Andrena (DAWN): Decentralized Internet vs. Starlink's Satellites

Oct 10, 2024

The aspiration for a decentralized Internet has been a guiding principle since the creation of ARPANET over fifty years ago. ARPANET was designed to establish a collaborative and distributed digital communication network. However, the commercialization and subsequent industrialization of the Internet in the late 1990s led to significant centralization. This period saw the emergence of monopolies and duopolies that gained control over substantial portions of Internet infrastructure. Presently, over 80 million Americans are limited to a single Internet Service Provider (ISP), with the disparity between wholesale and retail Internet prices sometimes exceeding a factor of 100.

In response to this imbalance, pioneering communities have initiated efforts to construct user-powered wireless networks aimed at delivering more open, equitable, and affordable Internet services. Notable examples include Roofnet (2004), Open-Mesh (2007), Guifi.net (2004), and NYC Mesh (2013). While these initiatives have made commendable progress in community networking, they often faced challenges related to technology scalability and logistical complexities.

Recent advancements in wireless technology and distributed systems have unlocked the potential to scale these community-driven networks to national and global levels. Innovations such as multi-gigabit wireless capacities, mechanical beamforming, and the availability of high-frequency unlicensed spectrum have positioned wireless solutions as viable competitors to fiber-optic networks, but at a fraction of the cost. Moreover, developments in privacy-centric cryptography, consensus mechanisms, and blockchain scalability are facilitating complex decentralized coordination on a global scale.

Simplified Diagram of Internet Infrastructure

To comprehend the significance of Andrena's DAWN protocol, it is essential to understand the existing Internet infrastructure, which operates across three distinct tiers:

Tier 1: The global backbone of the Internet, comprising subsea fiber-optic cables and large-scale data center interconnections. This tier connects continents and serves as the foundational layer for global Internet traffic.
Tier 2: Regional fiber providers, such as Crown Castle, operate at this level. They own and manage regional fiber networks that link major hubs like cities and data centers.
Tier 3: This tier includes local Internet distributors like Andrena, Comcast, and Verizon, which deliver Internet services to consumers within specific markets.

Traditional ISPs often incur substantial upfront capital expenditures (CAPEX), primarily due to the costs associated with installing fiber-optic cables from data centers to individual homes and businesses. This "last-mile" connectivity is both time-consuming and expensive, and the high costs are typically passed on to consumers through elevated monthly fees.

Andrena's Disruptive Approach

Andrena disrupts the conventional ISP model by utilizing point-to-multi-point wireless antennas instead of relying solely on fiber-optic connections for last-mile delivery. By transmitting high-speed data from the rooftops of data centers and buildings directly to end-users, Andrena eliminates the need for costly infrastructure investments associated with laying fiber-optic cables to each residence or business.

Advantages Over Traditional Models

Scalability and Flexibility: Andrena's model allows for infrastructure growth that aligns with actual demand. This ensures immediate revenue generation upon deployment, as infrastructure is established only where and when it is needed.
Cost Efficiency: By avoiding the extensive CAPEX of laying fiber-optic cables, Andrena can offer Internet services at a significantly reduced cost, passing savings on to consumers.
Rapid Deployment: The wireless approach facilitates quicker installation and expansion compared to the lengthy process of fiber-optic cable deployment.

Comparison with Satellite-Based Competitors

Competitors like Starlink invest heavily in launching satellites to provide Internet connectivity, involving high CAPEX and longer timelines to achieve returns on investment. In contrast, Andrena's ground-based wireless infrastructure requires significantly less upfront investment and can generate immediate revenue upon deployment.

Core Team:

Co-Founder & CEO: Neil Chatterjee
Co-Founder & CPO: James Smits
Co-Founder (May 2018 - Feb 2024): Nick De Veaux
CFO & COO: Mark Wang
Chief Revenue Officer (CRO): Anthony Ontiveros
Chief Business Officer (CBO): Benedikt Westrick
Advisor: Cameron Coker

Andrena (DAWN) Funding Insights - Total Raised: $35.6M

Funding Rounds:

Pre Seed Round: Date: 1 Mar 2018 | Amount Raised: Undisclosed Investors: FJ Labs, Yes VC, Max Ventures, Castle Island Ventures, Afore Capital
Seed Round: Date: 1 Oct 2018 | Amount Raised: Undisclosed Investors: Max Ventures
Seed Round: Date: 20 Nov 2019 | Amount Raised: $2.6M
Lead Investor: 645 Ventures Selected Investors: Ax Ventures, Marstar Investments, Imagination Capital, FJ Labs, Castle Island Ventures, Afore Capital, 9Yards Capital
Series A Round: Date: 27 Feb 2023 | Amount Raised: $15.00M Lead Investor: DragonFly Capital Selected Investors: Castle Island Ventures, Blockchange Ventures, FJ Labs, Escape Velocity (EV3), Afore Capital, +2
Extended Series A Round: Date: 7 Aug 2024 | Amount Raised: $18.00M Lead Investor: DragonFly Capital Selected Investors: CMT Digital, ParaFi Capital, 6th Man Ventures, Wintermute, Castle Island Ventures, Robot Ventures, Lattice, Token Metrics, Moon Capital, Cogitent Ventures, Gaingels, Modular Capital, Advancit Capital, Tangent, Double Down, Silvermine, Trident Digital, Triton Funds

DAWN Network Overview

DAWN orchestrates a decentralized network of rooftop robotic radios, forming a self-healing, multi-gigabit, autonomous last-mile wireless network. The goal is to create a fixed Internet connectivity solution that frees citizens from reliance on incumbent ISP monopolies.

Node Types in DAWN

Note: Bandwidth Nodes (BN) provide the original source of connectivity, either through wholesale IP transit, Internet Exchanges, or Direct-Internet-Access connections. Connecting to Distribution Nodes (DNs), BNs, and DNs forms the backbone network, which makes high capacity backhaul available to End-Users (EU) across the last-mile. BNs sign smart contracts with DNs to purchase an Internet plan to provide service to End-Users (EU).

Participants in the DAWN network fulfill specific roles, each contributing to the network's functionality:

Bandwidth Nodes (BNs): These nodes possess resellable wholesale Internet capacity, utilizing DAWN-approved point-to-multipoint radios to deliver downstream connectivity at speeds over 1 Gbps within a five-mile line-of-sight radius, serving 15 to 100 receiving nodes.
Distribution Nodes (DNs): Located on commercial or residential properties, DNs receive bandwidth from BNs and distribute it downstream. They are equipped with robotic antenna systems and form the core of DAWN's self-healing wireless network by connecting to multiple BNs and other DNs in real time.
End-Users (EUs): EUs are the primary consumers of bandwidth in the DAWN ecosystem, receiving bandwidth distributed by DNs.
Foundation: The Foundation manages multisignature smart contracts to regulate node interactions, handling authentication, blockchain operations, internode communication, regulatory compliance, and payment processing, among other global network services.

Wireless Equipment and the Robotic Antenna System (RAS)

DAWN is designed to be hardware vendor-agnostic, aiming to leverage the latest advancements in wireless technology. The initial focus is on the 60 GHz and other millimeter-wave platforms, as well as the 6 GHz band. BNs and DNs employ a combination of point-to-multipoint and point-to-point radios and antennas, enhanced by an electromechanical beam-steering system known as the Robotic Antenna System (RAS).

Features of the RAS

Self-Healing Capability: Allows for automatic reconfiguration in response to network changes or failures without manual intervention.
Mechanical Beamforming: Enables dynamic adjustment of antenna directionality to optimize connections and enhance network resilience and performance.
Platform Adaptability: Designed as a platform compatible with any generation of wireless hardware, ensuring long-term usability and ease of upgrades.

Routing Elements

Instead of dedicated routing devices, DAWN utilizes general-purpose computing machines with cloud-native routing capabilities:

Software Applications: Employs routing software such as Vector Packet Processing (VPP), Quagga, Bird, and FRRouting (FRR) based on performance requirements.
Protocol Support: Primarily uses IPv6 for Layer 3 protocols, with dual-stack support for IPv4 to accommodate devices and systems still reliant on IPv4.
Routing Protocols: Implements external Border Gateway Protocol (eBGP) with enhanced security features to manage network traffic efficiently. Each node operates similarly to a traditional Internet Autonomous System (AS), integrating seamlessly into the backbone network architecture.

Network Trust and Validation Mechanisms

In a decentralized network like DAWN, traditional centralized trust models are replaced with cryptographic proofs and decentralized verification to ensure network integrity and incentivize participation.

Note: DAWN will use outside challengers for various nodes to prove their available network capacity. The diagram above illustrates how these proofs rely on Solana to create a trust-free evaluation of the status of the network, including available capacity, latency, jitter, etc.

Service Contracts

DAWN defines three types of service contracts, which are settled in DAWN tokens:

Federal Contracts: These provide incentives from the Foundation to network nodes, promoting their participation and ensuring the growth and maintenance of the network infrastructure.
Backbone Contracts: Agreements between Bandwidth Nodes and Distribution Nodes, outlining the terms for BNs to supply bandwidth to DNs for downstream distribution.
Access Contracts: Define agreements between Distribution Nodes and End-Users, detailing the terms of bandwidth consumption, service levels, and expectations.

Pricing Factors in Contracts

Contracts are formulated based on several key factors:

Bandwidth Reservation: The amount of backhaul bandwidth allocated to the consumer.
Data Served: The total volume of data transferred between the supplier and the consumer.
Location: Geographic areas with higher expected demand may influence incentives and pricing.
Oversubscription Ratio: The ratio of committed output bandwidth to the received bandwidth, affecting service quality and pricing.

Cryptographic Proofs for Network Resources

DAWN employs cryptographic proofs sourced from a decentralized network of "watchtower" nodes managed by Witness Chain. These proofs provide robust crypto-economic guarantees, replacing the need for centralized verification systems.

Proof of Backhaul

The function of this system is to measure a BN or DN's backhaul bandwidth capacity through decentralized speed tests. The process involves challengers sending data payloads to nodes and measuring the response speed and latency to assess capacity. This information is then used to determine bandwidth reservation and oversubscription ratios within service contracts.

Proof of Service

This system functions as a decentralized data metering system for billing and settlement. It reconciles signed usage metrics from both parties to determine the actual data served. The benefit of this approach is that it eliminates the need for centralized billing providers, allowing for a permissionless settlement system.

Proof of Location

The function of this system is to verify that a DAWN node is located at its claimed geographic position. This process involves two layers: Layer 1 uses wired proofs and internet delay-distance curves to confirm BN locations, while Layer 2 employs decentralized radio-based triangulation, with GNSS as a backup, to accurately pinpoint DN and BN locations.

Proof of Frequency

This system manages frequency coordination to ensure efficient frequency reuse and minimize interference. Nodes stake tokens to gain exclusive access to specific frequency channels. Neighboring nodes then scan these frequencies to validate proper channel utilization, earning rewards through smart contracts. Additionally, the Foundation issues Geographic Information System (GIS) challenges to validate wireless propagation models and signal thresholds.

Blockchain Ecosystem Integration

DAWN's service contracts and proofs are deployed on the Solana blockchain to ensure high performance and scalability:

Proof of Backhaul Contracts: Operate on-chain, with validators running software to verify node capacity using their excess bandwidth (Currently, the DAWN Validator Chrome Extension has over 400,000 users)
Proof of Service Contracts: Implemented as payment channel contracts with tokens held in escrow, facilitating secure and transparent transactions.
Proof of Location Oracles: Deployed as optimistic oracles secured by the watchtower network, providing reliable location verification.
Service Contract Integration: Contracts interact with these oracles based on predefined terms, enabling a trustless and decentralized verification system.

Tokenomics of DAWN

DAWN's tokenomics are meticulously designed to support network growth, incentivize active participation, and ensure long-term sustainability.

Functions and Utility of DAWN Tokens

DAWN tokens serve multiple critical functions within the network:

Incentivization of Participation: BNs, DNs, and EUs earn tokens for contributing to the network, with higher rewards offered to early adopters to accelerate expansion.
Facilitation of Transactions: Tokens are used to buy, sell, and trade Internet connectivity, with user-friendly mobile applications ensuring easy access.
Coordination of Resource Access: Tokens manage access to resources like bandwidth and frequency, while staking ensures fair resource allocation in a trust-free environment.

Flexible Token Supply Model

DAWN employs a flexible token supply model to align with the network's growth and technological evolution:

Continuous Innovation Support: New tokens are minted to fuel investments in emerging technologies and network expansion, directly aligning token issuance with tangible infrastructure growth.
Economic Stability Management: Controlled inflation helps mitigate risks for staked token holders, while automated token burns prevent excessive returns and keep inflation in check.
Sustainable Growth Promotion: DAWN's token supply model adapts to market dynamics and technological advancements, ensuring long-term network viability and the integration of future wireless technologies.

The allocation of DAWN tokens and the reward mechanisms are structured to achieve several key objectives:

Early Adopter Incentives: Early participants receive higher rewards, driving initial network growth and accelerating market validation toward commercial viability.
Network Security Enhancement: Tokens incentivize robust network security and validator participation, enabling secure, trustless interactions between nodes.
Resource Provisioning: Nodes that provide essential resources like bandwidth and hardware are rewarded, promoting cost-effective network activity and user adoption.

Incentivized Behaviors and Actions

The DAWN protocol incentivizes specific behaviors to ensure a healthy and sustainable network ecosystem. Bandwidth Nodes (BNs) providing verifiable bandwidth are rewarded with tokens proportional to their capacity contribution. Nodes activating antennas in strategic regions receive tokens to help offset initial deployment costs, while those in high-demand areas benefit from additional incentives through reward multipliers. Participants who validate network performance and data integrity are also rewarded. Distribution Nodes (DNs) delivering services to End-Users (EUs) earn tokens based on transaction values, and nodes offering backup capacity or resolving outages promptly receive further rewards.

The Medallion System

The Medallion system is a pivotal component of DAWN's tokenomics, designed to incentivize network development in high-potential geographic areas:

Acquisition and Delegation

Staking Requirement: Participants stake 100,000 DAWN tokens to acquire a Medallion.
Bonding Curve Pricing: The cost of Medallions increases with each additional issuance in the same area, encouraging early participation.
Geographic Assignment: Medallions are delegated to specific geographic areas using Uber's H3 hex codes and associated with particular technologies (e.g., 60 GHz mmWave).

Incentive Mechanisms

Reward Multipliers: Delegation of Medallions triggers reward multipliers in the designated area, incentivizing node operators to deploy infrastructure.
Revenue Sharing: Medallion holders receive 12% of all bandwidth transaction revenues within their assigned area.

Inflation and Burn Mechanisms

Staking tokens for a Medallion results in an equivalent number of tokens being minted for rewards in that area. To prevent inflation, excess returns trigger token burns: no burn occurs up to 50% yield, 10% of excess returns are burned between 50%-100%, and 30% are burned above 100% yield. Additionally, any unallocated tokens due to insufficient deployment are burned to maintain economic stability.

Economic Impact

Early Investment Incentives: Early participants benefit from lower costs and higher potential returns, stimulating initial growth.
Inflation Control: Burn mechanisms ensure the token economy remains stable and sustainable.
Long-Term Growth Promotion: Aligns incentives for continuous deployment of new technologies and network expansion.

Staking Incentives and Resource Management

Staking plays a critical role in managing scarce network resources and ensuring equitable access:

Frequency Staking: Nodes stake tokens for access to specific frequency channels, with neighboring nodes validating proper usage through Proof of Frequency.
IP Space Staking: Tokens are staked to acquire scarce IPv4 and IPv6 address space, supporting network scalability and managing limited resources.
Airtime Staking: Downstream nodes stake tokens to secure priority airtime in point-to-multipoint deployments, optimizing network performance.
Packet Priority Staking: Tokens are staked to prioritize packet flow on oversubscribed links, enhancing service quality and traffic management.

Initial Network Deployment and Partnerships

To bootstrap the DAWN network, strategic partnerships have been established with existing ISPs to leverage their infrastructure and resources.

Key Partnerships: Andrena (AS30038), a hybrid fiber and wireless ISP, provides network resources and expertise, while Flume (AS398816) supports network coverage expansion and deployment in New York City.
Network Coverage and Expansion: These partnerships enable DAWN to reach around 3 million households in New York City and Philadelphia, utilizing existing infrastructure for rapid deployment.
IP Space Allocation: BNs and DNs receive /56 IPv6 space, with Andrena donating a /38 IPv6 subnet for 262,144 nodes. Additionally, Andrena contributes a /24 IPv4 subnet for legacy support, allowing private IPv4 address distribution via CGNAT.

Day-One Network Supply

DAWN aims to ensure substantial network capacity from the outset to meet anticipated demand.

Bandwidth Nodes (BNs)

Initial Locations: 375 Pearl Street (NY), 882 3rd Avenue (Brooklyn), 165 Halsey Street (Newark), 401 N Broad Street (Philadelphia).
Facilities: Carrier-neutral data centers with access to wholesale IP transit and Internet Exchanges.

Distribution Nodes (DNs)

Andrena's Contribution: Provides 240 DNs across 40 sites.
Capacity: Each DN can serve 15 nodes, totaling 3,600 downstream nodes.
Economic Impact: Potential to support approximately $240,000 in monthly on-chain Gross Merchandise Value (GMV), assuming competitive pricing.

Protocol Testing and Development

Initial Deployment: DAWN's protocol has been successfully deployed across 30 households in Newark, NJ.
Scaling Efforts: Expanded testing across 3,000 subscribers in a controlled environment to ensure robustness.
Revenue Generation: Currently capturing approximately $1 million in Annual Recurring Revenue (ARR) on-chain.
Seamless Transition: Migration from traditional Web2 systems to the DAWN Web3 platform has been smooth for both residents and property owners.
Development Platforms: Initial testnet built on Caldera and Arbitrum Nitro, with ongoing development on Solana.

Andrena and DAWN Compared to Competitors

Advantages Over Decentralized Competitors

Direct Consumer Focus: Unlike protocols that repurpose unused bandwidth for activities like web scraping (e.g., the Grass protocol), DAWN focuses on delivering affordable Internet directly to consumers.
Established Infrastructure: Builds upon Andrena's existing infrastructure, providing a solid foundation and immediate usability.
Token Incentive Structure: While incorporating token incentives, DAWN does not rely solely on them, differentiating it from projects dependent entirely on tokenomics.

Advantages Over Traditional ISPs and Satellite Providers

Lower CAPEX Requirements: Avoids the significant capital expenditures associated with fiber-optic cable installation and satellite deployment.
Immediate Revenue Generation: Aligns infrastructure growth with demand, ensuring revenues and profits from the onset.
Scalability and Flexibility: Can rapidly scale in response to market demand without the delays inherent in laying physical cables or launching satellites.

Economic Implications for Consumers

With traditional Internet services, consumers may pay around $100 per month for connectivity. DAWN's model involves an upfront investment of approximately $200 to $1,000 for the necessary hardware (depending on indoor or outdoor node requirements), followed by significantly reduced monthly costs of $10 to $20. This pricing structure allows users to recoup their initial investment within two to three months, offering a much faster payback period compared to other technologies like solar panels, which may take five to six years.

Conclusion

DAWN represents a transformative approach to Internet connectivity, leveraging decentralized technologies to empower individuals and communities. By combining advancements in wireless hardware, cryptographic proofs, and blockchain-based incentives, DAWN aims to:

Disrupt Traditional ISPs by reducing reliance on monopolistic service providers and lowering costs to improve access for end-users.
Promote Decentralization by enabling "wireless independence" through community-driven infrastructure and fostering a more open and fair Internet ecosystem.
Encourage Innovation through flexible tokenomics that support continuous technological advancements and align incentives for all stakeholders to contribute to network growth.

The initial deployment, supported by partnerships with established ISPs like Andrena and Flume, provides a strong foundation for DAWN's expansion. As the network scales, it has the potential to reshape the Internet landscape, making connectivity more accessible, affordable, and equitable.

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