On The Brink with Castle Island - Amir Haleem (Nova Labs) on Helium, DEPIN, and DeWi (EP.437)

Episode Date: July 10, 2023

Amir Haleem, the founder of Nova Labs (formerly named Helium, Inc) joins the show. In this episode we discuss: The origin of Helium and the Helium network Amir's views on L1 blockchains and the path that the company took in evaluating building its own chain versus building on an existing L1. Decentralized Physical Infrastructure (DEPIN) and Decentralized Wireless (DEWI) as emerging categories demonstrating real-world applicability of public blockchains. The various tokens in the Helium ecosystem and how they interact. MVNOs and how Helium Mobile is positioned. The regulatory landscape in the United States and how Helium has navigated these waters. To learn more about Helium visit: helium.com/

Today on the podcast, I sat down with Amir Halim, the co-founder and CEO of Nova Labs, the developers of the helium network. In this episode, we discussed decentralized physical infrastructure, the decentralized wireless space, and the potential for distributed technologies to disrupt the MVNO market. I think you'll enjoy this one. So without further ado, here's my conversation with Amir Halim. Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests and hosts may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion.

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You've printed a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin. Amir, well, thanks so much for joining us today on the podcast. Thanks for having me. Well, we'd love to just start off with a quick history of Nova Labs and maybe your path into this crypto industry. Yeah, I think we took an unusual path. So Nova Labs used to be a company called Helium Systems Inc.

We started the company in 2013, which is over a decade ago. And our mission really was to try and build long-range sensor networks. Like that's what we thought the biggest problem was at the time in 2013 was people were talking about the internet of things or IoT. And the imagination of IoT was just like sensors everywhere. So imagine like that scene in Twister or whatever where they're just like throwing sensors up into this tornado. That was sort of the imagination of not just us, but the industry at the time and VC and just sort of everyone in telecom was like, they're just going to be this explosion of sensors

everywhere. And our point of view was like there isn't really a good either network or protocol designed for that kind of stuff. Like you had cellular, which is good for phones, but relatively expensive at the time and high power consumption and things like that. And then you had Bluetooth, which was good for low power consumption, but also didn't have any range. We thought there was this gap. And that was the mission of the company, was really to try and build networks designed for those kinds of applications. And it took us a long time sort of experimenting with different approaches of how to do that. The initial approach was sort of like a hybrid of a community-built network combined with a first-party built network. So we would do some of the network building as well.

But there wasn't enough incentive on the community side to really make it work. Our hope was that this big flourishing developer community would form, and that would also be a little bit of the backbone of the network. I think what we realized over time and where crypto helped us was that what's difficult about those community networks is that you need some sort of distributed or permissionless or decentralized economic system. People want to get paid basically for the work that they do. If you set up an IoT gateway and you transfer a bunch of packets, you need to get paid for that. And that was, I think, the thing, that was really the most exciting about the crypto idea when we landed on it in 2017. So like

four years later, really, we ended up on that path was that there was a way both to motivate the initial build out of the network, but also to have this coordinated economic system without needing to know who the parties are. Anyone could sort of join in and participate. And that was what led us there. And the file coin white paper, as I kind of mentioned in other podcasts and shows, was like really an important thing for us because it was the first time that we'd seen like a really credible team building something that was designed for a specific purpose. It wasn't like a general purpose, money platform or a smart contract platform or something like that. It was like designing files and incentivizing people to make file storage available.

And that for me was the first time I was like, you could actually do this. You could actually do something like this. And that's where the idea of what is now helium was born. That's amazing. I guess it was one of these things where the technology didn't really exist yet from the crypto perspective to build what you guys were trying to build, and eventually there's some sort of a convergence that unlocked this opportunity. Frankly, even when we started building, which again was about 17, there wasn't much available in terms of infrastructure. Like you had Bitcoin, of course, you had Ethereum, but it was always going to be difficult

for us to fit something as complicated as helium into the structure of Ethereum, especially the cost. And I think that's still true today, although things are slightly improved. So we ended up building our own L1 blockchain for helium. And that was good and bad. It was good in the sense that I'm not sure how else we could have done it. Maybe there were ways, but it was bad in the sense that it was an enormous amount of engineering work

and continued to be an enormous amount of engineering work until very recently. You sort of end up on an island on your own to some degree, right? Like you don't get to participate in all the cool DFI stuff like Uniswap or Jupiter or whatever. And everything is just more complicated, like wallet support and exchange support And all of that has to be bespoke for your very custom blockchain implementation. And so things have definitely changed and improved now. I think that's part of why this migration to Solana that happened recently made sense, was that the infrastructure had sort of caught up to the requirements.

But at the time, certainly, we didn't think it could be done anywhere else. Well, I'd love to get into that. But maybe before we do, listeners have probably heard of D.Y and maybe D-PIN, but maybe we could just get into a little bit about what these categories are and what you guys are actually building as a company. Yeah, so it's become a named a bunch of stuff. I mean, DY was actually a name that we came up with, and there was a foundation initially called the Decentralized Wireless Alliance. D.Y was an invention of ours as a name. But what we were really focused on trying to do was, in our case, really all about building wireless networks, like physical networks, but really it could be applied to lots of different things, which I think is what you're seeing now. So this category is now called D-PIN, which is, I think, decentralized physical infrastructure networks.

And I think helium was probably the first of those. I mean, Filecoin arguably, but a lot of that lived in data centers. And so I think helium was really the first example of here's a real world physical application that conducts its economics via a blockchain, but really is about network construction and network building in the physical world and really took off. The devices that build the network or that caused the wireless network coverage in helium were called hotspots. There was about a million of them sold. About half of those are still currently online. and doing work, and they create a wireless network that sensors can use. And so it was explosive. I mean, it's literally everywhere around the world. I think some crazy percentage of US zip codes are covered by helium and was a phenomenon, really. And I think the first time that anyone had seen this idea of real-world stuff that attached to a blockchain, and typically they call this like the Oracle problem or the meat space problem or whatever you wanted to call it, but it was really, how do you verify and prove that things are happening like off-chain? Something's in the real world.

If I say I have a hotspot at my house, how is that proven and how does that make its way back to a blockchain? That's really the hard part of the problem. The ways to solve it are nuanced and complicated was the start of it. It was like we wanted to solve a particular problem that we thought existed, which was like there needs to be a big wireless network. It didn't make economic sense for a single company to try and do that because you end up spending hundreds of millions or billions of dollars.

So in my mind, the purpose of something like Deepin is to distribute the costs and the reward to a community of people rather than belong to a single entity. And I think there's a lot of upsides to that, some of which are economic, but others are privacy and security and resilience and stuff like that. It amazes me the crypto community just loves these physical objects too. So I think the fact that you guys were so early to being a quote unquote real world use case, it just saw a ton of backlog. I don't know if it's still backlog, but it seems like there's tremendous momentum to just buy it. access to the network? It goes up and down. I think as the crypto markets boom and bust, you see these cycles of excitement and then it sort of goes quiet for a while. And when we launched Helium in 2019, the crypto version of helium, it was also a very bad time for crypto. The ICO

markets had just kind of imploded and there was a bunch of regulatory crackdown correctly in that case. There was a lot of scams and a lot of bad actors, I think, in the ICO period. Crypto was kind of toxic then. We couldn't get anyone to write about helium, like no one wanted to be associated with any crypto anything. And then it took off for a couple years, like two or three years, the crypto markets were just on fire. And now it's sort of back again into sort of what feels like what 2018 and 2019 felt like where the markets are quieter and there's more regulatory pressure. So it goes in cycles. And I think when the cycle is upwards, people are excited and want to get their hands on stuff. And when it's quiet, I think it's tougher and more difficult for these things to

grow. But it's definitely been awesome to see other projects form. And I'm involved in some of them like HiveMapper and I was an investor in Demo. And it's really amazing to see that happen and see what can be done outside of financial instruments and derivatives and stuff like that that you typically see on the blockchain. Yeah, it's been fascinating to see the new projects pop up and also just dedicated funds. So there's a fund up here in Boston called Escape Velocity. It sort of reminds me of the early, early days of cryptocurrency hedge funds and things like that where they're small, they're bursting on the scene, but it seems like there's just a ton of momentum in the category. Yeah, we know those guys at Escape Velocity. Super smart guys have followed us and this space for

quite a while. And there's so many projects out there now that it's hard to even keep track of them. Some of them, I think, are good innovations and sort of extensions of what helium started. Some are just sort of copycats that exactly what helium does. And it's really cool to see variation. Like, I never think of it as competition because the pie is just so big for all of stuff. But it's, yeah, fascinating to watch. And every day, I feel like I'm seeing a new thing that I didn't know about that was sort of inspired by helium in some way, which I love. You have the technology piece of this, which is hard enough on its own, and then you have the economy and how the token actually works. You had one token to start with HNT, and now that's expanded into multiple

tokens. So maybe talk a little bit about the other tokens, what function they serve. At the start, the biggest problem that we thought existed was the IOT side of the problem. We wanted to to solve this problem of building a big IoT network. There was also no real way of solving other types of networking problems. So if you wanted to build a cellular network, there wasn't any frequency range you could use. It was all licensed spectrum. And so at the start of helium situation was different. But we were always curious about that.

So if you look back at our white paper, I think, from 17 or 18, like we do talk at the end about like we want to explore maybe this could be done for cellular networks or Bluetooth networks or like Wi-Fi networks or other types of networks. So we always knew that it was interesting. There were just more problems in terms of how to solve it. We didn't think that the need at the time was as great. Helium for a long time was only focused on building an IOT network. It had a single token called H&T.

Over time, though, what we started to see was that there were other opportunities and things had changed over time. So, for example, there was now a new unlicensed spectrum called CBRS, the Citizens Band Radio Service, that could be used for cellular networks. And more important than just the frequency being available, although that was important, was that phones were now supporting it. iPhones, Galaxy S-20s and above and pixels and stuff like that, all had support for CBRS, which was called Band 48.

And that was crucial. It's not really that interesting if you have a spectrum that you can use, but there are no phones, no popular phones that support it. Like you're sort of back to square one. So things had changed over time, like as helium had developed and there were open-source cellular network projects like magma. it started to become obvious that we would want to do more. And that's when I think we met the team from Freedom Fi,

which was another company that was building open source cellular networks using some of the technologies that I just mentioned. They discovered helium or we discovered them. I can't remember which way around it went. But it became sort of obvious at the time that a way to accelerate the building of open source cellular networks was to kind of do what helium was doing. And then that created the situation of, do you have the same? Is it all one token?

Should there be different tokens? And then it was a group of community members came up with an improvement proposal called HIPP 51. So everything in the healing universe is called a HIPP, there's Helium Improvement Proposals. And the design of HIP 51 was basically like we think each network or each protocol has very different characteristics. So the way that you do cellular networks or the cost, for example, of a cellular network would be very different from the cost of an IOT network. And therefore they should have their own governance and therefore they should have their own tokens and their own economics. And that was what was proposed in HIP 51. I think it was about 18 months ago, maybe more.

The purpose of the different tokens was primarily for governance, the decision-making around things like what the network should cost, how many hotspots should be allowed to be in one place, how everything works is extremely different. The primarily governance, but also further utility. So there are all kinds of ideas floating around in the community around what these other tokens could enable. Could they be used for detecting bad actors?

Could they be used for incentivizing deployment? in certain areas as part of staking. So there's all kinds of ideas, and the community is very active and engaged in helium, and improving and proposing stuff. That was really the notion, was that like every single network needs its own system, and the token is a way of sort of enabling that.

And so now you have IoT and mobile as separate tokens that today, again, primarily for governance, you still need H&T in order to use any of these networks. So if you have a phone or you have a sensor or whatever, you still need HNT in order to actually use the network. So it's somewhat complicated, but also somewhat simple at the end of the day in terms of how the tokens work and what they're for. That's fascinating. You mentioned governance. I am curious just how that works on these networks.

Do you find that it's the same communities across the three tokens? Also curious just how you think about it from a Nova Labs perspective in terms of how involved you want to be. The communities are fairly separate. If for no other reason that for the mobile or the cellular side of things is US only for now. It's the only jurisdiction that has access to like unlicensed spectrum to run a cellular application. Like, no other country that we're aware of has anything like that. Just on that alone, you have quite a different community. The IOT network is very global.

I forget how many countries it's in, but whatever, 160-odd countries or something like that. So that network is a very global network. Community members are very global. The mobile network is today very U.S.-centric. So quite different from that point of view. In terms of NOVA, we try and honestly stay out of governance. We will propose things sometimes. For example, we've proposed HIP 70, which was the migration to Solana, and we propose various

things on the mobile side, but we try not to get involved in the actual voting. Nova has never voted in any proposal. Its token weighted, as most governance is, you can vote using your tokens and you get more voting power the longer you sort of lock up your token. So you can say, I'm in this for the long haul, I'm going to lock them up for four years, and you'll get a multiplier and you're, I think it's like a hundred X multiplier and you're voting or something. And I think that's pretty typical of most on-chain governance projects these days, but that's how it works in helium. And it's super cool. I mean, sometimes it's frustrating because it's slower than just making a decision on your own, but that's also not a decentralized network.

Governance, I think, is one of the things that is frustrating and slow, but also ultimately very powerful. and I think what gives helium like a lot of longevity versus some of the other projects, which are still sort of running in a centralized way for now. One of the things maybe to dovetail on that, that I'd be curious to get your perspective on is stable coins. So stable coins really weren't a big thing when you started this thing back in 2013. Certainly in 2017, they hadn't really reached escape velocity yet. Now they're quite a bit larger.

And of course, there's different flavors. Do you imagine that we'll see projects building decentralized architecture using stable coins or do you think a native token is really a critical feature? It's tough. I mean, part of the challenge is like capital formation a little bit. It's the same reason why you don't see that many interesting applications being built on Bitcoin, for example, because you kind of need capital to form around these networks within the network.

It's how Bitcoin formed. Miners earn BTC, and that was their incentive for growing the network and making it work. And so if you start using a stable coin or Bitcoin or some other currency, then someone has to acquire that. Like, someone has to go out and pay for that. And I think that's challenging. I mean, like, what kind of team has hundreds of millions of dollars available to like go buy, you know, a stable coin in order to be an issuer of it? And then I imagine there's all kinds of regulatory questions there too. I think it's tough. It makes sense logically, but I don't know how you bootstrap the network in the first place or get the flywheel going. And I think that was also one of the magic things about crypto was this price.

discovery process that occurs as the network grows is what allows for them to grow. And so I think if you take that out, I think the growth would be a lot slower. Maybe not impossible, but it would just arguably take a very, very long time because you need the flywheel of demand to really happen instantaneously. Otherwise, there's no way to fund the network. How about on the payment side? I mean, is there friction with a native token in terms of folks doing the conversion in their head in terms of just the U.S. dollar expenditure? I wonder if there are ways to make that easier. I think there's a little bit. I mean, in Helium, we came up with a system where there kind of is a stable coin inside helium called data credits. And data credits is this sort of fixed value asset. And you can only create data credits by destroying H&T. And so depending on the value of H&T, you get a different amount of data credits. The price of data credit is always fixed. You now have other portals, basically. There's a company called Sphere Labs recently that's involved in the Solana ecosystem as a portal where you can go with a credit card, buy data credits. And what's happening behind the scenes is that HNT is being acquired and then destroyed

and you're given the data credits in the end. I think that works well enough. We haven't noticed that be a problem or a barrier to adoption. And we provided that service for a while as well, for free where people could just come and give us a credit card and we would take some H&T and converted into data credits so that we weren't expecting corporations to go buy H&T on like Binance or something. That's typically not how they work. I do think there is friction there. I think the data credit model is a good way of minimizing it. I think when you have networks where there's only a single token and it fluctuates in value and that's also what you use for payments, that is a very problematic model because you don't

have any idea what network usage is going to cost either in the short term or the long term. That was the reason why we devised that system and used it. I see some adopting a similar kind of structure and some that's going for like the single native token approach, which I think is a mistake. But I also understand it's much simpler and, you know, to implement. So you kind of get why that happens sometimes. So you mentioned the migration over to Salana certainly makes sense from an infrastructure and just wallet connectivity and composability perspective. How is that gone for you? I think it went well. We spent a lot of time both as a company

ourselves, but also the sort of greater community looking at all the different networks and chains. And it's very tribal out there, as I'm sure you've seen. They're just maximalists that just love whatever chain they're on. And so we knew it was always going to be massively contentious, whatever we suggested was going to be just explosive. It was right in that way. There's some guys that were just like, it's Solana, like goes down all the time. I can't believe you picked it,

should have picked Cardano or something. And so it was always going to be that way. But for us, like some of the key requirements, really the biggest requirement was that it was cheap to use. And the second biggest requirement was that there was a way for us to move ledgers without it being incredibly painful. One of the things that was nice about Salon, was that they used the same elliptic curve cryptography as we did in our helium L1.

And that made it possible for us to take the ledger and move it over to Solano without the user having to be involved. So we knew that address A on helium would be the equivalent of address B on Solana using the same private key. We were able to like just export the ledger in one place into another place and the user didn't have to do anything. They used their same private key or the same seed words and they just now were on a different account. And that was a huge deal because if we had done it on something like Ethereum, which doesn't use the same cryptography, there would have had to be a manual migration process where a user came and say, here's my account here and I've made a wallet on Ethereum, please migrate over. We were very worried about that because it was all kinds of fraud and fishing and like other stuff that we knew was going to happen if we did it that way, plus the cost. All of those transactions would have cost something. And that was always going to be very expensive.

That was kind of the criteria. In general, I think it's gone quite well. You know, users were largely unaffected. They just updated their wallet application and it was all the same, had the same balances. I think everyone likes the transaction speed. I think the fact that you need to pay gas now is kind of a new concept. Keelam has a lot of non-crypto-native people in it. And so this whole notion of needing Sol in order to pay for an H&T transfer is very foreign feeling at first. So there was that kind of friction. But overall, I think it's gone very well and I'm super happy with how that turned out. The whole needing transaction fees, I'd imagine at some point in the future as these networks get to massive scale, you'll have derivative markets pop up where people

just be able to have certainty over the transaction fees that they have on particular blocks. It just feels like something that other commodity markets have figured out and eventually public blockchains will figure out similar user experiences. I think so. I mean, it kind of has to happen that way. I mean, even today, it's ridiculous. Like I'm trying to do something on Polygon, wildly confusing to me. I have no idea still how to really move something from Polygon to Ethereum where if they even need to do that. It's too much, really, for like, I don't think you can expect consumer-level adoption if there's this level of complexity and, like, ambiguity, and you can send assets from one address to the same address on the wrong network, and they're

just, like, lost forever. That kind of U.X is really a problem. So I hope over time that there's significantly more work that goes into solving that problem than the sort of, like, deep technical problems, which do needs to be solved, but the UX is critical if you want anyone to adopt. Definitely need more product people in this industry. One of the obviously relevant things to discuss is in regard to Solana is just this SEC action against Coinbase and Binance. And so from where I sit, Sol looks a lot like a commodity. I have no idea what it was originally.

Very well could have been a security. But right now, a lot of people are building things on top of Solana using it as a commodity network, you guys included. As far as I know, Solana has not been targeted by the SEC, but they sort of got this ricochet shot by being named as one of the assets in the Coinbase lawsuit and the Binance lawsuit. So how does that impact you guys? And I guess a lot of people are probably just trying to come up with a point of view if they're building things on top of these networks that the SEC is saying are securities.

It's tough. I personally, and we as a company spend an extraordinary amount of time on the regulatory side of things. You can't not, really, if you're in the crypto universe at all. it's definitely problematic to just have these sort of, I think ricochet was a good way of describing. It's almost like a drive-by where they're not even named in the suit, but they're just like implicated and they can't respond. They're not a party in the suit. And so for us, I don't think it makes a difference, at least as I understand it now, like they are looking at the issuers of the tokens and the exchanges and not the users or the consumers of the tokens.

But it's certainly, you know, one of these areas where I wish there were better clarity. I find it like incredibly both disrespectful and misleading, this sort of just come in and register. Like there's just a forum on our website. Of course there isn't. If it were that easy, everyone would just do it and we would avoid spending millions of dollars on legal fees related to like regulation. So it's complicated. I do think there's an enormous lack of clarity and it isn't just as simple as are these securities or not securities. And it all goes back to something called the Howie test that I'm sure you're aware of. And even in that case, it was a lawsuit against an orange Grove and perhaps there were securities transactions there, but it didn't make oranges

securities. It meant that the transaction between the investor and how he's at Orange Grove were like securities transactions. There was a contract there, but it doesn't mean that oranges are securities. And so that's where it's complicated. Maybe as you said, some of these were securities transactions, but maybe the initial pre-mine sale of tokens are securities transactions. Does that mean all of the tokens are then also securities? I don't know. And I wish there were some clarity around that because typically securities come with requirements that don't really fit with a decentralized asset. Like there isn't a single company or a single entity that's responsible for it. You don't get a share in that company. There's no ongoing reporting requirement for that company because you're not

buying a piece of the company. It just doesn't fit exactly and it's very complicated. And it's made even more complicated by things like these sort of drive-by things and things like Director Hinman's speech where he brings up things like sufficiently decentralized and then you're like, okay, Is that the law? Do we need to just be sufficiently decentralized? And it's all you're just trying to piece together bits and pieces from public statements, from private emails that get discovered as part of the legal process, from the Howey test. It's all over the place. I don't think it helps anyone. I don't think it helps anyone to just say the law is clear, just follow it, because it's not. It's not like everyone is deliberately trying to

operate outside the law. That's just not the case. So with things like Saul and Heath, And my assumption is that as a user of them, they're just a thing that we use until someone tells us otherwise. And so far, no one has told us otherwise. It just seems like a particularly pernicious approach by the SEC and very hostile to capital formation. Because as a result of not going after the issue word directly and getting clarity on this issue, I think what you're going to see is exchanges and stable coin companies probably pull back from some of these assets that are named. and it'll hurt the ability to build things on top of these networks. It's sort of like the equivalent in the early internet

if the government were to come in and just say during the OSI versus TCP battles, hey, OSI is a security and we just don't like it. A lot of people would have just started building things on top of TCIP as a result. It doesn't seem like a very technology neutral approach. I agree. I mean, it's not optimal. And some of Chairman Gensler's comments recently,

I think are very troubling. The view that we don't need other digital. because we have the US dollar and it's already digital. I don't think that's the SEC's job. Their job is not to decide what we do and don't need. They are there to enforce the securities laws. When you allow that kind of somewhat political opinion into the decision-making process, I think it's detrimental to everyone because optimally you want the market to decide whether you need digital assets or not and not the regulator. And so it's disappointing. I know we and many others have spoken to the SEC, especially in the past and try to get better clarity even before launch around what to do

and how to do it. And I hope those conversations continue. It doesn't feel constructive right now. I mean, and there are bad actors, like for sure. I don't think things like meme coins help the cause of crypto, right? Because they're easy to look at and say, like, what is the point of this? And that's okay as long as they're operating legally, but the scams like FTCs and like all the ICOs and you've got like Celsius. All of that is just such a fiasco that you do need something.

Like, I don't think there's anyone out there saying you don't need regulation at all. I think it would just be helpful if we all understood what it was and that it did the job of protecting consumers because you do want some protections, things like FTX are a disaster and should never be allowed to happen. Absolutely. This McKinry Thompson market structure bill seems very intriguing to me from the perspective of giving a framework to raise capital as a company introduce a network, have some period of time to prove that it is decentralized and not controlled by the issuer, and then to have that token on that network, and effect be a commodity that is overseen by a spot market regime with the CFTC. It seems to me like that would be a very

good thing for what you're doing and for your networks. Is that something that you're paying attention to? Certainly. And like I said, it's not because we really want to. I don't want to be a capital markets attorney, but you kind of have to follow and be closely involved in this if you're playing in this world. The introduced bill, I think, is great. It's very similar to a bill that I know, or at least a proposal that I know Commissioner Hester Pierce was working on years ago, which had a similar direction, which was like there should be a sort of safe harbor period where you can start these things and you can operate and you have to get to some threshold of like decentralization within some period of time and then everything's okay. And so like I said, I think we all just want

to know what the rules are and how to comply with them. It's not a great situation when, you have to register these things as a security, but you're not going to be the long-term holder of these or the long-term controller. There's no venue for these kinds of assets to be exchanged as securities. I think NASDAQ and NYC and others went down this path of alternative trading systems and how to do it and have been sort of shut down at every turn. I think you saw Robin Hood say that recently, and I know Coinbase has been down the same path too. It isn't effective to just say, like, register them as securities when they don't really fit into that framework and you're not allowing the other side of the market to exist there.

You're not allowing capital formation to occur because you're not allowing the registration for any of these alternative trading systems like a Coinbase or Robin Hood. So it feels very broken to me and certainly I would like to spend significantly less time on regulatory issues. I'm sure I speak for like everyone in the crypto space that operates a business. And that should I think be the goal of the SEC as well is like let's come up with a useful framework that we can all actually follow that protects people and puts us all on the right side of the law. And I wish we understood exactly what that was as an industry as a whole. So it's good

to see it getting some attention from Congress, which is really where it should live. It's Congress's responsibility to like do this. And so I'm glad to see someone finally doing that. Yeah, we definitely need them to act there. Maybe just coming back to the product side, obviously this is more fun to talk about MVNOs here. This is a big swing what you guys have underway here. So maybe talk about. Maybe we talk a little bit about just what MB&Os are, why they've been so hard in the past and what you guys are doing here? So an MVNO is a mouthful of words. It is a mobile virtual network operator. So you have two entities in the United States and maybe more broadly, but you have MNOs, which are the mobile network operators. And in the U.S. that is T-Mobile, Verizon, AT&T, to some extent,

dish now, I think U.S. cellular. So those are the network operators that have built networks, right, like they have network infrastructure. They also are customer subscriber-facing, but they're also infrastructure side. MVNOs, the V being the key part, they are just subscriber-facing. They use the infrastructure from M-NOs. So if you see someone like Mint Mobile, Boost Mobile, guys like that, they are using someone else's network. In Mint's case, it was T-Mobile.

I think in Booth's case, it's AT&T and T-Mobile. And their job is really to acquire subscribers. They pay AT&T and T-Mobile for access to the network. and they try and make margin there, right? Like they start a subscriber X, they pay T-Mobile Y, and they try and make the margin in the middle. It's kind of a tough business because all the MV&Os are doing the same deals, for the most part.

You get a better deal at volume. So if you're a boost and you have a lot of subscribers, I'm assuming they get a better rate from T-Mobile than like we do, for example, as a new and upcoming MV&O, which I'll talk about. It's a tough market because everyone is on the same playing field and the margins become minuscule or zero. you're buying oranges from the same orange grove. There's only like so many ways you can slice the pricing for that. What Helium Mobile is, so we're launching a service called Helium Mobile,

it is in ways similar to an MV&O, but in other ways completely different, in that I think it's really the first attempt at a multi-network implementation, right? I think others thought about this and kind of did it like Google Fi. So we did a deal with T-Mobile. So it aims to use T-Mobile sometimes and helium sometimes. And maybe other networks in the future sometimes, too. If other D.Y players like X-NET or really or something are successful and build out big networks, like maybe we would use them too. And the design there is really not to just be another MV&O. I don't think that there's a way to really win in that market over the long term. I think if you're mint and you've got like a Ryan Reynolds, you've got like a sort of X factor in there that creates success because he seems to create

success in like everything he touches, whether it's Welsh football clubs or Jin, brands or like whatever. But typically it's going to be hard for us all. Like we're not Ryan Reynolds. So for the rest of us, you can't really win in that game because as I said, you're all buying the same thing and just trying to make a tiny bit of margin somewhere. With Helium Mobile, we want the helium side to succeed too. We think what's interesting about helium is that it is kind of another MNO that is forming. It is building a 5G network alongside the IOT network. And Helium Mobile will be the first customer to like take advantage of that network that's existing. And so basically the way it works is that you are a subscriber to Helium Mobile.

You have a SIM card or an ESIM just like a typical network. If you are near a helium hotspot, you will use that hotspot for data. If you aren't, you will use T-Mobile for data. The rate that we pay helium is much, much cheaper than the rate that we pay T-Mobile. So we are incentivized as well to help the helium network grow. Like, we want the helium network to be everywhere so that we can use it all the time and pay T-Mobile less. That's sort of our goal, is that we want to pay less for data, and helium is a way for us to do that. And so it's the first time T-Mobile has done a deal like this,

where it's kind of a hybrid network approach, where on the one hand, we're going to use one network, and the other hand, we're going to use their network. But there's a lot of technical integration that neither us or them had done before, and so it's been a big learning experience as to like how to do this well. But that's sort of the mission objective there is to really bring a different type of network to consumers. And then as a result of that, be incredibly aggressive on the pricing. We think ultimately what is special about helium, if you really distill it down to its end state,

yes, there is a sort of community like social-built aspect to it. Yes, there is privacy and security. But ultimately, it was always about economic. Building networks would be much, much cheaper the helium way than the traditional way. And so we want helium mobile to be a reflection of that for consumers. As a result of helium existing, we are now able to like, often for what we think is insanely low pricing to consumers, which we haven't announced or displayed yet. And that's the direction that we think is important. And that's going to be the biggest differentiator is that when you get to build these networks a different way, the cost to the consumer or the subscriber is going to be sufficiently or significantly different as well.

It's really fascinating because the impact of the tokenized network has a top line and a bottom line impact because of saving the cap-x on the build-out, and then if successful, all of these things will have other monetization vectors other than just the traditional US dollar revenue line item. We don't want to depend on that too much because very speculative and very tied to market movements that are unrelated to anything that we can influence. But what we do want to focus on is that we think we can charge a subscriber X, which is significantly lower than anything in the market, and then use the helium network at a cost that is also significantly lower than anything in the market and make that work. Of course, it only works if the helium network gets big

enough to be used the majority of the time. So that's the mission. You've got to make it occur on both sides. I think helium IOT did a really good job of building the supply side and a slower job of building the demand side. And with helium mobile, we want to really focus on the demand side and help the supply side as much as we can at the same time. Amazing. Amir, I guess my closing question would be what's on the roadmap here for the next few months and where can we send folks to learn more about helium and stay in touch? So Helium Mobile is going to be launching in the summer. I don't know if we've announced an exact date or anything like that, so I'll not say it,

otherwise Emily will yell at me. But that's really the biggest focus for us right now is launching Helium Mobile out of, it's in a closed beta right now for sort of invite only folks. But launching it out of closed beta into like general availability is really the biggest focus for us, sort of announcing what the pricing model is going to be. We've got some new products on the horizon that has. help the helium network side. So we have ultra low cost helium mobile hotspots coming that we think will help the network grow more quickly because I think especially in this market, everyone is

quite price sensitive. So anything that we can do to lower the costs on the helium side, we think is going to be helpful to. So that's really where we're focused. We have an IoT business as well called 1663, a lot of work going in there. Those are much longer and slower cycles because we are mostly B to B there. So we're dealing with enterprise customers that are moving more slowly that take longer, but ultimately should end up being bigger. So in the short term, it's mostly helium-mobile stuff that you're going to see from us. And we're super excited. Like, we think it's going to have some impact on the telecom market in general, and we sort of announce what we're doing. Helloheelium.com is where you should go to find out everything helium-mobile related.

Well, it's incredibly exciting. You guys are up to some fascinating things, and definitely one of these use cases that I think brings the crypto market to life for folks that might not be otherwise interested. The real-world applicability here is pretty fascinating. So thank you for joining us today on the podcast. Thanks for having me. Thanks for listening to another episode of On the Brink with Castle Island. To find out more about Castle Island, visit castle island. Visit castle island. To listen to all of our podcast episodes, please go to On the Brink dashpodcast.com

or just click on the tab in our website. Thanks for listening.