EV3 Dialogue Starpower: How DePIN Reshapes Trillion-Dollar Traditional Industries

Author: Starpower
Be a contrarian thinker! EV3 was the only VC to go all in on DePIN in 2022, heavily investing in the energy and communication sectors of DePIN, and is also an angel investor in Starpower.
In this interview, Laser invites EV3 co-founder Sal to delve into the origins and future of the DePIN field. They share their career journeys, market insights, and outlook for the future. This is an inspiring conversation that showcases how DePIN is reshaping traditional industries through blockchain technology.
The audio recording and translation were generated by GPT, so there may be some errors. Please listen to the complete podcast:
Starpower Youtube: https://youtu.be/mtIU0jBgsGI

Interview Opening and Background Introduction

Laser Hi Sal! I'm very glad to have you on this podcast to share some of your stories. I hope the audience can learn more about EV3 and you personally. We met in Denver about two years ago, around February or March. At that time, DePIN had just been named by Messari, and many people were still unfamiliar with it. Now it has become quite popular. First, could you introduce yourself, your background, what brought you to EV3, what you are doing at EV3, and your outlook on the current market, especially for the coming year?
Sal Of course! First of all, thank you very much for the invitation, Laser. It has been an honor to know you and witness the growth of Starpower over the past two years. A brief introduction about myself: My partner Mahesh and I co-founded a company called EV3, which stands for Escape Velocity. We have been focused on investing and building in the DePIN space for over two years now, even before we named the field. Our motivation is based on our years of experience in the crypto space, where we were responsible for investments in DeFi, Layer 1, and other ecosystem parts at some large investment firms. From late 2021 to early 2022, we noticed that dozens of massive global industries, such as energy, wireless communication, and transportation, were facing significant coordination issues.
Research into blockchain technology provided the possibility of solving these coordination problems, but at that time, very few people were considering how to apply it to real industries. Entrepreneurs were thinking about it, but investors were paying little attention to this area, leading to a lack of funding for entrepreneurs. So we founded EV3, raised a seed fund, and focused on helping new DePIN entrepreneurs launch their companies and realize their visions. Over the past two years, we have invested in about 20 different projects, covering almost every subcategory in the DePIN space.
We are also working hard to promote DePIN as a core part of the crypto ecosystem and community because we believe it deserves that status. We hold the DePIN Summit every year, and it has been an honor to have you, Laser, as a guest for the past two years. Additionally, we have an analytics platform called DePIN Ninja, along with a series of other activities to support the development of the DePIN community.

Sal's Career Journey: From Finance to DePIN

Laser Can you tell us about yourself? I think most of the audience comes from the DePIN field, so they should be familiar with EV3. But what about you personally?
Sal Sure. I come from Venezuela and was exposed to Bitcoin at an early age. At that time, Venezuela was experiencing hyperinflation, while Bitcoin was going through one or two bull market fluctuations. My co-founder and I met during our internships at Goldman Sachs. Later, we worked together at financial institutions for two years, mainly handling corporate mergers and acquisitions, IPOs, and debt financing.
After gaining a deep understanding of how capital markets operate, we realized that, at the end of the day, these issues could all be viewed as coordination problems, which we could solve more efficiently with protocols. In fact, it was not bankers and financiers who truly cracked the secrets to these problems, but software developers. So we became obsessed with venture capital and the tech ecosystem, particularly focusing on how engineers and developers could better solve these issues. Clearly, the way Goldman Sachs and other large companies operated was unsustainable and lacked productivity. There was a lot of "busy work" in their operations, but it did not yield real productivity or benefit billions of people worldwide.
Later, I left Goldman Sachs and joined an investment firm in Palo Alto called Ribbit Capital. They were one of the earliest investors in Bitcoin and early investors in the Series A rounds of Coinbase and Robinhood. Additionally, they invested in many global fintech companies that later became significant businesses.
During my time at Ribbit, I felt that DePIN had a similar early development state. Although I did not experience the fintech wave of 2012, the DePIN of 2022 felt like what the Ribbit team described about fintech in 2012. This field is still very early, but it clearly has the potential to take over a multi-trillion-dollar global industry.
I could sense that many software developers and entrepreneurs were beginning to believe they could challenge these massive traditional industries. They needed funding, and this presented a great opportunity for building an investment firm focused on helping entrepreneurs in these categories. For Ribbit, the focus was on fintech; for EV3, it is DePIN. This was also the main inspiration behind our decision to focus on DePIN founders in the early years of EV3. That's how we started to truly focus on and support DePIN founders.

Core Areas of DePIN and Future Development

Laser I know you mentioned your early experiences at Ribbit. We all know Ribbit is a very famous investment firm, but they missed out on Ethereum, right? It sounds like your experience at Ribbit helped shape your thinking about fintech, and then you found your own fintech area, which is DePIN. So, I think you have your own philosophy and methodology for finding your "North Star." Can you share with the audience what gives you such confidence? About three years ago, when DePIN had not yet been named as a field, you were already fully focused on this direction. What made you confident that this would become a hot narrative and the right direction?
Sal I think there are two key factors. First, we were simply following great founders. We were fortunate to be involved early in the Helium community. At that time, many of the people who later operated or founded DePIN projects were part of the Helium community—some were miners, and some might have manufacturing companies.
They were exposed to the explosive growth of Helium in 2021 and entered the crypto space. As a result, we had the opportunity to meet many people. We found that many talented founders in this community, after seeing Helium's success, began to think, "Hey, I can apply this model to the industry I am familiar with," or find a way to achieve similar goals differently from Helium. Especially in early to mid-2022, Helium's network was growing rapidly. This gave us a clear signal to follow these talented entrepreneurs because they were passionate about this field.
So we just followed in their footsteps; I don't think we can take much credit for that.
From an investor or investment mindset perspective, wireless communication was one of the earliest fields that helped me understand the potential of DePIN. The three major areas of DePIN today—wireless communication, energy, and transportation—represent three types of "mobility": wireless communication moves electromagnetic signals, energy moves electricity, and transportation moves tangible objects. Wireless communication is the simplest and most compatible with DePIN infrastructure.
Wireless signals can be transmitted through any medium, such as air or water, and they have no mass limitations. Therefore, if you want to build a node network, a wireless communication mesh network is the easiest to implement.
Helium's IoT network is a very powerful example. These LoRa devices can transmit signals over several miles, communicate with each other, and reach consensus on which nodes are online and where they are located. This consensus is achieved through mutual exchanges and triangulation among devices.
When you scale this model to the global economy, you find that traditional wireless communication companies face enormous challenges. For example, due to land use regulations, they cannot build new towers where they are needed, leading to insufficient network density. At the same time, user data usage is increasing by 30%-40% annually, but these companies cannot charge more for it. This makes the unit economic model extremely difficult, especially when these telecom companies are burdened with significant debt. For instance, due to land use regulations, they cannot build new towers where they are needed, leading to insufficient network density. At the same time, user data usage is increasing by 30%-40% annually, but these companies cannot charge more for it. This makes the unit economic model extremely difficult, especially when these telecom companies are burdened with significant debt.
Moreover, almost no users, whether in home networks or mobile networks, are satisfied with their connectivity providers. These companies also lack the ability to quickly roll out new products or innovate. Therefore, we believe that in the field of wireless communication, a decentralized network can expand the initial network more quickly, allowing nodes to communicate with each other, thus eliminating the need for centralized management layers.
This model can benefit billions of users worldwide who are dissatisfied with existing connectivity services while addressing the commercial weaknesses of current providers. Therefore, we believe that if decentralized wireless communication can succeed, it will become a multi-trillion-dollar asset. This has led us to fully invest in exploring the field of decentralized wireless communication and striving to understand its operating models and development potential.
After delving into this industry, we realized that while energy and transportation may seem more challenging and may take longer, they also have similar network effects if approached correctly, rather than just relying on economies of scale in infrastructure.
Thus, we began to expand our investment scope to include mapping, energy, logistics, and even healthcare and identity verification. We are always thinking about what the next potentially successful area in DePIN might be, so we can support these areas and help them scale faster.
Laser
It sounds like you have deeply researched the details of the Helium wireless field, and along this path, you discovered that blockchain, Web3, and crypto technologies can replicate this model in other areas, such as energy, mapping, RTK, etc. Through our conversations over the past two years, I feel you are a very insightful person who enjoys delving deeply into a specific topic and exploring the industry. So, I wonder how you balance in-depth research across so many subfields in DePIN and make the right decisions in each subfield?
Sal
You could say we were fortunate to enter this field very early, which allowed us to conduct in-depth research across multiple areas in 2022 and 2023, while other investors had not yet noticed these fields.
We have an internal philosophy: investors should not try to be smarter than entrepreneurs because entrepreneurs are closer to customers and innovation. They always see the future earlier than investors, sometimes even six months, a year, or even longer ahead. But if your mind is prepared, you can shorten that gap from six months to three months. By building close relationships with entrepreneurs, like the one we have, we can keep pace with them.
When selecting investment categories, we often change our minds. Some areas we were optimistic about before, but later changed our minds; while some areas we were initially uninterested in became very promising after further exploration. One thing we always pay attention to is the market size—not just the current size, but the potential size it could reach in the future. I think many people may not consider this. There are many DePIN networks that, while good networks, are not great venture capital opportunities. For example, some global niche networks, such as amateur radio (Ham Radio). This is a very inefficient large radio device, and currently, there may only be about 10,000 to 15,000 enthusiasts using it worldwide. Perhaps in the future, someone will launch a DePIN project for amateur radio, which could be great. But such a network is at most a $10 million to $20 million opportunity, not a trillion-dollar opportunity. And that is the goal that DePIN can achieve over a sufficiently long time. Therefore, when we choose fields, we consider how large the market could be in the future and what significant things can be built on top of it. Wireless communication and energy are the core areas because they are the foundational layers for everything else.
Whenever there is new energy capacity or wireless capacity generated, the demand for them is almost limitless, and it has been so since humans mastered these technologies. These two areas are clearly the largest markets but also the most challenging to tackle. The question is whether a good product can be built in these fields. For example, the sensor field is more difficult because there are many different types of sensors, and their data may overlap. Our internal view is that image data or video data, i.e., cameras, are the most powerful sensors. If you have enough cameras and can process the data they capture, you can infer weather, precise locations, and even noise levels. Therefore, we carefully consider how useful the deployed hardware is and how many people can use it to do valuable things. For example, wireless communication can provide internet access, which is very useful; batteries can store energy and release it when needed, with almost limitless applications. In contrast, weather sensors have relatively limited uses and user numbers.
Overall, we spend time on markets with huge future potential or those that are already significant today.

Investment Philosophy and Founder Selection

Laser So you choose to focus on large markets, like wireless communication and energy, and then select suitable talent within those subfields, right? Got it. The next question is, what are your criteria for choosing the "right people" or "suitable founders"?
Sal That's a tough question. I think we have operated for two years ourselves, and before that, we worked for other companies for several years. The feedback cycle in venture capital is long; it usually takes about 8 to 10 years to know whether the entrepreneurs you support can build something special. So it is still too early to judge whether we are good at selecting founders. However, we have some early signals indicating that our direction may be correct.
For founders, I believe the most important quality is resilience. This is also why I enjoy working in the DePIN field. Mahesh and I often say that DePIN founders are like "cockroaches"; they never give up, and regardless of market fluctuations, they keep building. They must be very resilient because raising funds and getting people to understand this industry has been really difficult over the past few years.
So if a founder is very resilient, ambitious, and does not overspend, this combination is usually very powerful. Because this way, they can conduct many experiments as long as the pace of improvement is fast enough and they do not fail due to running out of funds, I think these founders usually succeed.
Resilience can overcome many issues, such as a lack of connections, insufficient management skills, or a poor network. We pay close attention to whether founders have achieved outstanding results with limited resources in the past. When we see signs of "flexibility" and "resilience" in founders, this is usually our strongest signal to support them, especially in the DePIN field.
This may be more challenging at the seed stage because the company usually does not exist yet. But we always look for some signs in the founder's background, such as whether they are particularly persistent and would never give up on what they are building; or whether they have accomplished a lot under extremely limited resources. When we see these signs, we consider them worthy of support and collaboration.
Laser
So after you find the "right people," do you focus on their revenue, business model, and other specific details? Or do you simply maintain a good relationship and regularly update on project progress?
Sal
Are you asking about after we invest?
Laser
Yes.
Sal
After investing, we usually maintain close collaboration with founders, especially in planning. One of the keys to venture capital is to use limited resources as efficiently as possible. So on one hand, you need to raise enough funds to experiment and achieve ambitious goals, while on the other hand, you need to clarify the company's development direction.
We do not get deeply involved in the day-to-day management of the company's CEO, and I also believe we should not do so. But we can do three things. First, clarify future goals and milestones. For example, if you invest in a seed-stage company, we can help the company clearly plan the milestones it needs to achieve, such as what key tasks need to be completed from seed to Series A, and work backward from those goals to ensure the company is in a favorable position and has some buffer to achieve them.
The second thing is to make real long-term bets. Although to some extent, you need to pay attention to the next round of financing to ensure that funding does not run out, this should not be the company's only goal. The real goal should be to build a unique product with a 10-year moat. We need to make decisions that strengthen this moat rather than just pursuing short-term optimal choices.
Therefore, it is crucial to make founders understand that they can make a 10-year long-term bet with us as investors, especially when other investors may give contrary advice, such as "You must launch a token quickly" or "You must reach a certain revenue target," etc.
The last point, I think, is particularly relevant to Web3 venture capital because the history of Web3 is still short, and many people do not have much experience building companies. But in Web2 venture capital, there are some very basic operations, such as conducting annual compensation benchmarking and telling founders, "This is how your income compares to other executives in the market, so we think you should get more options to stay motivated." We also evaluate the compensation of COOs and CTOs and provide benchmarking advice. This practice is common in Web2 but has not yet been widely adopted in the crypto investment community.
So, helping founders set up a proper compensation system, both for themselves and for their teams, and ensuring they recruit the right talent and motivate them, is the last point where investors can have a significant impact on the company.

The Rise of DePIN Energy

Laser
In the past six months, based on my personal observations, energy seems to be the hottest subfield among all DePIN areas. In the past six months, companies like Daylight, Glow, Fuse, and our own Starpower have gone through new rounds of financing, some raising quite significant amounts. So, as an early investor in the energy subfield, what are your thoughts on these financings and the performance of energy DePIN in this bull market? Will energy DePIN become the next success story like Helium?
Sal
It's really great to see the development in this field. I know many people are skeptical about DePIN energy, but we were fortunate to be involved early with the three companies you mentioned—Starpower, Daylight, and Glow. Now, late-stage investors are starting to see that these companies are ready to efficiently utilize $5 million, $10 million, or even $15 million to expand their networks.
This is really exciting because I believe the energy sector is a very long-term bet. These networks take a long time to mature and interface with traditional energy systems because their goals are very ambitious. So, I am glad to see that you have secured the funding needed to continue building in the coming years. I think this is just the beginning.
I wouldn't be surprised if by 2025, the financing amounts increase from $3 million or $5 million to $10 million, $20 million, or even $50 million. The energy industry has many directions that can be practically invested in, such as purchasing their own assets or directly driving growth through some credit instruments.
Overall, I believe this funding will be well utilized in product development and network expansion. By then, people will start to see decentralized wireless communication and decentralized energy becoming two major fields, while other DePIN categories will struggle to catch up and prove themselves in similar ways.
Laser
So, what factors have contributed to the rise of DePIN energy? For me, especially in the U.S., it seems to be primarily the installation of photovoltaics (PV). They have brought more problems to local grids. At the same time, the development of artificial intelligence (AI) over the past two years has led to the construction of many data centers, increasing volatility on both the supply and demand sides. I feel this is why DePIN energy is so hot right now. I believe DePIN energy could become a very promising field capable of raising significant funds from traditional capital.
Sal
Yes, I completely agree. Just like telecom networks, energy grids are collapsing globally. And now, this issue is starting to affect developed countries, prompting people to pay attention and take action. I believe that as we see the U.S. grid continuously failing and under pressure from AI demand and other types of demand, DePIN energy will continue to receive attention.
When power outages begin to occur, people will gain a deeper understanding of the importance of energy autonomy, such as the significance of locally installed batteries.

Industry Outlook and Advice

Laser
Alright, it looks like our time is almost up. Thanksgiving is also approaching, and first of all, I personally want to thank you for your support during our very early stages. You supported us even before we were established.
This is my personal gratitude to you. I also want to thank you for your support over the past two years. Additionally, I really enjoy our conversations because I feel you are a very thoughtful person who focuses on long-term goals rather than being a typical Web3 investor.
Over the past two years, I have probably spoken with about 400 investors, especially this month, I have interacted with nearly 100 investors through Alliance. But I think you are one of the most outstanding among them, and that’s my personal feeling. So before we wrap up this podcast, do you have any final thoughts on the industry or advice for founders? Anything you would like to share?
Sal
First of all, thank you very much for the compliment, Laser. It has been great to know you and witness the development of Starpower.
Lastly, I want to say that the power of DePIN is very strong. I want to emphasize that it should always be viewed from a long-term perspective. Whether you are a founder or just an ordinary citizen, you can truly help build the infrastructure around you and improve your community. I think many people do not realize that when you install a battery, you are not just helping yourself; you are also helping your neighbors and the entire grid.
For example, through cryptocurrency and energy DePIN, you can clearly see the value your actions bring, and this value is paid to you through tokens.
Moreover, the more we can make people clearly recognize that by doing some things they should or could do every day, they are not just helping themselves but also helping others, the faster this industry will develop and improve everyone's lives. So, that’s the last point I want to make. If you are a founder looking for funding for a DePIN project, feel free to contact me anytime. My email is Sal@EV3.XYZ.
Laser Alright, thank you for joining our show. That’s it for now.
Sal Thank you!