Tokenized incentives are being tested to see if Internet connectivity can spread in areas where other efforts have failed

Is a decentralized Internet possible? 

For a few months in 2022, it seemed likely. Even crypto skeptics kept an eye out for Helium. The American company sold users hotspots, promising them ownership for a worldwide, decentralized “people network” for the Internet-of-things devices. 

The premise was that users could plug in these devices to share their Internet connections with others and get rewards in Helium (HNT) tokens. The company was set for success by a $111 million token sale led by venture capital fund A16z. 

After shipping more than 600,000 hotspots and 3.5 million hotspots in backorders, the network reportedly generated less than $7,000 per month. Moreover, Forbes reported that half the hotspots were distributed to employees and their family and friends, giving them unfair advantages and early access to rewards. 

Yet, another company is trying to materialize the holy grail of blockchain technology use cases. 

Wyru is an Ecuadorian startup that has graduated from the Alogrand Miami Accelerator. It started in 2021 with an idea and a white paper by its founder, Charvel Cehdraui. Today the startup has closed its $2 million dollars seed round and is ready to launch its services by April. 

DeCential spoke with Charvel to understand his motives, how he’s attempting to avoid the mistakes of Helium and the business plan he’s backing. 

DCcential: Tell me about yourself. What got you interested in Internet connectivity? 

Charvel Chedraui: I'm a vegan, and I like skateboarding. I was born in Ecuador, but I went to high school and college in the United States, where I studied business. I went back to my home country to study architecture. I live between Miami in the USA and Quito in Ecuador. 

While studying in Ecuador, I had a very limited Internet connection. I went to coffee shops and bought something just to get a Wi-Fi password, and sometimes it didn't even work. I realized that a lot of people in the world live in Internet poverty. 

The Internet has changed my life. I couldn't be here talking to you and doing what I'm doing today if I didn't have Internet when I was younger. It taught me everything. I wanted to make it easier for everyone to get connected. 

 I have always been an entrepreneur, doing side businesses and buying and selling stuff. In 2012, I dropped out of architecture and founded my first startup. 

DC: What was your solution? 

CC: The idea was to spread hotspots in malls, cafeterias and nightclubs so that people could connect to them for free in exchange for showing the advertisements. It was very hard to make it work because, at the time, nobody understood where ads could fit in a Wi-Fi network. 

I later established Red Phenix, another startup that enabled convenience stores in Latin America to sell their Wi-Fi network to customers inside the stores. This was cheaper for consumers, as they could get a few megabytes to send an email or finish a task for as little as 25 cents. It worked fine until Covid hit and stores closed their doors. 

DC: You did not think of using blockchain technology at the time? 

CC: I have been aware of telecommunication companies incorporating blockchain components since 2017, but then all these initial coin offering scams happened and people started losing money, so I just distanced myself from it 

But in 2020, during Covid, I started reading about it again, bought some Bitcoin and read white papers for people building on different blockchains. This was when I started to work on Wyru. 

DC: What is Wyru in the simplest term? 

CC: Wyru is an Internet service provider that is decentralized and tokenized. 

We build Internet infrastructure in cities, tokenize them, and when they are in place and used by clients, we share the rewards of the performance of this network with the owners of these tokens. 

DC: What exactly do you mean by infrastructure?

CC: We have two models. The [first] model is where people can share connectivity where there is already available connectivity, and the [second] model is where we provide connectivity where it is needed and not provided. 

We started with Genesis Hotspot, which enables users to share their Internet with neighbors. We ran a test project in March 2022, using ten hotspots and we used this pilot to raise money. 

Today, we are a licensed Internet provider in Ecuador. We have deployed 50 km of fiber in Quito, covering two large areas of the city. We aim to tokenize this infrastructure and then use the money to build twice as much [cable]. 

DC: And how is this infrastructure tokenized? 

CC: People can also buy and invest in our infrastructure itself. From as low as $50. 

We group the Hotspots deployed in any city into something we call Hotspot Pools. Each pool has a minimum of 1,000 Hotspots. We tokenize the pools and sell them to people. 

Around 40 percent to 50 percent of the pool’s revenue is spent on maintaining and keeping the network. The rest is distributed according to everyone’s share in the pool. 

The token is called Wyru and is also used to buy connectivity to the network, which increases its value. For example, you buy the equivalent of $20 in your currency to get Wyru tokens and use them to purchase Wi-Fi credits and get a connection. 

We are built on the Algorand blockchain. Everything we do will be on the blockchain and transparent to the community. People can see and track the details of all transactions. 

DC: Building an infrastructure from scratch sounds like a mission for a larger corporation rather than a startup? 

CC: We have gone to the largest Internet providers in Latin America, and to be honest, they were interested, but they did not go through with [the deal] because it is more profitable for them to upsell existing clients more services and packages rather than connecting more people. 

In Ecuador, 50 percent of houses do not have a fixed Internet connection. This is prevalent in Latin America, either because there is no Internet provider in a specific area or because the service is very expensive. 

After 10 years of trying to innovate around telecommunications, I realized if I wanted to connect more people that are not connected today we have to do what other providers are not doing.

DC: You must be aware of Helium, which generated a lot of enthusiasm, but less than impressive outcomes. How is Wyru different? 

CC: Helium focused on connecting IoT devices. We focus on Wi-Fi- Internet connection. We also build our infrastructure of fiber cables and connect them directly to homes. This is a completely different model and a completely different company. 

DC: Have you learned any lessons from their outcome? 

CC: Of course. There must be a balance between the number of devices deployed and the network's revenue. 

We learned that it won't make sense if you allow 10 hotspots to operate in the same house or building, and every hotspot has a 6 km range. You will end up having 1 million hotspots around the world that make only $6,000. 

We are also working on a bounty price for people who can identify where the hotspots are needed. We don’t want the hotspots to be deployed anywhere just for the sake of it. Otherwise, it won't make any rewards. 

DC: Helium was also criticized for its dependence on selling hotspots to employees and people with close connections to the company. How do you guarantee to users it is not the case with Wyru?

CC: It is not our core business to build and sell devices. We do not want to be entrapped where we have to sell devices to get revenue.

We only made a patch of 1,000 devices and had a maxim of 5 devices maximum per user. We do not intend to create more. We are working on compatibility so users can buy any device off the shelf and connect it to our network. They won't need to buy it from us. We are focusing on profiting from people using the network.

DC: What are your plans to make money? 

CC: We hope to launch our token generation event by April 2023. 

We have 4,000 people on the waiting list who want to use our service, so we expect to have at least 5,000 clients next year. We will offer an Internet subscription for $20 a month, which means we should get $100,000 a month in network usage revenue. 

We are in Ecuador, but we hope to replicate the model in other Latin American countries [and in] Africa and Asia. 

DC: How will you differentiate yourself from services offered by major telecoms? 

CC: We are a people's Internet service provider. Anybody from anywhere in the world can invest in the infrastructure. The profits don't go to a single family or a few stakeholders. It goes to everybody who's participating in this network.

We are a socially-focused company. We plan to start with very low prices. If a user did not pay a subscription for a month, we offer them an option to watch advertisements before we cancel their subscription. 

For every 5 or 6 hotspots, we plan to deploy free hotspots for an area with less connectivity.