Andrena - The DAWN of DePIN?: What You Need to Know
Proof-of-Bandwidth, Multipoint Internet Connectivity, & More
With markets looking healthy, it’s easy to get caught up refreshing token prices, and neglecting the actual narratives and trends that drive the industry, some of which don’t actually have liquid token opportunities at this time. DePIN stands out as one of the leading sectors in this regard, with many interesting protocols having been established relatively recently. The lack of a liquid token shouldn’t discourage investor interest, as these protocols can indicate where crypto is headed, and many of these projects will launch their own tokens later down the line anyway, as a core component of their DePIN offerings.
Last week, we covered Dabba, which is specifically focusing on providing high-speed internet connectivity in India through DePIN. We’ve gotten good feedback on our DePIN coverage, so today we’re keeping it going with Andrena. Andrena is perhaps a bit less popular than the established or emerging DePIN players on Solana, but its goals are just as ambitious. Andrena, through its Decentralized Autonomous Wireless Networks (DAWN) protocol, is looking to make internet connectivity easier.
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Background on Andrena
Andrena is the team behind DAWN, which recently raised $18 million led by Dragonfly.
To understand Andrena, a basic understanding of how the Internet works and how connectivity is provided to individuals. This process consists of 3 tiers:
Tier 1: This includes subsea fiber optic cables and data center interconnections.
Tier 2: Regional fiber providers like Crown Castle.
Tier 3: Local distributors like Andrena, Comcast, and Verizon. These providers distribute internet within specific markets or regions.
Andrena operates in this third-tier, arbitraging the cost difference between what individuals pay and what wholesale internet and data costs in tier 1. Andrena does this by going right to the data centers and beaming data down to individuals and consumers right from the roof of the data center. Where Andrena differs from something like Starlink is the fact that it costs a lot of money to launch satellites into space, which is what Starlink does. Andrena’s DAWN does not require anywhere near the same level of upfront capital, instead building out coverage slower and more aligned with demand, as opposed to sinking huge upfront costs and potentially having to wait years for enough users to subscribe. Andrena can begin bringing in revenues and profits right from the get-go.
The way Andrena works is that the protocol has its users install antennas on their roofs, which are part of a point-to-multipoint system, with the primary point being a data center beaming data to various users nearby. Andrena’s users consist of various types of property owners including REITs, single-family homes, housing authorities, and new construction developers.
This is the current business model; the DePIN side of things is introduced through DAWN, which provides decentralized broadband. DAWN allows people to share excess bandwidth efficiently, regardless of whether they’re a household, data center, or internet provider. Neil Chatterjee, Founder of Andrena, compares DAWN’s vision to what solar panels did for electricity, aiming to give consumers ownership of their internet infrastructure with a non-speculative ROI and a much faster payback period (6-12 months) compared to solar panels (5-6 years).
For DAWN users, this basically ends up being an upfront cost of ~$200-$1000, with monthly payments after this initial hump being just ~10-$20. This is an 80-90% drop from the typical ~$100 payments many make each month for their internet connectivity. This is attractive for obvious reasons, as users could likely recoup their ’investment’ within just 2 or 3 months of setting up this infrastructure in the first place. The reason for the cost savings here is sort of the same as Andrena but more pronounced; the upfront costs of setting up infrastructure are not nearly as high as traditional Internet Service Providers (ISPs) because the infrastructure is established as demand grows.
With DAWN specifically, each user is buying the infrastructure themselves, so the new infrastructure isn’t even built unless there is a paying customer ready to establish it themselves. DAWN’s infrastructure is also carrier-agnostic, allowing users to work with any provider across the decentralized network.
As mentioned above, DAWN uses the excess bandwidth of network participants and reroutes it to end users. This might sound sort of similar to Grass protocol, which also harvests unused internet. The difference here is that Grass protocol uses this bandwidth to webscrape, while DAWN looks to just distribute this bandwidth to other people, and give them a much lower price.
How does crypto play into all of this? DAWN introduces ‘Proof of Bandwitdh’ (PoB); users run nodes to validate the fact that there is indeed enough spare bandwidth from a given provider to share with others. The project does incorporate token incentives into its growth model, though this isn’t as necessary as it might be in other protocols, because there is an existing business in Andrena which has a lot of infrastructure overlap with DAWN.
Andrena’s Founder, Neil, has an extensive background in academic robotics. He also spent time at Meta (then Facebook), to build a mobile-data sharing protocol, which could allow people in the same proximity to share data between each other if one person’s data was better than the other’s. This is sort of like a hotspot, though the protocol could allow people to pay in crypto. Andrena is already a successful business without the crypto aspect present, which DAWN focuses on. Andrena serves of 10,000 households across 10 different states.
This ultimately culminated in the inception of DAWN. While not always necessary, having a Founder who has extensive experience building products in the same DePIN wheelhouse that aren’t dependent on the crypto or tokenomics aspect is a big plus. At the end of the day, the crypto part of DePIN might not always be a prerequisite, more like an icing on the cake, enabling easier methods of payment or incentives models that favor a scrappy startup over an incumbent big tech company, ISP, etc.
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