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CUDIS x UCLA Partnership 💍

UCLA Athletics has entered into a one-year partnership with CUDIS, implementing their AI-powered smart ring with blockchain rewards into their athletic program. The partnership represents one of the first integrations of Web3 technology with college sports through wearable tech.

CUDIS will provide UCLA athletes and students with CUDIS smart rings for health and activity tracking, allowing users to monitor physical activity, sleep patterns, and overall wellness metrics while earning digital rewards for their participation. Additionally, CUDIS say this partnership will provide UCLA athletes with exciting NIL opportunities, while fans will also benefit by gaining access to a range of personalised insights and rewards while supporting their favourite UCLA teams.

CUDIS CEO Edison Chen, said:

We have previously seen the likes of STEPN tokenise physical activity and encourage users to walk or run with token incentives, but the gamified ‘walk-to-earn’ model, which mirrors the ‘play-to-earn’ model, has been prone to booms and busts and lacked sustained success.

The way CUDIS is set up is slightly different, it uses a decentralised network with a physical product at the heart of it.

What is Decentralised Physical Infrastructure? 🌐

DePIN (Decentralised Physical Infrastructure Networks) is a system where physical infrastructure and data collection operate through decentralised networks rather than traditional centralised entities. These networks typically involve participants contributing resources in exchange for token-based incentives.

An example of this is Helium, which is a blockchain-based wireless infrastructure project that allows individuals to contribute to, and operate wireless networks. The distributed system is an alternative to your typical 5G provider which operates in a centralised way.

CUDIS, operates similarly with some key differences.

First and foremost, they have the smart ring — a physical ring that collects health metrics from users. That data is anonymised and synced to their network and allows users to mint their health data as NFTs on the Solana blockchain. This is to allow users to give permission access to brands, AI models, researchers and more to said data — which is secured, encrypted and stored onchain. Users are incentivised and paid in the network’s native $CUDIS token, and token holders can participate in governance decisions, giving it another form of value.

On the front end — the application that links to the physical CUDIS ring is similar to most wellness apps that link to physical products like WHOOP, Garmin, OURA and others. The data and rewards are all tracked through the application.

CUDIS has sold 10,000 devices since May 2024 and raised a $5m seed round led by Draper Associates in September 2024. Additionally, CUDIS supports World ID, a digital identity system that verifies a person’s uniqueness through biometric data, specifically iris scans. World ID is part of the World Network (formerly known as WorldCoin) — which has been criticised for privacy and ethical reasons — and counts OpenAI’s Sam Altman as one of the co-founders.

Analysis & Concluding Thoughts 🧠

The CUDIS business model, unlike WHOOP and OURA, which rely on subscription models, operates through a data marketplace approach to generate post-sale revenue. While this eliminates recurring costs for users, the long-term viability of this revenue is uncertain, and it wouldn’t surprise me to see a subscription model emerge in the future when CUDIS begin to scale. Indeed, their site already hints at upcoming ‘Lifetime Memberships’ and ‘Upgrades’ suggesting potential additional revenue streams beyond the data marketplace, in the form of a freemium model.

Token economics present a particular challenge for consumer-facing blockchain applications. Market volatility can create confusion among users when token values decline, especially given that external traders who don't use the product can influence prices on third-party exchanges. This is difficult to address, however with a DePin network, there could be levers CUDIS can pull via network contribution that dampen the impact of token volatility. Abstracting this away from CUDIS for a second — if there was a decentralised version of ChatGPT with a token attached, you might see token prices follow actual network demand, with users benefiting from reduced costs as the price of compute becomes cheaper. However, the specific benefits for CUDIS users during token price decreases remain unclear, and this could be a hurdle they may face in the future.

Indeed, when analysing the price of Helium since its launch, you can see a huge boom and bust cycle since its launch in mid-2020.

However, the last 12 months saw the network explode in subscribers— going from ~15,000 subscribers in Jan 2024 to ~ 120,000 by the end of the year.

That subscriber number reflects the token price, and since its launch, Helium has created a number of new tokens and token loop systems, that in turn create less volatility. The reality is that DePIN is relatively new and there is no tried and tested model. If you combine that with the fact that every network, depending on hardware, industry and network type is different — it’s clear the maturation of this sector will take some time.

One of the main issues DePIN faces, and this is no different for CUDIS, is needing physical hardware. That added friction means they have the hurdles of a traditional wellness brand; getting users to buy the hardware and engage, alongside the hurdles we see with most crypto-based consumer products; janky UX, token volatility and bad optics.

2025 could be the coming out party for crypto products across the board.

Crypto[dot]com launching sports predictions markets.

CUDIS and other DePIN networks could well compete with traditional players in their relevant industries.

It’s the year that crypto goes beyond ‘just crypto’ and competes in the real world.

CUDIS have built something promising so far — and it will be fascinating to see how they scale. It will also be interesting to see how much of their go-to-market strategy involves partnerships with athletes and sports brands, following what many traditional health and wellness applications have done in the past.

How they captivate the attention of an audience beyond just crypto natives will be key to its long-term success, and will determine whether they compete in the real world.

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