The Helium Network is trying to renew it’s mission with a move to Solana, and more traditional staking economics, and a shift to 5G services. They cut over the network to Solana on April 18th 2023.
Helium provides decentralised internet access. That is clearly valuable to people in a non monetary way. That they will pay for it is beside the point. People aren’t hooking up to a Helium internet access point to make money: they’re doing it to access a valuable service.
It’s been an interesting (and bumpy) road for this project which is probably the only non finance use cases that’s seen any traction, along with fitness apps like Stepn & Sweatcoin, and BAT (Basic Attention Token). Even the most successful NFT project ever, BAYC, has seen an overwhelming majority of it’s value come from speculation, despite they being the closest out of all the NFT projects to building out a functioning ecosystem around their core collections.
The challenge will be, as it’s been with NFTs, will non financial value be enough able to drive significant adoption? It’s not that you can’t have the financial incentives help drive adoption but if they are the only driving factor you quickly get into the boom bust cycle. For example traditional social media networks have a huge amount of non monetary value for the vast majority of users. That those same social media networks also provide financial value to some users helps drive adoption and engagement but it is a minority factor in sustaining the health of those networks.
NB: I think carbon credits and social media/publishing are two areas most likely to see non financial use cases emerge. Both have large amounts of value in decentralised ownership that is non financial but as of yet we’re yet to see any break out projects.
Helium’s problem has been the driving factor in sustaining the health of their network to date has been financially driven. The majority of value people have seen is speculative in nature thus we’ve had a boom, and we’ve had a bust.
It’s entirely unfair on Helium to place all the blame at their feet. At the time they launched everyone was building IoT networks. Telcos and govts all around the world poured 100’s of billions into building these networks. We all believed we were at the dawn of a new IoT device world, where we would be surrounded by always-connected devices that would increase our efficiency, safety and even happiness. That didn’t really come to eventuality as it turned out that devices and networks were both underpowered and less secure than mobile networks/wifi. That and the use cases never eventuated at scale and those few that did were better served by existing mobile networks/wifi.
None of these networks are useless, we’ll gradually see adoption of them for future use cases, but all of them have some sort of white elephant characteristic to them and all of them are yet to pay back their build costs. The Helium IoT network is a poster child for both these aspects though.
However, for all its flaws, Helium did build a large IoT network for a fraction of the cost of any other network. Possibly, after the Bitcoin miner network, its the cheapest network infrastructure we’ve seen deployed at scale in human history. Helium built it by successfully decentralising the costs and rewards. They picked the wrong horse in terms of technology but they didn’t pick the wrong design.
Helium: The Network of Networks - great long read about Helium’s history, the tech and what the future holds.
“Helium has a presence in 65,000 cities and 170 countries. Close to a million Helium hotspots blanket the world, quietly connecting intelligent devices to the internet.
Though Helium’s scale is remarkable in and of itself, its infrastructure is its defining characteristic. Haleem’s project is built on the blockchain and propelled by token rewards it gives to those who secure the network. Owners of Helium’s hotspots not only contribute to decentralizing access to the internet, they earn “HNT” as their node in the network is used. It is one of crypto’s greatest accomplishments and a demonstration of its use.”
Helium's 5G rollout is much more well thought out than the IoT network in that it has a coverage gap partner (T-Mobile) and a flywheel like partner in the Solana who are incentivised, via the token integration and their Saga phone, to promote Helium to their broader network. Helium are calling this next phase of the network: Chapter 2
It has a strong set of fundamentals underpinning as opposed to the IoT network which has struggled with the provider > user value equation. The value of 5G to the user is not up for debate.
Potentially the Saga phone could be a huge part of this. Especially considering the Solana Mobile Stack can be deployed across multiple devices. It’s not even the only blockchain/crypto mobile OS, ethOS just released a significant upgrade recently.
It's very, very early days but the premise of personal devices offering greater security your digital assets has been well proven by the success of hardware crypto wallets.
This goes beyond just embedding a hardware wallet into an existing phone or downloading a mobile optimised software wallet. If we're to see blockchains expand their use cases beyond high worth security like assets they'll need ways to make high volume, high speed, low cost transactions. The control and security that comes from OS layer control is likely what you need to achieve that. That’s what things like the Saga Phone are aiming at. A network that is able to tightly integrate with this mission, as it’s also a blockchain based protocol, offers up a lot of interesting and powerful possibilities. We’ve seen entire an blockchain, validators and all, be able to be deployed on low powered device. Minima has been optimised to run on Android phones, as well as other devices.
What if the blockchain was the nodes, the dapps, the users, and the data network all-in-one? It’s a powerful idea.
With the move to Solana comes a revised tokenomics model. The basis of this veHNT, the worn ve token model. With a Helium twist.
veHNT represents the voting power of the Helium Network.
In the Helium ecosystem, HNT holders can receive veHNT by locking their HNT on-chain for a specified period in exchange for voting rights and voting power in the HeliumDAO as defined in HIP-51.
Additionally, this provides other benefits, such as earning MOBILE or IOT tokens, if the holder delegates their veHNT to those subDAOs, respectively. After the lock-up period ends, the same amount of HNT is released back to the owner's wallet and is now transferable, if needed.
The next bit is where Helium adds it’s own flavour.
You can delegate your veHNT to either of the sub DAOs for token rewards.
Vote and delegate in the Helium DAO on Realms.
You can set up a Helium Wallet and delegate and stake within that, or you can use any Solana wallet that integrates with Realms.
Till 23:59:59 UTC on April 28, 2023 there is a 3x multiplier for any veHNT locked. All veHNT locked before then will result in 3x the HNT at unlock.
If have an existing Helium Wallet with $HNT make sure to migrate the wallet to Solana (it's in the settings).
Otherwise if you're coming to $HNT brand new here's how to lock and delegate $HNT. Multipliers will only be available till the date above.
Swap for some $HNT.
Then go to the Helium DAO on Realms and click on Lock Tokens
Choose the Lockup Type you want. Click 'About Lockup Types' to see which one best suits
Choose how long you want to lock for. Seeing as we're still in the Landrush event there'll be a multiplier bonus applied to your vote weight
Once you've locked your tokens, go to Delegate to stake in one of the sub DAOs to receive rewards (and also delegate your votes to that DAO). If you don't stake you will retain the ability to use that voting power yourself but you'll not receive any protocol revenue.
Select which sub DAO you want to stake with.
You can also buy $IOT and $MOBILE tokens and stake directly in those DAOs on Realms.
You're all done! Congrats. You can return here regularly to collect your rewards and you can change your delegation as well.
Your locked tokens will show up as an NFT in your wallet. This means you'll be able to trade this position in the future if you wanted (though I don't know if Helium will be encouraging this)
The token lock event is a solid long term strategy if you believe the Helium Network is a good long term play. It’s a lot like buying shares in an early stage company. Maximum rewards are achieved at 48 months.
Short term though there’s likely going to be a lot of transactions in the Helium Network. In these early days and when liquidity is low but transaction volume is high, there’s opportunities to make good yields. Crazy good for short periods of time even.
First Kamino $HNT vault, $HNT-$SOL is live with more to come (according to the Discord). Search for it by using the EcoSystem filter. Currently that APY is about half incentivised by Helium themselves (see % of $HNT being rewarded under Total APY) but I don't think that a bad thing. $HNT is a huge project. Many of top projects on Solana combined are not as large as what Helium is. It's got hundreds of millions in venture capital backing it as well as many, many thousands of node operators.
That all said, it's crypto, so don't invest what you can't afford to lose.
I think it’s sensible to have a balance of long and short term positions in any portfolio, probably with a skew towards long term as this is a very young industry. Helium is a good example of a protocol that offers an opportunity for both.
I think the answer is: Kind of. Maybe.
The new token economics on the Solana chain don’t speak to the non monetary value proposition of Helium. Instead they’re well established ve token models that seek to leverage speculation in a more sustainable way to provide liquidity. This model has a high utility in the case of a Balancer or a Curve, who use that liquidity to facilitate their core services (i.e., swaps), it’s unclear if liquidity has a core role to play in the operation of Helium’s IoT and 5G networks.
Liquidity doesn’t have zero role to play though. Helium will need enough liquidity to support swaps into and out of $HNT (most likely to $SOL or an stable) and swaps between $IOT and $MOBILE. That’s not nothing and this combined with the price support locking tokens gives to $HNT should have positive benefit to all participants.
Tokens staked in the IOT and MOBILE DAOs are for voting power and rewards distributions but not they’re not vital to the operation of the network hardware or internet services. Same with $HNT tokens.
I think this is a missed opportunity.
Helium incentivising long term deposits of liquidity into the network to help subsidise the roll out of more hardware would make a lot more sense for their tokenomics when it comes to liquidity. That’s basically what buying shares in a company (private or public) is. You give the company money to invest in doing more of what makes them money and you hope to profit long term from increased revenue distributions.
My uneducated opinion is Helium should instead look to raise a bunch of capital, via token locks that acted as loans, to fund a no-interest loan program, basically a grants program, to upgrade existing IOT providers to also carry 5G and to onboard new 5G and IoT providers. I think they should handle this via an application process as you’d want to avoid saturation of providers you had in the first place. It would still be a land grab, as it was the first time, but this time controlled as the application process could be based on existing network coverage. You could incentivise geolocations with higher grants/rewards.
Loans would be auto-repaying via provider rewards. Those premiums could be used to help distribute rewards to token holders as part of their vesting schedule as well buying back $HNT to help support the price.
Investors providing these loans would do so via locking their $HNT tokens in a bonding mechanism. This way you lock in funding but people could still trade those bonds before unlock if they needed to. Bonds therefore give some flexibility for the system to rebalance where needed and make these more attractive to investors as there’s not a immovable unlock schedule (e.g., veBAL).
Another idea could be to pay providers part of any loan in locked $HNT tokens, which are only able to be unlocked via network usage. This would incentivise providers to not only be in useful geolocations but to also make sure they were facilitating meaningful network traffic. Again this could in the form of bonds to give the system a way to rebalance where needed, e.g., provider needs to exit the system so they can sell both their hardware and unlocked $HNT bonds. There’s plenty of legit reasons why an initially profitable geolocation could become unprofitable in the future so you don’t want to see large amounts of tokens locked with little way to unlock that liquidity.
I’m really excited about this next chapter for Helium. I think it remains one of the most interesting projects in blockchain and, despite some stumbles, it keeps on delivering quality updates. They have a strong utility to their product and they have a strong blockchain network in Solana to support them. I think they’ve taken all the learnings you needed to take from their IoT network and are now putting them into practice in this next phase.
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