The current volatility of the cryptocurrency markets has investors rightfully concerned. From November 2021 when Bitcoin (BTC) hit a high of nearly $70K, to June 2022 when it sunk to a low of $18K, we witnessed the collapse of the stablecoin Luna, the liquidation of Three Arrows Capital (3AC) and many others that halted withdrawals to prevent a “run on the bank”. Now, there are signs that the market has stabilized, but uncertainty remains.
What is certain is that Web3 and blockchain technology will continue. Whereas Web1 is often thought of as static “read-only” web sites, and Web2 brought a generation of social sites with “read-write” web sites, Web3 is often described as “read-write-own”. Web3 is a movement by the users of the Internet to own and control their data. Regardless of whether Bitcoin is at $100K or $10, this desire by users to control their presence on the Internet does not change.
Blockchain investors who have been investing in digital currencies for many years refer to this time period of decreasing prices as a crypto winter. Since Bitcoin’s launch in 2009, there have been many crypto winters where prices contract and then rebound. Traditional equity investors witness markets moving in cycles too. Web1 ushered in thousands of dot-com companies, with a Nasdaq crash that began in 2000 and forced some Web1 companies out of business and others to consolidate. But as we know from history, the Web did not disappear. Amazon and Google started during this time period and have forever changed our lives.
The same will occur with Web3. Solid projects that provide value to users will remain if these projects are built on a sustainable foundation. Others might fail. That’s the nature tech cycles.
Airwaive’s Economic Model
When we set out to build Airwaive, we focused on a sustainable economic model for our tokenomics. We started with these questions:
- What value is being provided to the user?
- What is that value worth?
For the first question, Airwaive’s mission is to create decentralized wireless networks (DeWi) for Internet connectivity. The primary value that we see is bringing broadband Internet to homes, known as fixed wireless. Secondary value is using these networks for mobile devices and IoT. But the primary use case is broadband connectivity at home. Half the world does not have this option and the other half typically has one choice for the Internet service provider.
For the second question, this value to users is typically priced as a monthly fee for access to the Internet. Internet access is often based on geography and speed of connection. For example, the average American pays $64 per month.
To summarize, the foundation of the Airwaive tokenomics is supported by users that find recurring value by accessing the Internet each month, and these users are willing to pay for this access. But how the network is built becomes the next challenge…
Airwaive’s Partner Model
To build sustainable decentralized wireless networks requires partnerships. When building the product, we had to ask ourselves these questions:
- What wireless spectrum can be used for wireless broadband networks?
- What locations are needed to build these networks?
Wireless data is transmitted through the air at different frequencies (spectrum). Most frequencies available for wireless data are licensed by an organization that has rights to use it in a particular geography. While there are some frequencies that are available that anyone can use (unlicensed), there is not enough unlicensed spectrum available to build sustainable fixed wireless networks around the world. For this reason, we chose a partnership model with organizations that have these frequencies to help build and operate networks. In the Airwaive model, these are the network operators.
The locations to build wireless networks rely on property owners that have rights to host wireless access points. Because property values differ around the world, we knew that we could not set a consistent price for hosting access points. We created a marketplace to let supply and demand determine the price. This marketplace is not only used for property owners, but also other products and services required for the creation of a local network. Thus, in the Airwaive model, these are called network creators.
Our tokenomics is described in the following video. There are elements that are not described here, such as the verification oracles and network investors, that are briefly explained in the video and will be described in the future when the Airwaive tokenomics paper is published.
What you will find in the summary video is a plan for sustainability. A token model that provides rewards to network creators that is backed by real value and recurring payments from operators. A model that is ultimately tied to Proof of Connectivity, aligning rewards with the business model of our partners and their users. It is a model that is designed to last for perpetuity.