beyond the shiny rewards, making Helium an indispensable part of their daily digital experience.

The proposal is a double-edged sword. It incentivizes Wi-Fi over CBRS, theoretically leading to more cost-efficient coverage, but it may also limit the versatility of the network. The primary goal remains to enhance reliability and incentivize participation. However, this balance must be carefully monitored to avoid user attrition, as fickle as blockchain enthusiasts can be.

Market Impact

So, Helium's been having a bit of a party lately, expanding their subscriber base like a champ at an all-you-can-eat buffet. With nearly 90,000 subscribers hopping onto their $20-a-month unlimited data plan, Helium is making some serious waves. And let's not forget, these subscribers are not just from anywhere — these numbers are US residents who are diving into the decentralized physical infrastructure network like it's the latest and greatest tech fad. It’s as if they handed out free avocado toast with every sign-up.

However, the real kicker is the monetary side. Nova Labs, Helium's overlord, is not just depending on their own coverage. They've shaken hands with T-Mobile for extra coverage during the lean times. Plus, they’re raking in the dough by partnering with Telefónica in Mexico. It's like they're double-dipping their nachos, and who wouldn’t want double the dip, right? Now, there’s been some eyebrow-raising around the number of new subscribers compared to telecom giants like AT&T and Verizon. While Helium talks about 300,000 new faces, the big dogs are mentioning millions. Either Helium’s holding a secret concert or someone’s counting sheep instead of subscribers.

Solana vs Ethereum

Ah, the classic showdown: Solana vs Ethereum. It's the blockchain equivalent of Batman vs Superman, but with fewer capes and more nerdy debates. On May 12, Solana decided to steal the limelight from Ethereum by surpassing it in daily economic value. We’re talking $2.25 million to Ethereum's $1.98 million in transaction fees and MEV. Naturally, this got the community bubbling like a pot of spaghetti sauce. They couldn’t help but wonder, "Did Solana just drop the mic on Ethereum?"

In a juicy twist, some folks chimed in noting that Ethereum's L2 solutions might be working so well that it's making its L1 look like it’s on a diet. This brings up a spicy debate - if your babysitter becomes so good that the toddler stops bothering you, do you say the toddler is less active? That's essentially what's happening here. Solana’s fans argue that this mirrors some missed potential on Ethereum's side, while Ethereum's fans prefer to think of it as a sign of strategic success.

Developer and User Interest

Now, behind the curtain of tech talk, there's another layer: the brains and brawn behind these networks — developers and users. Solana’s been the belle of the ball lately, attracting talent faster than a coffee shop giving away free espresso shots. Mert Mumtaz, co-founder of Helius, noted the tug-of-war going on for Solana developers. It's like rival nations trying to lure away each other’s top spies, only less cloak-and-dagger and more keyboards and screen time.

Over at Ethereum's camp, it’s a game of maintaining its OG appeal while making sure they don’t lose their base to the sparkly allure of Solana. The valuation of these networks adds another spicy flare to the conversation. With Solana still sitting under Ethereum's towering market cap, some folks see this as room for a potential rocket-ship-like rise in value. Others, however, worry about whether Solana can really keep the momentum going or if it's just a flash in the pan. The sentiment is a cocktail mix of hope, skepticism, and some genuine excitement for what comes next.

Conclusion

In the grand theatre of Web3 drama, Helium is making waves with its innovative approach to cell service, while the classic stage battle between Solana and Ethereum continues to captivate the audience. Helium’s reaching for the stars, increasing subscribers, and expanding partnerships like it’s on a mission to Mars. Meanwhile, Solana and Ethereum keep the crowd entertained with their back-and-forth moves. It's a story of growth, potential, and a constant hustle in the crypto cosmos. Stay tuned, popcorn in hand, because this show is far from over!