Project Highlight: Satellite signal correction with GEODNET

Disclaimer: This is not financial advice. Anything stated in this article is for informational purposes only and should not be relied upon as a basis for investment decisions. Triton may maintain positions in any of the assets or projects discussed on this website.

Introduction

When speaking with more traditionally focused investors, the question often comes up: where does the introduction of blockchain improve upon existing business models? Though we’ve highlighted several use cases in the past (specifically around trading infrastructure,  decentralized AI compute resources and gaming), we’ll take a closer look at an application likely not on many investor’s maps: satellite signal correction through real time kinematics for robotics and autonomous navigation.

GEODNET: Real Time Kinematics 

GEODNET, or as their friends call it, the Global Earth Observation Decentralized Network, is a real-time kinematics network built to provide precision real time positioning data for robotics and industrial applications at far greater accuracy than traditional GPS can offer. To do this, GEODNET is building a global network of GNSS (“global navigation satellite system”) reference stations that can provide centimeter-level accuracy for devices, known as ‘rovers’, within a 20-kilometer radius. Rovers entail an expansive set of hardware applications, ranging from static survey and construction equipment to robotic lawnmowers, agriculture equipment, smart watches or self-driving cars and drones. That is, any device that requires real-time positioning capabilities at far greater precision than the 10s of meters that GPS enables today. The ultimate goal? Build a web of 100,000 geographically dispersed stations to provide the densest and most consistent RTK network in the world. 

Source: GEODNET console via Dune

Existing competing GNSS correction networks are largely developed via public funding or research organizations in a somewhat ad hoc fashion and on largely regional bases, or have been slowly constructed by large industrials companies over decades in order to offer data services on top of their core hardware/machinery products. These divergent approaches have led to a lack of standardization in industry and created major frictions arising from differences in networks/availability across regions. Until GEODNET, the largest RTK network had ~5,000 stations globally and was largely developed over decades by a ~$5B/year industrials company with concentrated regional coverage. 

Source: GEODNET’s differentiation in the market is clear via Inside GNSS

Through traditional models, infrastructure providing global coverage would likely be on par with building out a 4G network, rising to billions in upfront capital. However, in a span of just 3 years GEODNET has already built a network over twice as large (12,700) for a tiny fraction of the cost, with coverage across 4,400 cities in 142 countries. Through traditional approaches, this would likely run upwards of $250-$300M investment and any additional associated recurring rent/lease payments. For GEODNET, those base stations collectively cost less than $10M. The unlock here is how GEODNET is uniquely able to leverage its decentralized infrastructure approach and novel token incentive design to bootstrap this network without having to take the hit of the steep upfront capital requirements that would be necessary otherwise. Individuals can purchase those hardware miners for ~$700 and immediately begin earning rewards to offset that cost.   

The map below shows just how extensive GEODNET’s coverage already is, especially in developed countries. For developing countries, GEODNET is likely the only commercial entity that can feasibly build out a network in any sustainable fashion, let alone with globally consistent provision. The upfront development cost is too high and customer density too low for traditional RTK providers to justify significant capital outlays. In the long run, it is reasonable to expect these incumbents to adopt GEODNET’s coverage in these areas and repackage that data for use by their own customers.  

Source: GEODNET RTK network coverage

The Model

GEODNET monetizes its network as a traditional two-sided marketplace. The demand side includes individuals and businesses that purchase the RTK data directly from GEODNET or through reseller partners. In the latter case, partners can build out branded offerings that enable them to set their own fees and offer customization for their specific use case and resell wholesale data at a 50/50 revenue split with the GEODNET foundation. Ultimately, 80% of all revenue earned by GEODNET is directed towards programmatic buyback and burns of the token. 

Source: GEODNET console via Dune

On the supply side, 3rd party hardware providers manufacture the compatible base stations. End users can either purchase these directly to provision data to the network in exchange for tokens, or for commercial applications, manufacturers can package compatible devices into their systems to provide customers with network access. In the latter case, manufacturers can either receive those tokens as a form of reimbursement or they may opt to pass through those rewards to customers. Either way, it serves to reduce the cost of the entire system by offsetting, or completely eliminating, integrated receiver costs. As an example of real-world use, the US Department of Agriculture recently partnered with GEODNET to provide low cost RTK service to US farmers. For a more everyday example, the team recently released their ‘GEO-PULSE’ after-market product that is designed to improve automative positioning by solving for interference typically caused by buildings, layered structures and atmospheric interference. 

Token Mechanics Matter

There are two competing dynamics at play with GEOD tokens. First, much of its network is incentivized through the issuance of GEOD tokens to miners. This is the compensation users/manufacturers earn in exchange for deploying base stations to the network. Triple-band miners earn the most emissions, while older and less-value add dual-band earn less. Every July, the amount of new issuance is halved. 

Source: GEODNET console via Dune

On the demand side, there are two core drivers. Primarily, token demand is driven by revenues generated – primarily through good old fashioned B2B (or B2B2C) subscriptions. 80% of these revenues programmatically go towards buying back GEOD tokens on the open market, which are then burned and permanently removed from supply. What does this mean? As the business continues to grow, there is continually compounding buying demand for the token, growing at ~15% MoM for most of 2024 and recently spiking to $208,000 in buybacks in December alone off of nearly $260,000 revenues ($3.1M run rate). 

Holders are also required to stake GEOD in order to participate in governance of the project and can also stake their tokens in ‘Super Hexes’ in order to further incentivize miners to come online in specific underserved geographic locations. In exchange, they receive a 20% bonus on their stake after completion of a successful deployment period (1 year program). 

Conclusion

GEODNET is a prime example of how the novel design space enabled by blockchain technology and resultant decentralized infrastructure networks can thoroughly disrupt the status quo. In the case of a globally consistent and dense RTK network, GEODNET has managed to construct the world’s largest network for a fraction of the cost of incumbent companies and has done so in just 3 years. The onus will be on the team to build out the demand side to offset the incentive issuance, but as the network continues to compound and hardware manufacturers natively adopt GEODNET’s RTK data services, the defensible moat will only continue to widen. If they can continue to convert that supply dominance into long-term B2B subscriptions, GEODNET may very well find itself positioned as the de facto global standard for GNSS correction services by the end of the decade. 

Interested readers can further explore the team’s full vision for the project here.