Helium: A Decentralized Wireless Network Powered By Crypto

Summary

Introduction

Helium leverages blockchain technology to create a decentralized, accessible, inexpensive and global network. This network is created via Helium hotspots, which are essentially nodes that generate Helium IoT and mobile tokens (HNT) as incentives for providing network coverage.

These hotspots can be purchased and simply plugged in to begin earning HNT, with earn rates dependent on the strength of coverage provided. This dynamic caused many speculators in the early days of Helium to place their hotspots in precariously high positions in order to avoid any signal disruption from objects closer to the ground.

Hundreds of Thousands of Hotspots Deployed

Nova Labs (formerly Helium Systems, Inc) was established in 2013 by Amir Haleem, Sean Carey and notably Shawn Fanning who co-founded music streaming service Napster. Their flagship product, Helium Network, was later launched in 2019. It has raised over $250M across 9 rounds of funding from investors such as Tiger Global, Google Ventures and Pantera Capital.

Global Helium hotspots. Source: Helium

Helium is very well funded to enact their mission: Operate as the base layer for the vast and still growing system of internet-enabled devices (also known as “Internet of Things” or IoT). It is clear the incentive of HNT in exchange for network coverage is a strong one, with hundreds of thousands of hotspots currently in operation providing coverage to much of the United States as well as Europe.

The Need for Cheaper Networks

As its coverage grows, Helium as a network becomes a more viable partner for a number of companies that would require an inexpensive network to link and track their devices.

For example, global air quality tracking company Airly utilizes Helium to enable real-time data of air quality for use by companies and governments to track air pollution and monitor emissions.

An Airly sensor checking air quality. Source: Helium Blog

Given its usage by a number of non-web3 companies, Helium is often touted as one of the few blockchain products that has actually found a market fit outside the closed walls of crypto. This Airly use case is an excellent example of that.

A T-Mobile Partnership

Helium Mobile, a new launch from Nova Labs, is made possible through an agreement with T-Mobile. Helium purchases data wholesale from T-Mobile and utilizes the network of Helium hotspots to provide high-speed data to customers, lowering the overall cost as compared to competitors.

Users who deploy hotspots are eligible to earn $MOBILE tokens, in much the same manner as the main Helium network rewards coverage providers with $HNT. In order to access this mobile network, users simply need to add a Helium SIM card to a mobile phone and pay a monthly fee of $5. Customers who have participated in the beta program or have been referred are eligible to receive a $5 per month plan.

Helium Mobile Features:

• $5 a month for most users
• Unlimited Voice and Data
• Nationwide Coverage

Importantly, these SIM cards are compatible with any model of smartphone and are not restricted to a specific manufacturer, which has been a problem in other decentralized network protocols.

The Switch to Solana

While Helium was originally started as its own blockchain, the team recently made the decision to migrate its network and tokens onto Solana. This was done to take advantage of a more scalable, higher throughput blockchain for their network as well as attract more liquidity to their token system. Additionally, Helium users can now enjoy much faster transaction speeds at a fraction of the price of transactions on the Helium blockchain.

For context: The average transaction on the Helium chain cost users $0.35, while the average Solana transaction costs $0.000344. Another important aspect of the Solana transition is that Helium developers will now have the ability to build more complex smart contracts for the network while using Rust, which is a far more common coding language than the previous Erlang language.

The main goal of the Helium network is supposed to have little to do with the price of its token. However, the token price does directly influence the level of incentive users have to provide coverage and thus this move towards the more active Solana blockchain was seen as very favorable. Also favorable: In May, 2023, Helium added a new product to its suite of networks through Nova Labs: Helium Mobile.

The Helium Network Token (HNT)

The Helium Network Token serves as the native token to the Helium blockchain and is a core component of how data storage and usage is paid for. HNT can be swapped for Data Credits (DC), which in turn are used for the actual payments on the network. The HNT used to create DC tokens is burned from the supply, providing a natural deflationary pressure on the token supply. As DC tokens are required to use the Helium Network, in theory there is a constant demand for HNT as well.

Helium network staking economics. Source: Medium

Since the migration of the ecosystem to the Solana blockchain, the utility of HNT has been somewhat changed. Whereas before HNT was used to pay for gas fees on the chain, SOL now occupies that role. The good news for HNT holders is that while it no longer functions as a gas fee, DC tokens are still used to pay for Helium-specific fees and thus there is still demand for HNT. Additionally, HNT is no longer produced by hotspots, and instead IOT is issued. This means the inflationary force on the supply of HNT has been dramatically reduced.

It should be noted that prior to the Solana migration, top exchanges such as Binance delisted HNT from their platforms, and have yet to relist. However the token remains tradable on Solana-based DEX as well as Coinbase, which is the largest HNT trade pool by volume.

Helium Grants Program

The Helium Foundation is the steward of the Helium Network, the world’s largest decentralized wireless network, and is a 501(c)6 non-profit organization. The Foundation’s mission is to innovate in the wireless technology industry as a driver of ecosystem development, network governance, and public education. One of the main Helium Grants initiatives of Q2 2023 involved giving funding to Helium community members to organize meetups and events all around the world.

The Foundation also began a funding program through Helium Grants and in partnership with companies like Samsung NEXT in order to connect businesses in the Helium ecosystem with the strategic partners and funding they need to succeed. With great backers, a growing network and a huge corporate partnership Helium is well positioned to be an amazing real-world use case for crypto and blockchain technology.