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DePIN on Arbitrum (Open Spaces)
Recorded: May 8, 2025 Duration: 0:35:33Space Recording
Short Summary
In a dynamic discussion, industry leaders from USDAI, WeatherXM, and NodeOps shared insights on groundbreaking projects and partnerships aimed at enhancing decentralized finance and infrastructure. Highlights include USDAI's innovative approach to financing, WeatherXM's expansion of its weather station network, and NodeOps' growth in staking opportunities.
Full Transcription
Thank you. Thank you. Thank you. Thank you. you
GM, everyone.
How's it going?
GM Chase, doing great.
Good to see you, my friend.
Good to see you.
Where are you in the world right now?
Just back to Bangalore.
Just came back from Dubai.
It was a very nice token 2049 this time.
Pretty good conversations all around regarding infrastructure.
Deepin, a lot of deepin with a lot of conversations regarding deepin,
which has good amount of demand, good conversations on revenue,
traction, consumer apps.
So overall, I think the world is healing.
We are seeing more conversations
regarding the actual metrics which matter.
I agree, I agree.
Delphi put out a great report on InfraFi around USDI today and how USDAI is going to revolutionize infrastructure financing globally using blockchain rails.
So we're super excited about that.
about that.
Welcome to the stage, NoDops and Kartik from Aether. How are are we doing guys? Or should I say Department of Exefficiency?
Thanks for having us here. Doing well, doing well. Been a busy day. Super excited for this space deep in our bitrum. I think a good bunch of crowd here would have some fun.
fun.
Dream Team, Eric here
from NordOps. Great to be here.
And yeah, United
excited to be in this
place with you guys.
Cool. Yeah.
All right. Let's go
ahead and kick things off.
So, like I mentioned,
there was a great report on
InfraFi on USDA's's solution to the buildout of D-Pen hardware going forward using blockchain rails.
So, whoever's on the USDAI account, do you want to give us a little overview of what that
report was and what you guys are doing? Yeah. Hey, this is Connor, co-founder of USDAI and
Permian Labs, the development company behind it. Yeah. Thanks for setting this up. We had this report come out with Delphi earlier this week,
basically kind of walking through what we've been working on here at USDAI
for a good bit of time now.
And basically what USDAI is is a yield-bearing synthetic dollar,
And the yield comes from D-PIN hardware assets.
and the yield comes from D-PIN hardware assets.
And so we basically extend credit to these various hardware assets that are underpinning D-PIN networks.
We tokenize the assets and then give loans basically backed by those assets.
And those loans pass yield through to the USDAI synthetic dollar product. And the whole idea
behind this is really to help scale deep in networks without kind of forcing them to emit
tons of tokens and have, you know, a lot of downward sell pressure that, you know, weakens
the strength of the network generally. So if you look at kind of corollaries in traditional non-crypto-based hardware or infrastructure businesses, they're almost always financed with debt.
But because D-PIN is decentralized and the cash flows are coming on chain, you know, if you're a hardware operator that's running compute into a decentralized network or you're setting up telecom towers, you don't really get
the ability to access these traditional debt markets. And so there's kind of this gap in
the market where the solution so far with Deepin Networks has been to throw lots of tokens at
users to get them to onboard, which of course becomes very expensive and hard for that network
to scale. So the whole idea here is to kind of fill a gap and finance these assets that are cash
flowing and are good quality assets, and then pass that yield back through to DeFi users
who want yields that are uncorrelated to the rest of crypto.
You know, the ability for a GPU asset or a telecom asset to repay its debt,
it has no, you know,
is not predicated on Bitcoin price movement
or Ethereum price movement.
And so that's kind of what we've been working on
over the last couple of years, I guess.
Brilliant.
It's one of the,
I like that it converges into a very simple thing that people can understand, which is this synthetic dollar.
That is, it's taking, you know, what are technically off-chain cash flows, which is the actual, you know, revenue that's coming in from these compute or data centers, these compute
producers.
And it's packaging what is a very sophisticated financial product into something that's earning
yield in the form of just a very simple yield-bearing synthetic dollar. And it's a beautiful blend of things that are very popular
right now, which is, of course, compute build out. And I don't think that there's enough financing
in the world to build out all that compute. So being able to use digitally native, borderless
blockchain rails and attracting capital from anyone, any, anywhere,
anyone,
anywhere in the world,
makes that,
it makes that much,
much easier.
maybe,
maybe Kartik,
it'd be good for you to chime in.
Cause I know that Aether is a part of this network as well.
how are you guys going to play into the USDA ecosystem?
Yeah, I think it's a very good asset to sort of have debt back financial instruments,
especially with GPU compute, right?
So for us, the simple idea is we have this huge network of GPU compute.
Obviously, it's like a marketplace model. you have supply and demand side to it but then to make sure to constantly keep on building the network on
the supply side we need to have more and more gpu providers across the board across the globe
to come and onboard right um nowadays as as already mentioned there's not enough capital
in the world to basically finance these gpos that's where instruments like usd ai become really really efficient uh where
we can get more and more investors to chime in have have a share of uh have a share of the yield
which is in this case real yield since it's backed by actual cash flow actual revenue um so this is
how we are just like trying to partner with usd ai where we come in with the gpu suppliers who are
now looking for more and more funds or investments
to build more data centers and put on the network.
That's the part basically that we fill in here.
So Aether and USDAI slash Permian
and another company, Beam slash Merit Circle,
we set up basically a mining vehicle
to mine AI networks called Tactical Compute.
And one of the funny things,
like maybe learnings from that process is,
you know, you're generating all of this cash flow.
In many regards, it's maybe two to 300% APRs.
You know, you'll hear Deepin Network's quote,
oh, this is a six month payback period. And for us, when we hear that, you know, you'll hear Deepin Networks quote, oh, this is a six month payback period.
And for us, when we hear that, we think, well, that's really a 200% yield, right?
And so even though we're able to generate all these cash flows with this vehicle that
we set up, you know, we weren't able to get traditional financing because what is our
income in?
Oh, this is in the ATH token, right?
And like some bank is not really going to
be underwriting your earning cash flows in ATH. So having kind of a crypto native financing
solution for this stuff is just the right, you know, match for these operators. And I think
you've seen in the past, like in the RWA space, there's always been this question of adverse
selection. And we learned this
um you know we've been basically trying to service low liquidity assets for the last few years and so
we've explored the rwa space and and you know the the takeaways typically is that there's a reason
why someone is coming to crypto to get financing for that asset and the answer is like it's a bad
asset right um they're coming to crypto because they can't get financing somewhere else. Well, that doesn't hold
true if the cash flows are already natively coming on chain from these hardware assets.
And so it's really like the perfect pair of tokenized low liquidity assets with debt markets.
And that's never really made sense until really like the compute and other
high cost hardware oriented deep end networks really started to proliferate. And then that was
the first time that you'll be able to justify this. I think like 10 years from now, you'll
probably have all sorts of traditional credit markets that are running on chain. But until
you kind of prove out that the initial like
edge cases like hardware they can't get financing off chain you know that's like the the first
domino to fall um before the rest of like traditional credit markets start to come on chain
100 agree 100 agree um it it's one of the first stepping stones and opening up what a lot of
people are calling like the internet financial system or internet capital markets, which is
so much more than tokenizing an idea or like a meme coin associated with a now defunct social media site, not naming names. It's about
opening up borderless financial systems that enable the data center provider in Latin America
to source capital from anywhere in the world completely trustlessly and permissionlessly.
Good takeaway that I got from the Stealthy report, and I didn't make this model, so don't,
you know, I'm trusting the numbers as is here, but the levered strategy of levering up against
your existing hardware and taking out loans against it to buy more hardware
yielded an IRR of 93.8% and a return and a multiple on invested capital of 4.4x,
which was double the unlevered position, which had a 40.6% IRR and a 2.2x multiple on invested capital.
So it's a better strategy.
And this is why you see real estate developers,
the core weaves of the world,
who did a $7 billion financing deal with Blackstone.
It's why everyone in the world is taking on debt.
Every large enterprise in the world
with the access to these capital markets is taking on debt.
A lot of people would consider it risky, which there is some risk involved. But
if done properly and with proper risk management, this can be an extremely lucrative strategy and
can accelerate growth for teams like Aether. And it can enable broader access to anyone who wants to earn yield from these strategies.
But yeah, I know that we spent a lot of time on USDA early on,
so I want to give the mic to WeatherXM real quick.
Yeah, tell the people what it is you guys are working on and what's new with you
hello can you guys hear me okay yep hey yep this is uh alex from weatherxm um it was really
interesting to hear about the usd ai project um love to chat with you guys more we definitely
need more you know know, DeFi and
Deepin connection. So great to see that things solved. But yeah, yeah. What is WeatherXM?
We're building out a Deepin network of weather stations. We have about 10,000 deployed globally.
And our whole goal is to make the forecast better. So whether that's in agriculture for people who
want to manage crops, whether that's for energy, managing the grid. I don't know if everyone on the call heard about the big power outage in Portugal, but we're
looking to solve those types of problems. You know, agriculture, energy, emergency management,
aviation, you name it, all these rely on weather. And we're building out a decentralized global
infrastructure using deep end rewards via our native WXM token, which is on Arbitrum.
I love it. I love it. And are you able to share? I know we are chatting in Telegram today about a
new rollout program that you guys are working on. Are you able to share a little bit more about that?
Yes. Yeah, we are right now. We are doing a rollout. So previously we did a crowd fund to put stations in the global south. We raised about $600,000 to put 2000 stations in the global south, which is underserved in the sense of getting weather data and having weather stations. And so we're doing our next one. It just launched last week. So we're doing
another crowd sale where we're funding stations to go to places where the data is needed. And
so in return for funding these stations, the participants will earn token rewards and they
don't have to deploy the stations themselves. So we find deployers to place the stations in areas where the data is needed.
And then the participants of this crowd sale get the token rewards in return.
That's a really interesting model because I think a lot of people out there, if there are any D-Pen maxis in the crowd, I have a Helium hotspot and I have a Hive mapper device, but a lot of where
I'm mapping is very metropolitan areas. But what WeatherXM is offering is the ability to pay and
have weather stations set up in the places where the data is most valuable. So imagine if you could pay someone to go and set up your Helium hotspot
in a high demand location where they're paying out extra incentives at that given time.
The really, really cool model from you guys.
I'm wondering, it's become increasingly popular and it's come out that in the last few decades high frequency
trading firms like citadel jane street etc have been hiring and paying meteorologists tons of
money because you can track the prices of commodities based on you know weather in
certain regions so i'm, have you guys considered
selling some of this weather data
to firms on Wall Street and prop trading funds?
Absolutely.
And so not only is weather directly correlated
to many commodities like natural gas or rice
or pretty much any commodity that's in the real world,
but we are also seeing there's actually a thing called weather derivatives.
And so if you go to Chicago Mercantile Exchange, the demo I give a few times every week is all around weather derivatives in the traditional finance aspect.
And so there's different contracts called like HDDs and CDDs.
And so these are used by utilities to manage their natural gas risk. So what they do is they buy a CDD contract in let's say Philadelphia, because they expect
the temperature to exceed 80 degrees, which means the underlying population is going to
be running their air conditioning a lot, which is going to make them have to buy a lot of
natural gas to support the grid. And so they buy an HGD to essentially hedge their risk on natural gas on everyone
running their air conditioning. And so what's been interesting is that you can now see this
type of stuff coming on chain from things like Calci and Polymarket. You can now go bet on the
weather right now on those prediction markets saying, hey, I expect the weather to be 80 degrees
and you can get paid for it if you're right. And so we're building a lot of tools to actually
support the underlying markets. We actually launched a partnership with TrueMarkets recently
and TrueFlation to start building and supporting the on-chain weather derivatives markets. So all of our data will be used in DeFi.
And just like USD.ai is connected to DeFi, that's exactly what we're doing.
So we're connecting our weather data with actual assets in the real world.
Brilliant.
Brilliant.
I would imagine that there's some alpha to be extracted from WeatherXM data compared to the, I would assume it's satellite data that a lot of the high frequency traders if there are enough stations in the given region or if
there's a specific trade that's critically important, you know, where one region is
critically important.
Very interesting.
And we should definitely connect you.
Go ahead.
Well, I was going to say, so to your point, I think you were making people actually pay
meteorologists at these, you know, Citadel and trading firms to calculate what the weather will
be to place other bets and so you know not only do we talk to companies like that to help them
improve their forecast by providing not only better data but we actually have different models
to show we on every station this is a very little known fact, but we run up to 40 different forecast models.
And since we have the actual stations, we can tell you what the best forecast is for
every station that we have out of the 40 open models.
So whether that's produced by NOAA or NWS or, you know, the European equivalents
or a different country, right?
Japan, whoever, we can tell you which forecast performs best at each point in the world.
And so we just had like a customer in Europe say, Hey, like I've tried, you know, 50 different
weather providers to get the forecast on a dynamic line rating.
So that's the ability to pass energy through a certain line.
They need to know the exact temperatures because they can make more money.
They can send more energy to certain areas, right?
They lose a lot of energy when it goes across the line.
And so if we can give them a better forecast, they can increase their revenues by up to 50%. And so essentially, we're not only giving them exact data, we're
telling them what the best forecast is at any point in the world. And using DeFi and D-PIN,
we are also making it more affordable for them to access that information.
for them to access that information.
That's awesome.
Who would you say are the biggest consumers
of your data right now?
I mean, traditionally energy is,
energy and like national governments
are the biggest consumers of weather data.
But I mean, if you talk about just all consumers,
weather is used across, you know, thousands,
you know, like almost every industry in some capacity, right?
So, like, we had a partnership with the Olympics, for example.
They had one of our stations in one of the stadiums
when they were doing, you know, sprints and things like that
to look at the actual weather data
to see how that impacted, you know,
how fast someone's, you know, 100 meter
dash was, right? And so it could be simple as a sporting event to someone, you know, to emergency
management type, you know, where they're trying to predict flooding or tell people where to go.
So, I mean, weather data is used across many different industries. The thing that makes us
quite different though, is weather's always been top down. It's actually a lot like money in that
sense, right? It's always been controlled by the government. And so in the U.S., it's considered a public good.
And so people will pay for better data when it directly affects them, right?
Whether that's the trader who wants to make money on some specific trade or whether that's
the national government who just wants to protect their citizens.
But it's right now, from what we see, energy is probably the largest sector where we're
seeing traction.
Makes sense. Makes sense. All right. Thank you, WeatherXM.
Node Ops. Thank you.
Node Ops, thank you so much, guys, for joining the call.
Give us the TLDR on NodeOps
and things that you guys are looking forward to
or let's say the next 90 days.
What up, Chase?
Nice.
We spoke last.
We had a conversation with Eric here from NodeOps.
Of course, cheers for having us.
Yeah, for those who are TLDR about us,
we are sort of the leading ai powered
um deep in orchestration layer as part of the node ups network we have different you could say um
uh arrow store both the node ups cloud node of console which is our sort of leading nas
solution which is basically what got us to the market last year. But we're also extending our product offering to include also the security hub.
Maybe the latest development is the launch of the staking hub.
We know that staking has been around.
It's nothing novel.
It's not like we've invented the wheel or hot water.
But I think what's interesting about the staking hub is that,
which is sort of, this is a pivot to answer you
on the second level to your question
about what can folks look forward to in the next 90 days,
is that we are basically adding partners to our Staking Hub
for which we're already validators, right?
And we're providing them for each protocol
that is included on the Staking Hub.
We're launching a stake job campaign. So it's a dual incentive reward for folks who decide to stake with us. And so far,
we have testnet for, sorry, hyperliquid testnet. And I think, if I'm not mistaken, last time we
checked, last time I checked this morning was 360k plus Hype testnet tokens
and as well for Beam, right, which has been, I think,
if I'm not mistaken, I spoke to Naman earlier today,
we're validated for like 20% plus of the market.
So yeah, I think TLDLG wants more protocols to be added there.
And then also some additional news regarding what people are asking about the token.
But that's where's just sort of
that's where i'll sort of take a rest otherwise there could be more serious ramifications
and repercussions nice we will uh we will respect or respect the um reservations on sharing on the token um that's awesome you are also building out
your arbitrum chain atlas network if i'm not mistaken correct
that is correct sir and uh yeah that's in the process of uh basically what we want to do is
everything that we've done so far as a as a team you could say as a brand has always been
sort of underpinned by three principles
of sort of product first, demand first, and just revenue first.
And it's no different with this instance, right,
with the NodeOps basically marketplace,
which has been sort of we rebranded from Atlas to NodeOps
because we noticed that there was some fusion.
And, yeah, it was just sort of a repetition
and yeah it was just adding further confusion people's mind so uh so yeah right now we're
building um on new features for the node ops network to ensure that from day one people will
have basically use cases um to um to tinker with and play around with. One sort of alpha that I can give is around to having
a tool for developers to prevent vulnerabilities, right? So prevention is everything and to prevent
some of the big scams and some of the widespread hacks that sort of have become endemic in the
space. And yeah, also around templates. So yeah, we're hard at work,
but there's a lot that will be revealed
in the coming weeks, 100%.
And of course, Arbitrum is at the core of it.
Love that.
I know there have been iterations and attempts,
but can you talk to me a little bit about, you know, plans or if you guys have had discussions around actually taking the cash flows that nodes like Ather's nodes, like Huddle's nodes, or maybe even a Weather XM weather station have you had any conversations around tokenizing those
and almost creating like a pendle style you know interest rate derivatives type product or you know
what would what would that kind of look like that's a good question it's it's not something
that we've explored directly, I would say,
that you would sort of define as in the pipeline in terms.
But considering that we're always looking to sort of further,
I want to say gamify, it's probably not the right term,
but add new features to our UX across the board for our users.
And something that could potentially answer your question
only partially,
might not be satisfactory,
is that we are sort of totally devoted
to bringing our revenue on chain, right?
So that would be no different
if and when we decide to go forward
with what you're asking.
So right now on our team dashboard,
you're able to track essentially transparently and it's open source.
All our revenue numbers and it's also trackable on Deepin Ninja, as is the ethers here with fellow department on X efficiency.
So yeah, there will be no different, I think.
I don't know if that answers your question partially, but if and when we were to decide to go down that route,
we'd make sure that it would be so transparent and for everyone
to see and track.
Fantastic.
Fantastic.
Tell me a little bit about how you guys are able to support these offerings from a number of different protocols.
You can help run Aether nodes, Huddle nodes, Elixir nodes.
I just had it up a second ago, but there's like 40 different offerings on there.
So is there complexity with adding each one or is it very simple that's a good question um i would say quite all credit goes to the team right like
i always say internally that i've got the easiest gig which is just to convey uh the the hardest
job which is done by the by the tech team right which is you could see if you look at it like a
analogy of a car there at the engine i'm sort of i would say the driver no not at all the
driver but maybe the paint that you see of the car right and um it is complex but the team has gotten
iteratively better to pivot and show that we're almost sort of node agnostic from an infra standpoint
right and there is no node setup that we are sort of unfamiliar with, you could say,
because we've seen it all across the board.
So the node narrative was fully written in 2024.
That's how we were able.
It was the main contributor to us being able to achieve 3.4 million ARR,
which is sort of unheard of, or at least was for me,
ever since I've
been in this space so um so I would say we've we've gotten pretty good at nodes right in terms
of management orchestration and just making the whole experience into and very seamless
for for retail users right and because it is something that more often than not for the average web 3.0 amateur nodes are seen as plunky
or not necessarily too trendy and fashionable.
But we've set up a UI and UX from end to end
that sort of obstructed away all complexities,
including what you are sort of asserting to.
So yeah, there is no node setup that we shy away from.
Nice.
And you make the life of the node holders far, far easier
because many of us don't want to have to worry
about actually running the node.
We are just looking for a form of passive cash flows.
That is correct.
I think at the end of the day,
why I like this space extremely,
like so much, sorry,
is that there's continuous innovation, right?
And it's always underpinned by a curiosity
by the end user to find new ways
to be incentivized
and essentially be motivated, right?
So that's also translated on the product front.
And that's what we're trying to do.
We're trying to always make the UI more intuitive.
I think it was like a couple of months back,
we released a new version of our console,
which is the home of the NAS service
within the NodeOps network.
And yeah, that was all
sort of underpinned by
the principle and the premise to make
the node management side of things
just simpler and
more seamless for the end user
and the feedback we've been able to collect
so far from our users been sort of
in that direction but of course we're open to
novel comments from all
our users because that's what I mean our final lifeblood yeah i would say so brilliant brilliant all right ayush thank you
so much for waiting patiently um ayush is with the huddle 01 team, one of the most recent Arbitrum node sales
and also a beloved Arbitrum chain.
Ayush, give us the... Thank you.
