GM PRO DOers!
The immediate action most of us take when stepping into our cars is opening a map.
Whether that’s Waze, Google Maps or Apple’s Maps is irrelevant – we all utilize some sort of digital GPS for many, many hours per year.
By using these applications, for free, on our phones, we feed immense amounts of data to the likes of Google, and Apple, who sell it to other companies.
It’s estimated that the market of geospatial analytics will be worth $256 billion by 2028. Source. 🤯
What do we get in return for enabling companies to make billions?
Absolutely nothing! That’s why you’ve probably heard the saying: “If the app is free, you’re the product.”
As explained in our DePIN report from a few weeks ago, web3 changes this landscape by letting users monetize their data.
Most of you loved that report (we saw all the emails) so today, we decided to dive into one of the most popular DePIN projects – Hivemapper.
Today we want to answer if investing in $HONEY – the token for Hivemapper – could allow you to capture the upside of that $256 billion mentioned above.
Hivemapper is building onchain to challenge Google and Apple for the multi-billion dollar mapping market.
Instead of exploiting users for their data, Hivemapper leverages a network of drivers from all over the world who use specific dashcams to collect geospatial data while they drive.
In return, drivers are paid weekly in $HONEY tokens – turning everyday driving activities into valuable data collection sessions.
To date, Hivemapper has successfully mapped ~8.4 million unique kilometers globally, covering 12% of the world's surface with the help of only 58,000 drivers.
That is unheard of – it would typically cost companies billions of dollars to achieve such scale.
By utilizing a token to reward people all over the world, Hivemapper has managed to pull this off in record time – they were only founded in 2015 and launched their network in November 2022. 🤯
Hivemapper might be one of the most exciting innovations to come out of the crypto ecosystem, and it has potential to sell data worth billions of dollars.
However, it’s not all rainbows and sunshine.
We’ve done a full deep dive into both the business model of Hivemapper (which looks good) and its $HONEY token (which doesn’t look so good… yet).
Today, we’ll share our learnings with you by covering:
How Hivemapper Works & Makes Money 💰
Why Building Hivemapper Onchain Makes It Better Than Google or Apple
The Role and Tokenomics of $HONEY ⚙
Considerations Before Investing 😨
Vamonossss! 👇
The way Hivemapper works is pretty straightforward – you drive, you map & you earn.
First up, you need to purchase a dashcam from Hivemapper. There are 2 variations right now. One costs $300 and the other costs $650.
Secondly, plug your dashcam to your car. Here’s how it’ll look.
Thirdly, as you drive your car and record more of the world, you earn $HONEY tokens.
Hivemapper pays its drivers based on the value they provide i.e. if you map more important areas of the world (like New York City), you get paid much more than someone mapping a village in Alberta.
After all of this data is gathered by drivers all over the world, Hivemapper uses AI to process it, extracting valuable information such as road signs and traffic conditions, to create highly detailed and current maps.
Contributors can also earn $HONEY by playing ‘Map AI Trainer games’, which improve the accuracy of the AI system Hivemapper uses for map processing.
How does Hivemapper make money?
Hivemapper generates revenue by charging businesses for access to its mapping APIs, used for navigation, tracking, and geographical data analysis.
This service targets a broad market, including autonomous vehicle companies, delivery services, real estate agencies, and urban planners, offering them subscription-based access to constantly updated maps.
This is also how Google makes money off of Google Maps.
The growing need for up-to-date and precise maps, especially with more self-driving cars, means big growth chances for Hivemapper.
If Hivemapper can capture some of the market worth hundreds of billions of dollars, they could become one of the biggest businesses building onchain.
It’s much faster and cheaper to set up a project like Hivemapper, compared to your typical mapping service.
No need to own a car fleet – you just need to sell devices (dash cams) which people plug into their cars.
You don’t need employees – people will simply plug into your ecosystem because they can earn extra income.
The key here is unused resources being put to work. Think about all cab, delivery or truck drivers who drive all day, everyday.
Buying a Hivemapper dash cam lets people earn extra money and help map the world, making it a smart choice for many as long as it stays profitable.
P.S.- Profitability is something to be considered, which we’ll talk about later in this report.
Hivemapper, a U.S. company, plans to map the world by paying people globally, a task hard with FIAT due to high costs and delays.
Using blockchain and tokens, payments are instant and inexpensive.
The total length of all roads worldwide is 64 million kilometers – Hivemapper has already mapped out 12% of that.
This level of scalability is unheard of. It would cost companies many millions (potentially billions) per year to achieve this, meaning that only the big corporations like Google or Apple can really compete in this space.
By building onchain, Hivemapper can compete despite being just a startup.
This model is also very scalable as it generates network effects – as more drivers join the network and contribute data, the map becomes increasingly accurate and valuable, attracting more businesses to the service and encouraging even more drivers to participate.
Before booking AirBnBs or restaurants in new places, I use Google Maps’ Street View to ensure the area is safe and appealing.
However, Street View can be outdated, sometimes by decades, leaving users without current data.
This is a minor annoyance for individuals but a significant issue for businesses like UberEats or car companies developing autonomous vehicles, as they rely heavily on fresh maps and up-to-date information.
Hivemapper can update maps faster and cheaper than the likes of Google.
If there’s a need for updated footage in a specific location, Hivemapper can simply boost rewards for that specific location, and local drivers can quickly map those areas.
This process could potentially take a day versus Google's weeks, as they need to send their own drivers and cars to that location.
For all of this to function as it does, Hivemapper needs their token – $HONEY.
While we’ve established that Hivemapper is a fascinating company with huge potential, we must address the elephant in the room – is $HONEY a good investment?
Let’s see. 👀👇
$HONEY is a Solana-based token launched in November 2022 with a 10 billion total supply.
4 billion were allocated for contributors
2 billion were allocated for investors
2 billion were allocated for Hivemapper employees
1.5 billion were allocated for Hivemapper Inc. (the U.S. based company)
500 million were allocated for the Hivemapper Foundation
The most important part of this allocation is the first one – the 4 billion tokens allocated to reward network contributors, which we’ll focus on today.
Hivemapper pays people with $HONEY for driving and recording roads, fixing map details, and checking map quality – right now, they focus on paying drivers to cover more roads.
To reward these contributors, Hivemapper mints new tokens every week, from the initially set pool of 4 billion $HONEY.
The amount of $HONEY minted weekly depends on how much mapping has been done during that week.
90% of newly minted tokens are allocated to contributors.
10% goes to Hivemapper for operational costs and expenses.
Hivemapper estimates that it’ll take over 10 years to put all tokens in circulation.
This mechanism is obviously causing inflation, but more on that later…
The Burn and Mint System
Hivemapper has built a Burn and Mint System, which is similar to Helium’s burn-and-mint equilibrium which we talked about in our DePIN report a few weeks ago.
Here’s how it works:
When companies want to access Hivemapper’s data, they need to pay using so-called Map Credits. These are off-chain credits like ‘Gems’ in the mobile game "Clash of Clans".
1000 Map Credits cost $20 and 50 Map Credits ($1) buys you 1km of data.
Now, when businesses use Map Credits to purchase data, $HONEY is being burnt in the back-end.
Example: If UberEats buys $20 worth of map data, $20 worth of $HONEY is being burnt at the same time.
Instantly after being burnt, an equal amount of $HONEY gets re-minted and distributed to contributors, like so:
While this might seem unnecessary, the reason for the burn and mint system is so that when a business buys map data, the amount they purchase doesn’t fluctuate along with the $HONEY token – instead, the credits remain stable at the purchase price.
Additionally, over time, contributors will be rewarded each time Hivemapper sells data to other businesses, meaning that the network can reward contributors from the revenue created, without needing to rely on inflation.
Here’s how it’ll look in reality – even if all 4 billion $HONEY tokens get distributed, contributors will continue to earn each time Hivemapper generates revenue.
In short, there is no utility to $HONEY right now. What do I mean by that?
Once drivers make contributions to Hivemapper’s network, they get paid in $HONEY.
When they receive their remuneration, contributors have no reason to hold this token. There’s nothing you can do with it right now.
There’s no governance, staking or other utility that can incentivize people to hold this token.
And that brings us into the concerns regarding Hivemapper, so let’s talk about that. ⏬
Every week, Hivemapper mints tokens out of thin air (out of the 4 billion batch), to reward contributors – this makes $HONEY a highly inflationary token.
With a current circulating supply of roughly 7%, it’s expected that inflation will continue to be a problem.
However, that’s not the end of the world – it’s common practice in early-stage tech startups.
Think of this similar to how tech companies continuously sell equity to subsidize growth, in order to bootstrap the company.
But, to ensure sustainability, Hivemapper must develop demand for the token as well as revenue to cover the costs of the contributors.
So the question is…
As mentioned above, there’s no utility for $HONEY right now – therefore, there’s no demand for this token (other than speculation).
The only role for $HONEY in Hivemapper’s ecosystem is to act as a payment token to contributors – for that purpose alone, a stablecoin would probably be a better fit.
Here’s the deal. Since contributors earn tokens on a weekly basis and have no reason to hold it, they’re likely to just sell it.
After all, if you’re a contributor, you want to make money – you can’t make money unless you sell the token into FIAT.
So, with each weekly batch of newly minted tokens, Hivemapper creates more and more sell pressure on the token.
If $HONEY has such weak tokenomics, why was it created in the first place?
Well, because of fund raising – from this standpoint, $HONEY has been pivotal to Hivemapper’s success so far.
Hivemapper raised $21 million in capital from VC firms like Spark Capital, Multicoin Capital, GV as well as the general public by selling $HONEY tokens.
Without this capital, Hivemapper wouldn’t have been able to even start.
$HONEY has also been important to distribute rewards for contributors all over the world, something that would’ve been really difficult to do with USD for example.
Again, they could have just used a stablecoin, but adding the speculative nature with the $HONEY token has allowed the token to appreciate and thus, provide better rewards to contributors early on.
From a business standpoint, Hivemapper’s way of operating is fascinating and it’s clearly better in many ways than current web2 mechanisms used by Google for example.
Quick Updates: Drivers use dashcams to fast-track map data collection.
Saves Money: Pays drivers with tokens, cutting down on operational costs.
Expands Easily: Boosts rewards to enter new areas cheaply.
Always Current: Driver contributions keep maps constantly updated.
Better Accuracy: AI and community input ensure precise map data.
Therefore, Hivemapper has the opportunity to scale fast and become a big player in the mapping ecosystem, mostly because they can utilize their large network of contributors.
This is the power of DePIN.
However, their tokenomics in current form (inflation, lack of utility & constant sell pressure) are a cause for concern.
That said, I think it’s very likely that Hivemapper will create some sort of utility for the $HONEY token in the future.
Whether that be a loyalty program, a currency within a broader Hivemapper ecosystem, governance or other innovative token use cases.
So… is $HONEY a good investment or not?
$HONEY is currently sitting at ~$0.18, up around 15x since August 2023.
This growth has mainly been fueled by the narrative around DePIN projects and $HONEY’s recent listing on Coinbase.
So, this token basically pumped based on narrative. And I think that’ll continue during this bull cycle, especially considering the market cap is still sub $200 million.
In bull markets, tokenomics and fundamentals don’t matter much – as long as a project has a narrative, it should do well.
In Hivemapper’s case, they have both the DePIN narrative and AI – two categories that’ll do really well in my opinion.
However, once the music stops (it will at some point), there’ll be no fundamental reason for people to hold $HONEY, and it will likely crash massively
So, by purchasing $HONEY right now, as an investor, you’re doing 2 things:
Hoping that Hivemapper will add utility to its token in the future.
Hoping that this bull market will bring sufficient hype to pump the token.
So there’s some uncertainty regarding $HONEY as an investment. That means it’s still early.
To wrap up, I think Hivemapper has created a new and innovative way to potentially outcompete Google because of blockchain, that gets me excited!
But to ultimately succeed, they’ll need to figure out some strong token sinks and demand functions for $HONEY. I’m not investing in $HONEY at the moment (FYI not saying you shouldn’t), but I will definitely purchase a dashcam to support Hivemapper in their journey!
Will you? Let me know if you’re investing in $HONEY or buying a Hivemapper dashcam in the PRO-discussion channel in our Discord.
Before you go... We need your PRO feedback!
In our reports, we cover a whole lot of stuff like Tokenomics, Onchain Analysis, Business Models, Investment Strategies, Macro Analysis and more...
We want to know what you enjoy the absolute most so that we can tailor our content to your needs & wants!
Please take a second to vote in our X poll below. Thank you!
Thanks for reading. And remember, you're strong, you’re powerful, you’re alpha! ❤️
Kyle Reidhead
Founder of Web3 Academy and Impact3
Find him on Twitter
As a PRO, you’re entitled to a PRO or FOUNDERS Pass (NFT), depending on your subscription.
This Pass will grant you access to our token-gated Discord and to other perks such as early access to various protocols and discounts to IRL and online events.
To grab your Pass, simply click the button below, connect your wallet to your Paragraph account and grab your Pass.
Learn the best practices to allocate capital and successfully invest in crypto and web3 with our Web3 Investing Masterclass.
This invaluable resource costs $249. But as a PRO, you get it at a 50% discount.
And as a Founding member, you get it for FREE! 🤯
All you need to do is grab your PRO/Founders Pass (see above ☝) and connect your Pass using the link below. 👇
As a PRO or FOUNDERS Pass holder, you have exclusive access to our token-gated Discord channels dedicated to PRO members!
Upon claiming your Pass, head to Discord and connect your Pass in the #start-here channel (WEB3 ACADEMY PRO category) to unlock access to PRO-only channels!
Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.
Over 25k subscribers
Collect this post as an NFT.
0