What You Need to Know About Teleport
Solana DePIN Project Decentralizing Rideshare
Markets are up this Thanksgiving, with $BTC inching up towards $38k.
Besides the usual $BTC and $ETH, more market participants are including $SOL on their list of top-tier assets to hold during a bull market.
One aspect of Solana that many might not know about is its growing ecosystem of Decentralized Physical Infrastructure Network (DePIN) projects.
In a previous edition, we briefed readers on Blackbird, an app rewarding users with tokens and other rewards for dining at certain restaurants. In today’s edition, we’re giving you the scoop on Teleport, a decentralized ride-sharing platform.
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News:
- Blast Blockchain Attracts $225M Amid Skepticism: Despite concerns, the upcoming Blast layer-2 blockchain has secured over $225 million in staked assets, with its unique reward system drawing attention.
- Binance's Ex-CEO CZ Faces U.S. Travel Restrictions: Changpeng Zhao, former CEO of Binance, is barred from leaving the U.S. until his February sentencing for violating the Bank Secrecy Act, with prosecutors citing flight risk concerns.
- Kraken's Co-Founder Comments on Binance Settlement: Jesse Powell of Kraken reflects on the fairness in the crypto industry following Binance's $4.3 billion fine and the ongoing challenges for crypto exchanges.
- Bitcoin User Pays Record $3.1M Transaction Fee: A Bitcoin user accidentally paid a staggering $3.1 million fee for a single transaction, setting a new record in the cryptocurrency network.
Inflows
- $UNI and $MATIC are leading with substantial Smart Money inflows, $208,424 and $145,240 respectively, indicating a strong market presence.
- Other significant inflows are seen in $BLUR with $106,295, showing robust growth, and $HarryPotterObamaSonic10Inu with $100,086, reflecting a notable uptrend.
Outflows
- $MMX and $ARB are experiencing the highest Smart Money outflows, $234,005 and $213,056 respectively, despite their market cap strength.
- Other assets like $SNX and $ATOR also faced outflows, with $ATOR notably down 6% in the last 24 hours after its roadmap update.
Background on Teleport
Teleport is a decentralized rideshare platform.
Teleport is building decentralized ride sharing, allowing creators to publish their own local ridesharing apps in their region.
The platform is apart of a growing ecosystem of DePIN projects including:
Render allows users to monetize their extra GPU space. RNDR has seen a significant pump recently and is one of the top AI tokens in crypto.
(Read our Analyst Insight on Render here)
Hivemapper aims to develop the world’s most up-to-date & AI-powered map, by rewarding contributing drivers with dashcams in $HONEY tokens.
Helium incentivizes users to provide local hotspot coverage in exchange for native $HNT tokens.
to name a few…
Insights Behind Teleport
Paul Bohm, Founder of Teleport, explains that his interest in decentralization dates back to 2012, not just 2016.
He shares his background as a protocol designer at Dropbox and how he became fascinated with BTC.
Paul discusses the Byzantine General's problem and how Satoshi's solution inspired him to explore decentralization further. He highlights examples like controlling Twitter or centralized issuance of money, where centralized authority can lead to abuse of power.
Paul believes that decentralizing ride-sharing is important due to past instances of pricing authority abuse in marketplaces.
Ridesharing platforms involve middlemen who are incentivized to charge customers as much as possible, while not necessarily paying drivers more.
Paul adds that this creates a squeeze in the middle where the platform maximizes its own profits at the expense of both drivers and customers.
Switching from one ride-sharing platform to another requires coordination among drivers and riders.
If everyone could switch over simultaneously, it would be ideal, but achieving this is challenging due to network effects. Uber and Lyft argue that their drivers are independent contractors, which gives them control over pricing.
Paul proposes a similar approach for ride-sharing as $BTC's decentralized issuance, where drivers and riders are incentivized through market price competition and network rewards.
This combination of decentralization and coordination is crucial for the success of a new ride-sharing protocol.
How Teleport Works
Teleport is a mobile application that connects to rideshare servers.
It is centralized in the sense that it needs to comply with app store requirements, but it does not store any data on its servers.
Teleport can talk to any rideshare server, as all transactions, reputation, identity checks, and money flows are compatible across the Trip protocol.
The protocol allows for multiple client apps to be built on top of it.
Paul says that to create a successful ride-sharing protocol, it needs to be both decentralized and have effective distribution.
Teleport serves as the entry point to the protocol, while the actual protocol itself is not teleport.
Cryptocurrency enables decentralization by allowing different clients to participate in the system.
Effective distribution mechanisms, such as referral systems or affiliate marketing, help attract users to the platform.
$BTC’s success was attributed to its innovative product combined with rewards that incentivized early adoption.
Paul says that a successful ride-sharing protocol requires a system that is both decentralized and has effective distribution mechanisms.
Achieving decentralization means allowing different clients to participate in the protocol.
Effective distribution ensures that the protocol gains widespread adoption among drivers and riders.
Teleport determines the user's location and connects to rideshare servers in their local area.
Rideshare servers are operated by licensed, insured providers who offer customer support and services. Multiple operators can be connected to.
Paul says that when a rider orders a ride, Teleport negotiates with the drivers connected to the local operators for a fair rate.
Different operators may offer different rates.
The transaction is facilitated through the Solana network using USDC or a credit card payment.
This helps maintain operator honesty and encourages competition based on service quality as well as price.
Teleport is not directly involved with rideshare operators that connect customers, drivers, and riders.
It acts as a web browser for the open web and can communicate with any rideshare server.
There is a distinction between Teleport and rideshare operators is similar to using Google Chrome as a web browser while accessing different websites hosted by separate servers.
Teleport's compatibility with various operators ensures decentralization within the Trip protocol framework.
Why Build Teleport on Solana?
Transactions on the Solana blockchain allow for provable revenue, enabling rewards for real rides and ensuring accurate ETA reporting by operators. It also promotes competition based on price and quality of service among operators.
Using Solana allows for provable revenue, making it possible to reward users for real rides and provide proof of revenue to entities.
Transactions on Solana enable accurate ETA reporting by comparing the estimated time of arrival provided by operators with actual customer experience feedback.
Teleport is rewarding their users with cNFTs weekly.
The cost of an NFT is relatively low compared to other industries, but using cNFTs can result in higher costs due to network congestion on Solana.
Governance is essential in decentralized systems to make decisions such as updating information, determining verifiers, and selecting operators for different locations. Instant settlement is crucial for services like ride-sharing, where users cannot wait for long transaction times.
There are non-monetary transactions and data on-chain that also require regular updates.
How Governance Plays a Role
Governance plays a significant role in decentralized systems, allowing users to have a say in decision-making processes.
Users who hold cNFT badges may have influence over certain parameters within the network.
A separate governance token on Solana may be created to facilitate participation in governance decisions.
Paul says that the level of excitement and participation in governance among users of Teleport is still evolving, with questions about voting mechanisms and representation.
Governance can operate on multiple levels, including addressing issues at the local level and allowing users to blacklist specific operators.
He adds that the presence of multiple operators in a market prevents excessive pricing by any single operator. U
sers have the option to choose alternative operators if they feel that existing ones are corrupt or not treating drivers well.
Paul says that starting a competing operator with fairer pricing is a form of governance and ensures competition within the network.
While governance is important, most users may not be actively involved on a daily basis.
However, having the ability to voice concerns or exit when necessary is crucial.
Go-to-Market and Market Forces
Crypto could help coordinate drivers and riders by providing incentives for both parties to join the network.
Attracting demand from users like downloading an app can be challenging but can be addressed through marketing strategies.
Decentralized protocols aim to reduce fees charged by centralized services like Uber, ensuring that more earnings go directly to drivers.
The presence of multiple local operators prevents centralization at one layer but still requires effective governance mechanisms to maintain fair competition.
Uber spends about 2.5 billion dollars per year on fixed costs, which include buildings, employees, and debt interest payments.
Fixed costs account for only 20% of Uber's total cost.
The remaining 80% is attributed to the cost of revenue or goods served, including marketing expenses related to specific rides.
By spending money on acquiring new drivers and paying them less, Uber can generate higher revenue as a monopolist.
Supply and demand elasticity plays a role here - if drivers are paid more, they tend to spend more hours driving, leading to more drivers coming online.
Similarly, lower prices attract more customers.
This strategy is only possible due to Uber's monopoly status.
He adds that to provide utility and good response time in a specific metropolitan area, it is essential to have an atomic network with drivers available locally. The number of drivers needed depends on factors such as idle time and wait time for customers. In New York City, for example, approximately one driver per square mile is required to provide good service.
A local market includes a specific metropolitan area where drivers can realistically serve customers.
Factors such as idle time for drivers and wait time for customers determine the quality of service.
In New York City, a response time of three to five minutes is considered acceptable.
An agent-based model combines census data with information from transportation network companies (TNCs) to determine the number of cars needed in a specific location.
By randomly placing drivers on a map based on population density, it is possible to calculate how many cars are required to meet demand.
If enough drivers and riders join the network, it becomes possible to lower rates while increasing earnings for drivers.
This approach relies on permissionless marketing, where individuals recruit each other instead of relying on corporate budgets.
It is uncertain who the first customers will be, but leveraging the "degen energy" of crypto enthusiasts could be a possibility.
The subset of Uber drivers who are also crypto enthusiasts may be early adopters of rideshare services powered by blockchain technology.
The potential market size for ride-sharing is significant, with estimates ranging from $300 billion to $800 billion dollars by 2030.
If the protocol votes for a 5% protocol fee, it could result in lower fees compared to Uber's up to 40% fee.
How Drivers, Users, and Dispatchers Get Started on Teleport
Paul says that drivers can begin building their business on the protocol by obtaining the necessary licenses and insurance. Setting up dispatch in different cities is relatively straightforward, with interest already shown by large limousine companies. Dispatchers have incentives such as setting their own pricing and potentially earning 5% of each ride.
He says that initially, coverage may be limited city by city. A trip explorer feature will be launched, similar to other platforms like Solana Compass or Solana Beach, to provide an overview of available markets. Currently, there are operators in Texas and Florida, allowing passengers in those states to connect with local operators.
Paul says that drivers, writers, operators, verifiers, and balances can earn network rewards through weekly issuance. It is not necessary for everyone to understand the protocol initially; a small portion of people adopting it can create a positive impact. The rewards serve as an attractive extra benefit for users. Being one of the first users in a city where the protocol works reduces risk and creates a sense of being part of something new.
Paul says that Teleport offers coordination tools and rewards that can be appealing in a market with substantial potential. Users may find it attractive due to lower fees, higher driver earnings, and the opportunity to earn rewards.
He adds that early adoption can lead to reduced risk and increased confidence in the protocol's success. Different individuals may have different perspectives on the usefulness of the rewards and benefits offered by the protocol.
How to Ensure Consistency and Quality of Service
Pricing plays a significant role in attracting customers.
Consistency in quality is important for user satisfaction.
Background checks for drivers are conducted similarly across different platforms.
Customer support is essential but can be outsourced to specialized companies.
Actuarial solutions can help manage customer complaints effectively.
Providing incentives and rewards can enhance user experience.
What Teleport Means for Solana
Paul says that building on the Solana blockchain provides technical advantages.
The focus now shifts towards user acquisition and retention. Attracting users requires offering unique features or benefits.
He believes that Solana's technology is already capable enough for this integration.
Paul adds that Solana has the potential to onboard millions of drivers and users into their network. Drivers who use ride-sharing apps frequently can be targeted as potential users. By targeting people where they are and focusing on activities they do every day, such as driving, Solana can facilitate easy onboarding.
Mert adds that the success of Solana could enable people to build businesses on top of the protocol. Distribution is crucial for building a successful product in crypto. Crypto relies on finding alternate ways of coordinating people for distribution rather than traditional marketing methods.
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