Helium — The People’s Network
Building on last week’s research on DEPIN sector, we wanted to dive into Helium this week.
Helium is actively pursuing the development of a decentralized 5G wireless network and has remained relatively low-key since transitioning to Solana from its original chain, alongside the introduction of Helium Mobile. This project appears to be aligning its foundational aspects with the recent speculative price surges, indicating potential growth beyond mere market speculation. Presently, Helium boasts:
- The world’s largest LoRaWAN network, with nearly 1 million hotspots deployed since inception.
- Coverage spanning over 77,000 towns and cities across 192 countries, including major metropolitan areas such as NYC, London, Los Angeles, and others.
- Rapid expansion of Helium 5G, evidenced by over 8,000 community-deployed 5G radios within a year.
- Collaboration with over 25 approved hotspot manufacturers, four prominent LoRaWAN roaming partners, and a national carrier for 5G coverage.
- A substantial user base of approximately 100,000 devices actively utilizing the Helium Network for connectivity, excluding access via roaming partners.
Helium initially focused on establishing a wireless network tailored to facilitate connectivity for low-power IoT devices such as key fobs or temperature sensors, enabling them to access the internet for data connectivity and location services. This network operates on the principles of LoRaWAN, characterized by its long-range reach, low power consumption, and wide area coverage.
The infrastructure of this network is comprised of independent hotspots within the Helium network, which are open for operation by individuals irrespective of their location. Those interested in running a hotspot could either download open-source software and connect to a compatible wireless radio or purchase a pre-assembled unit from Helium. To encourage network growth, Helium incentivized these users with rewards in HNT tokens.
On the consumer end, users require “Data Credits” to utilize the network, which are non-transferable tokens redeemable for a specific bandwidth allocation on the network. These “Data Credits” are generated by burning HNT tokens, thereby establishing an economic cycle where the burning mechanism counteracts the inflation of HNT necessary to incentivize hotspot operators.
The IoT segment of the network has shown considerable success, with approximately 400,000 active hotspots as of the current writing, since its launch in 2019.
After effectively launching and validating the IoT network and its crypto-economic incentive model, the team shifted their focus towards diversifying network types. This strategic move aimed to facilitate the coexistence of various network protocols and tokens within the HNT ecosystem, effectively transforming Helium into a network that encompasses multiple networks.
Under HIP 51, new network protocols (also referred to as subDAOs) would have their own token and governance backed by HNT and redeemable for HNT at any time. Data Credits are still required to use any network protocol and and can only be obtained by burning HNT. Each network protocol receives HNT based on the size and utility of the network using a protocol score. These new networks can be added by submitting Helium Improvement Proposals such as LoRaWAN (HIP 52) and 5G (HIP 53) which spawned IOT and MOBILE:
Following the successful initiation of Helium 5G via HIP 51 and the establishment of a hotspot operator community, Helium entered into a partnership with T-Mobile in September 2022 to unveil a crypto-powered 5G Mobile service. The recent fruition of this partnership was witnessed with the launch of a $5 unlimited plan by Helium Mobile in Miami. Helium Mobile functions as a hybrid wireless carrier, leveraging both the Helium 5G network and T-Mobile’s infrastructure. T-Mobile serves as a backup network for subscribers when they are out of range of a Helium hotspot.
In addition to the notable progress in Helium 5G, the project underwent a recent migration to Solana from its native chain. This transition unlocked various advantages, including:
- Operating the network at a significantly reduced cost.
- Enhancing network efficiency, stability, and reliability.
- Introducing smart contract functionality for programmable features and tools.
- Enabling DeFi composability.
- Access to a larger and more engaged crypto developer community.
The vision Helium is striving towards is undeniably ambitious, with the potential to disrupt established players in the industry and offer significant returns to investors if successful.
However, it’s crucial to acknowledge that the model is still untested, and there is currently subdued demand. This is likely why HNT is trading at a comparatively low valuation relative to its potential value if the project flourishes. Investing in HNT at this stage entails placing a bet on the network’s gradual expansion in both size and usage, moving towards long-term economic sustainability. Monitoring the adoption of Helium Mobile will be critical in assessing the trajectory of the network.
Moreover, it’s worth noting the team’s demonstrated competence in execution thus far, as evidenced by their successful delivery on many of their promises, with Helium Mobile serving as a notable example.
Resources
Dune Dashboards from Helium Foundation
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