Ship or Die 2025: Build vs. Buy - The Future of Billion-Dollar DePIN Companies

In a groundbreaking debate at a recent crypto conference, industry leaders Santiago Roel Santos and Ariel Seidman squared off on the future of Decentralized Physical Infrastructure Networks (DePIN). The central question: Will the first billion-dollar revenue DePIN company emerge from a Web2 acquisition or a native Web3 startup?

Summary

Top Projects

Lulo

Score: 7,586.13

Bonk

Score: 4,806.12

Sphere

Score: 2,544.42

Moonwalk

Score: 2,026.11

The debate centered around two contrasting approaches to scaling DePIN companies to billion-dollar revenues. Santiago Roel Santos, founder and CEO of Inversion, advocated for a strategy of acquiring established Web2 companies and retrofitting them with crypto mechanisms. He argued that this approach could rapidly bring millions of users into the crypto ecosystem by leveraging existing infrastructure and user bases.

On the other side, Ariel Seidman, CEO of Hive Mapper, championed the organic growth of native Web3 companies. Seidman's company has already mapped 500 million kilometers of the world in just over two years using crypto incentives to build a community-driven mapping platform. He contended that truly innovative products and services can only emerge by building from the ground up with blockchain technology at their core.

The discussion delved into the intricacies of financing these different approaches, with Santos proposing a novel crypto-native capital formation strategy, while Seidman highlighted the increasing interest from traditional venture capital in DePIN projects. Both speakers emphasized the importance of creating real value and achieving product-market fit, moving beyond the hype cycles that have characterized much of the crypto industry's history.

Key Points:

The Build vs. Buy Debate

Santiago Roel Santos argued that the fastest path to bringing a billion users into crypto is through acquiring existing Web2 companies and integrating blockchain technology. He envisions transforming traditional businesses by making their operations more efficient with crypto rails, citing examples such as acquiring telecom operators and integrating technologies like Helium for backend operations.

Ariel Seidman countered this approach, asserting that truly revolutionary products emerge when built from the ground up to leverage the unique characteristics of blockchain technology. He pointed to Hive Mapper's success in incentivizing a global network of users to continuously update and refresh mapping data, something that was previously unfeasible without crypto incentives.

Financing Strategies

Santos introduced an innovative financing model for his acquisition strategy. Rather than raising a traditional private equity fund, Inversion plans to create its own blockchain, using token economics to bootstrap a "permanent capital vehicle" similar to Berkshire Hathaway. This approach aims to provide the flexibility to acquire and transform businesses without the pressure of short-term returns that traditional venture capital or private equity structures impose.

Seidman discussed the evolving landscape of venture capital in the crypto space. He noted a shift where non-crypto VCs are increasingly interested in DePIN projects, particularly as regulatory clarity improves. He emphasized the need for the crypto industry to move beyond hype cycles and focus on fundamental business metrics like product quality, customer traction, and team capabilities.

Product Development and Challenges

Hive Mapper's approach to product development involves creating custom hardware designed specifically for their use case. Seidman detailed the challenges and rewards of building hardware in-house, including the ability to dramatically reduce compute and data storage costs by processing map data on the device.

Santos acknowledged the difficulties in product development but focused on the potential for crypto technologies to cut costs and improve efficiencies in existing businesses. He argued that many traditional executives are receptive to DePIN technologies once they understand the potential impact on their bottom line.

Facts + Figures

• Hive Mapper has mapped 500 million kilometers of the world in just over two and a half years
• Hive Mapper's custom hardware reduces compute and data storage costs by about 95%
• Inversion aims to create a Berkshire Hathaway-like entity for crypto acquisitions
• Hive Mapper recently announced a partnership with Lyft
• The debate took place at a conference called "Ship or Die 2025"
• Seidman suggests that Helium, despite having achieved product-market fit, is currently undervalued
• Santos sees the telecom sector as a prime target for crypto integration, particularly in markets like Mexico and Brazil
• Hive Mapper has mapped approximately one-third of the world's roads

Top quotes

1. "Crypto is really good for capital formation. You know, a lot of the foundations manage billions and billions of dollars. They're not using that capital efficiently." - Santiago Roel Santos
2. "We can now motivate and incentivize, you know, tens of thousands, hundreds of thousands of people all over the world to buy a device like this that generates the map and that is constantly updating and refreshing a map, which was quite frankly unheard of before." - Ariel Seidman
3. "Deep-in as a category is grossly undervalued, grossly under-appreciated, because people in the real world actually really appreciate, again, going back to that example of the P&L. Deep-in is a cost-cutting technology for some of the largest companies in the world." - Santiago Roel Santos
4. "If you build hardware, it'll take a couple of years off your life for sure. Like it's very, very stressful. But I think it's very satisfying in a way that, I mean, I've built a lot of software in my life. Building hardware I think is actually more satisfying." - Ariel Seidman
5. "We as an industry, when I say we the crypto industry, we kind of have to move past that, right? We have to move and say like, okay, what's the product, what's the customer, what's the traction here, all those types of things, which you would do in any business." - Ariel Seidman

Questions Answered

What is the main debate discussed in the video?

The main debate centers on whether the first billion-dollar revenue DePIN (Decentralized Physical Infrastructure Network) company will emerge from acquiring and transforming an existing Web2 company or from a native Web3 startup built from the ground up. Santiago Roel Santos argues for the acquisition approach, while Ariel Seidman champions organic growth of native Web3 companies.

How does Inversion plan to finance its acquisition strategy?

Inversion plans to create its own blockchain and use token economics to bootstrap a "permanent capital vehicle" similar to Berkshire Hathaway. This approach aims to provide more flexibility than traditional private equity or venture capital structures, allowing Inversion to acquire and transform businesses without the pressure of short-term returns. The strategy leverages crypto's capacity for efficient capital formation.

What unique approach has Hive Mapper taken in building its mapping platform?

Hive Mapper has built a community-driven mapping platform by incentivizing users with crypto rewards to contribute mapping data. They've developed custom hardware devices that users can install in their vehicles to passively collect and process mapping data. This approach has allowed them to map 500 million kilometers of the world in just over two and a half years, demonstrating the power of crypto incentives in building decentralized infrastructure.

How is venture capital in the crypto space evolving according to Ariel Seidman?

Seidman notes that non-crypto venture capitalists are increasingly showing interest in DePIN projects, particularly as regulatory clarity improves. He emphasizes the need for the crypto industry to move beyond hype cycles and focus on fundamental business metrics like product quality, customer traction, and team capabilities. This shift suggests a maturing of the crypto VC landscape, with investors becoming more discerning about the real-world value and potential of crypto projects.

What sectors does Santiago Roel Santos see as prime targets for crypto integration?

Santos specifically mentions the telecom sector as a prime target for crypto integration, particularly in markets like Mexico and Brazil. He envisions acquiring telecom operators and integrating technologies like Helium for backend operations, as well as introducing stablecoin services to their large user bases. This approach aims to bring crypto functionality to millions of users through existing infrastructure and user relationships.