As a seasoned crypto investor with a penchant for disruptive technologies, I can’t help but see the potential in DePIN and its mission to revolutionize the food delivery industry. Having witnessed countless failed business models and middlemen feasting on profits, it’s refreshing to see a solution that puts the power back where it belongs—in the hands of the people.
The projected growth of online food deliveries to reach $1.85 trillion by 2029 is troubling news for everyone involved, including restaurants and everyday food enthusiasts. In reality, the web2 food delivery system is one of the most flawed systems out there, a clear demonstration of how a middleman can complicate things for all parties. Fortunately, this scenario presents an ideal application for web3 and decentralized physical infrastructure networks, specifically by integrating web3 as the foundation for a service utilized by billions worldwide.
The vicious cycle
You may wonder why food deliveries can sometimes be such a nightmare. The answer lies primarily in the fees associated with them.
Consider this: Your everyday multi-restaurant delivery app would charge a fee of up to 30% for its services. This fee is to be paid by the restaurant, covering the use of the platform as well as, optionally, things like marketing and promotions. The problem is, though, that while restaurants often operate at a 2x-3x markup, that’s to mitigate their extremely high overhead. When you have to cling to solvency so desperately, anything that cuts into your profits—like the delivery app’s fee—bites you badly.
The immediate solution is simple—to throw these costs at the buyer instead. A delivery would cost you about 20% more than dining in, which doesn’t sound fun, does it? Well, delivery companies think so too, which is why they often strong-arm restaurants to keep the prices you see on the app consistent with what you’d pay at the premises. This obviously does little to solve the original problem, which is why the usual outcome is that prices simply go up across the board, both on the app for dining in.
Absolutely, users aren’t thrilled with the price increases and it’s understandable why – they feel overburdened by a large portion of the costs for added convenience. In response, they make sensible decisions, such as decreasing their reliance on delivery apps, and even dining out less frequently. This additional strain is felt strongly by restaurants. As for the couriers, or the “partners” as the apps call them, they aren’t exactly reaping the biggest benefits from these services either.
In summary, the climactic note in this tale shifts focus to the delivery service sector, battling fiercely for supremacy and struggling financially. Constantly spending vast amounts on advertising, promotions, and other tactics to attract customers, they are mired in a relentless conflict that hints at a business model with questionable longevity.
The web3 solution
The scenario presented illustrates how a middleman can unnecessarily complicate matters for both the supplier and consumer. However, this doesn’t imply we should abandon our weekly pizza treats delivered through an app. Instead, a more reliable and sustainable business model like DePIN is what the industry requires to ensure smooth transactions.
Regardless of whether you’re a restaurant owner or a home cook who loves food, the delivery experience with DePIN would be quite similar. You simply log into the app, explore the menu, select what appeals to you, and wait for an independent courier to bring it to your doorstep. The main distinction lies in the cost – since there’s no intermediary involved, you won’t have to pay as much.
In simpler terms, this refers to a marketplace that operates in a decentralized manner, allowing restaurants to sell genuine goods directly to consumers. Instead of paying the high fees charged by web2 platforms, they only need to cover the network fee of DePIN, which is much lower. This enables them to offer food at cheaper prices without compromising their profits, and in some cases, increasing them further.
At one side of this equation are the users who savour the same quality food at discounted rates. This encourages them to utilize the service more frequently, thereby boosting the restaurants’ income even further. The couriers too profit from this setup by receiving rewards for their deliveries through secure and trustless smart contracts. In line with web3 values, the community, encompassing all stakeholders, has a role in determining how the service functions via token-based decision-making processes. This community-driven growth strategy, combined with lower prices, eliminates the necessity for an extravagant marketing budget, allowing the service to thrive on its own merits.
As a researcher immersed in the evolving digital landscape, I find myself at an exhilarating juncture with the emergence of DePIN. This moment represents a significant shift, offering Web3 a tangible opportunity to reshape our everyday experiences, particularly in industries like food delivery.
This article was co-authored by Max Thake and Bas Geelen.
Max Thake serves as one of the creators for peaq, a layer-1 blockchain specifically designed for DePIN and Machine Resource Workers, as well as End-of-Time Labs, an innovative software development and nurturing organization dedicated to open-source projects in the Economy of Things. In addition, Max is a fellow at the Sigma Squared Society, a globally recognized group of founders under 26 years old.
As a crypto investor, I am proud to be a senior marketer at Bistroo, a pioneering platform for food delivery and takeout that uses DePIN technology. In this role, I devise innovative marketing strategies to establish Bistroo as a leader in the intersection of blockchain and food delivery. With a Master’s degree in strategic consultancy, I blend my analytical acumen with a creative flair, honed from my experiences as a film producer and brand designer in the blockchain realm. My versatile skillset and strategic vision enable Bistroo to carve out a unique market position, making cutting-edge decentralized technology appealing and accessible to a wide audience.
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2024-11-14 14:02